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This is an assignment I wrote at university in 2001 for my undergraduate degree which received top marks from my lecturer. Having used various knowledge management systems in my career over the last 10 years, I believe that most companies (I've worked for many large American IT companies) do not have any idea how to best manage their information and capitalise on it. Most knowledge is still shared on network drives and folders!
Citation preview
Knowledge Sharing vs. Knowledge Partitioning
By Mr S. Phull
20th
April 2001
© 2001 Mr Satwant Phull
Over the last two decades, the availability of data and information has increased considerably due to the
availability of computers. As a result, consumers have become more sophisticated and companies have
had to constantly improve the quality of their goods and services in order to meet those demands.
However, the levels of differentiation between goods and services has been reduced to such an extent that
firms have had to look to other ways of sustaining competitive advantage and increasing profitability.
One of the avenues that organisations are pursuing is that of knowledge management. Information i.e.
the mere accumulation of data by itself is rather meaningless unless it can be collected, structured,
organised and made available as knowledge. Knowledge sharing has recently been widely adopted
because it is seen as highly synergistic and difficult to imitate. However, there is also an argument for
partitioning knowledge because knowledge sharing is seen as a way of reducing or eliminating
competitive advantage.
In this paper, the author will critically assess the arguments that exist around this strategic tension. In
order to do this the author will firstly define what knowledge and knowledge management is and explain
why they are important. Secondly, the author will discuss the various advantages and disadvantages of
knowledge sharing and partitioning. Thirdly, the author will discuss the key issues and questions
surrounding knowledge sharing. To conclude, the author will explain why knowledge sharing will be the
more dominant form of knowledge management strategy in the future.
Knowledge has various definitions. According to Nonaka & Takeuchi
(1996) it is “justified true belief”. According to Davenport & Prusak
(1998) knowledge is “a fluid mix of framed experience, values,
contextual information and expert insight that provides a framework for
evaluating and incorporating new experiences and information”.
There are two main Ways that knowledge can be classified:
1) Tacit — This is knowledge that cannot be articulated, “it is
embedded in organisational routines, so that no one person understands completely” (Nelson & Winter,
1982). Therefore, it is often learnt through practice.
2) Explicit — This is knowledge that can be articulated quite easily and captured in an organisational
memory e.g. intranet.
INTRODUCTION
WHAT IS KNOWLEDGE?
Knowledge management is still a relatively young field, with new concepts emerging constantly.
According to Donoghue, Harris & Weitzman (1999) “Knowledge management is complex and
multifaceted; it encompasses everything the organization does to make knowledge available to the
business, such as embedding key information in systems and processes, applying incentives to motivate
employees and forging alliances to infuse the business with new knowledge”.
Knowledge flows differently within organisations and this flow is influenced by an organisation’s
knowledge generation, sharing and learning characteristics.
Knowledge is a current area of concentration for large organisations due to several reasons:
1. It is a response to failure in implementation of strategy.
2. It is a response to difficulties in managing situations of high uncertainty, risk and complexity.
3. The inadequacy of approaches based on traditional Management Information Systems.
4. Knowledge is one of the few remaining sources of sustainable competitive advantage in today’s
highly competitive business environment.
There are many underlying drivers for knowledge management. Knowledge can enable an organisation
to catch-up or leapfrog its competitors. Knowledge based strategies are an excellent alternative to
traditional market-based strategies which a) firms often rely upon, b) frequently fail and c) can be copied
by most competitors and therefore do not offer sustained competitive advantage. Effective knowledge
management can also speed the transfer of information into the public domain.
There are also drivers related to an organisation’s external environment. Knowledge management
improves an organisation’s ability to predict where the market may be heading and what customers may
want. It also enables an organisation to identify patterns of information flow. This is an advantage where
the superior flow of information in one division can be transferred to another division that is less
profitable or competitive, for example.
Knowledge sharing is a form of synergy and therefore it should contribute towards the greater good of an
organisation. It is argued that by sharing knowledge, companies should increase their innovative
capacity, efficiency and profitability. It is also argued that knowledge sharing is mainly about building
WHAT IS KNOWLEDGE MANAGEMENT?
WHY IS KNOWLEDGE MANAGEMENT IMPORTANT?
KNOWLEDGE SHARING
core competencies. Core competencies - “those capabilities fundamental to a firm’s performance and
strategy” (Hamel & Prahalad, 1990), are extremely difficult to replicate, especially in the short-term.
Competencies are likely to be heterogeneous, immobile and difficult to imitate. As knowledge possesses
these three attributes, it is easy to see why core competencies are associated with knowledge. Therefore,
knowledge sharing should help a firm to sustain its competitive advantage. There is now more emphasis
on competencies rather than industry structure. “Knowledge has become the key economic resource and
the dominant - perhaps even the only source of competitive advantage” (Drucker, 1990). A firm’s
relative capability differences can be built from knowledge resources such as tacit knowledge and
organisational routines. According to Spender’s Taxonomy1, tacit organisational knowledge is the most
important type of knowledge to companies and strategists because it is the most difficult to share and it
significantly contributes towards sustained competitive advantage. Knowledge sharing is also about
Generalists not Specialists. Generalists are employees within a firm that take part in cross-functional
teams and often have different roles and tasks to perform. Therefore, knowledge sharing is much easier
for them.
Knowledge is heterogeneous i.e. it occurs differently in different organisations. This creates uniqueness
and differentiation from competitors. Sharing heterogeneous
knowledge enables firms to sustain their competitive advantage.
BMW bought Rover in 1994 in order to acquire knowledge from
its Land-Rover and Range-Rover division so that it could
develop its own 4x4 vehicle. BMW knew that it would be
cheaper2 to buy the knowledge and transfer it to its own
engineers in Germany. Subsequently, the BMW X5 was
developed in record time.
Knowledge is imperfectly imitable (Dierickx and Cool, 1989). Employees are often
worried that sharing knowledge with others may harm the firm because competitors
may uncover that knowledge. However, those fears are usually
unfounded because it is very difficult for a competitor to imitate the
benefits of that knowledge. To bring miniaturisation to its products,
Sony ensures that its technologists, engineers and marketers have a
shared understanding of technological possibilities and customer
needs. Sony’s knowledge in rniniaturisation simply cannot be
replicated overnight by a competitor; it is non-transferable (Dierickx
and Cool). A rival may acquire some of the technologies used to manufacture products like Sony's range
1 See Appendix 1 for Spender’s Taxonomy 2 BMW did not envisage the subsequent problems with the Rover Group at the time of the acquisition.
of portable Minidisc players, for example, but will find it more difficult to duplicate the more or less
comprehensive pattern of internal learning, co-ordination and all of the knowledge on miniaturisation that
Sony’s highly skilled engineers and technologists possess. In addition, knowledge and other intellectual
property associated with products such as Sony’s are highly protected by patents and copyrights. So even
if a competitor uncovers knowledge, it must pay for that knowledge through licensing/royalties etc. Sony
leverages its knowledge to sustain competitive advantage and increase profitability.
Banks are another industry which profit immensely from knowledge sharing. If a bank enhances its
knowhow in evaluating credit risk, it should result in reduced loan losses.
Knowledge partitioning is about specialisation. It is often associated with restricting, withholding and
protecting knowledge. It mainly occurs where expertise needs to be protected. Knowledge is often held
by employees that have trained for years and dedicated their lives to specialise in their field (e.g.
physicists, engineers and technologists).
As access to information has increased significantly over the years,
knowledge partitioning (or protection) has become a critical issue.
Knowledge partitioning is mainly used by firms when the need for secrecy is paramount and fundamental
to sustaining competitive advantage. Knowledge partitioning mainly occurs in R&D departments within
organisations. But knowledge partitioning is also essential for
certain industries, such as Aerospace & Defence. An example is
that of the development of the F-117 Stealth Fighter by
Lockheed Martin. Ben Rich (formerly head of the ‘Skunk
Works’ Black Projects division of Lockheed Martin) gives an
insight in his book ‘Skunk Works’ into the knowledge
partitioning that took place while the Stealth Fighter was being
developed under his leadership. Firstly, the main concern was
for secrecy “For security, all those working on the airplane were jammed together in one comer of the
building” (Janos & Rich, 1994). These aircraft design engineers were not allowed to talk to other design
engineers within the company. This meant that their expertise could not benefit the development of other
Lockheed aircraft while the F-117 was being developed. Other employees who were involved in the
manufacturing of parts for the aircraft were put into ‘ice boxes’ i.e. they worked in remote buildings far
from the main action, assembling innocuous parts. Lockheed was deliberately creating big problems in
terms of efficiency and logistics, “I had no choice, I had to tuck away workers so that they could not
KNOWLEDGE PARTITIONING
guess what they were really working on” (Rich, 1994). The admission that efficiency was reduced as a
result of knowledge partitioning proves that ultimately, knowledge sharing is synergistic and beneficial.
Knowledge partitioning can be used to gain geographical and product mobility advantages. If a firm is
successful in expanding into a new country or market, for example, it is vital to protect that knowledge
from competitors that have not entered. Not only does this reinforce first-mover advantage, but it allows
a firm to introduce new products more quickly and easily.
Knowledge partitioning creates many problems for organisations. The biggest problem lies in retaining
knowledge workers. When individuals who possess tacit knowledge3 leave a company, they take all of
their knowledge with them and this is often disastrous because it is not documented anywhere. This
knowledge can be priceless to a competitor and may potentially destroy the original competitive
advantage. Although this is an extreme situation, it can easily happen if an employee is disgruntled for
some reason. Employee revenge is now easier and more effective thanks to internet.
Knowledge partitioning can also occur against a company’s wishes. Over the last two decades, job
insecurity has risen considerably. As a result, employees have resorted to withholding knowledge from
colleagues in order to enhance their promotion prospects and/or reduce the odds of being made redundant
by trying to increase their knowledge superiority. However, this kind of activity reduces a firrn’s
performance and would also magnify difficulties faced by a firm during a serious economic downturn or
recession. Besides, withholding knowledge is probably more likely to get an employee fired.
Levels of co-operation between companies through joint ventures, alliances and
outsourcing have increased considerably over the last few decades and this has
necessitated the sharing of knowledge between partners. However, this has also meant
that firms’ boundaries have increasingly become blurred in these types of ventures.
Therefore, these firms have had to protect certain knowledge from leaking to the other
party as they are often a competitor as well as a partner. An example is the relationship
between Hewlett-Packard and Intel. These two companies formed a joint venture to design the new 64-
bit Intel Itanium processor because both companies had vital knowledge on advanced semi-conductor
design. However, both companies also compete head-to head in the corporate server market4 and neither
company could afford to leak knowledge in this area to the other.
3 The “Automatic” box in Spender’s Taxonomy represents individuals that possess tacit knowledge.
4 In addition to other markets. The corporate server market is simply one of the biggest markets they both compete
in.
USING KNOWLEDGE SHARING AND KNOWLEDGE PARTITIONING SIMULTANEOUSLY
Locating and Valuing Knowledge Assets
According to Davenport and Prusak (1998), knowledge “originates and is applied in the minds of
knowers. In organisations, it becomes embedded not only in documents and repositories but also in
organisational routines, processes, practices and norms”.
Companies can perform intellectual capital audits, but in most organisations there is often reluctance to
adequately resource investigation into intangible assets that require careful auditing and monitoring.
Protecting Knowledge Assets
As mentioned earlier, knowledge assets are protected by:
• Property rights (patents, IP)
• Embedded routines
• Retaining knowledge workers
Leveraging Knowledge Assets to Achieve Sustainable Competitive Advantage
It is all very well having knowledge, but it can become trapped within ‘knowledge silos’ especially
within firms that have many divisions.
Organisational Rigidity
Companies must change over time, or their core capabilities may become core rigidities that lead to
obsolescence. As companies strive to move in new directions, knowledge-management systems will
need to change as new capabilities will be required.
The Internet. Intranets and Extranets
Knowledge can ultimately be derived from data and information. However, “radical changes in the
business environment have suggested limitations of the traditional information-processing view of
knowledge management” (Malhotra, 2000).
The internet has enabled knowledge sharing to become much easier, quicker and cheaper. Many firms
now use the internet for knowledge sharing (in addition to e-commerce) and it is considered to be such an
important resource that companies have taken the technology one step further and have developed and
deployed intranets and extranets which will now be discussed.
Intranets allow people within a firm to access corporate information through a web browser. The
difference between the internet and an intranet is that only people within the company can access
KEY ISSUES IN KNOWLEDGE SHARING
information through an intranet5. The
standards as the internet and so it is very easy to publish
intranet. Firms are now able to ensure
that they may need such as legal, health &
cost effective to give every employee this amount of
looked at. Training is also commonplace
tests. This provides HR and employees with instant
knowledge, competencies and methods of good practice
of those messages becoming distorted as they used to in the
misinterpreted or altered as they were fed down the hierarchy.
all forms of knowledge are shared within or
has been reduced by many orders of m
An Extranet is a business-to-business intranet that allows limited, controlled, secure access
company‘s intranet and designated, authenticat
benefit for organisations that have fo
to each other’s sensitive data about what
time they need to protect the rest of
sophisticated extranets on the Itanium project.
on chip design, specifications and software compatibility.
The Ford Supplier Network (FSN) extranet is part of
effort to reduce cycle time and inventory requirements
information about business processes with supplie
consumers. “Our suppliers were telling us that
streams of information coming at them that they needed to have tied together in some
said Ford CIO Bud Mathaisel (lnternetweek Online, 1999).
(discussed later), FSN is in the ‘Combination’ box
Such is the importance of intranets/extran
(appendix 2) have been formed who will design a complete knowledge
that simply do not have the time or the expertise to do
rising importance of sharing knowledge. A
Lucent Technologies and BAE Systems. How
companies like Autonomy fail to combine and integrate basic human
knowledge management systems because they are purely focused on
5 This restricted access is achieved through the use of
. The advantage of an intranet is that it is based on exactly the same
it is very easy to publish, maintain and update materia
Firms are now able to ensure that their entire workforce have access to all of the inform
that they may need such as legal, health & safety and pensions etc... Before intranets, it was simply not
cost effective to give every employee this amount of information in print because it would hardly ever be
so commonplace on intranets through on-line learning materials, assessments and
tests. This provides HR and employees with instant feedback. Intranets allow corporations to ensure that
knowledge, competencies and methods of good practice can be shared with all employees
of those messages becoming distorted as they used to in the past when communications were
ey were fed down the hierarchy. Intranets have revolutionised the way that
re shared within organisations. This is because the cost of knowledge sharing
been reduced by many orders of magnitude and secondly the efficiency of firms has
business intranet that allows limited, controlled, secure access
company‘s intranet and designated, authenticated users from remote locations. Extranets are a huge
that have formed alliances with each other. Such firms obviously require access
sensitive data about whatever product/service they may be working on, yet at the same
protect the rest of their confidential information. Intel and HP have been using
Itanium project. Their extranets are essential for exchanging in
ns and software compatibility.
The Ford Supplier Network (FSN) extranet is part of Ford’s ongoing
ime and inventory requirements by sharing
about business processes with suppliers, dealers and even
“Our suppliers were telling us that there were so many
streams of information coming at them that they needed to have tied together in some
Bud Mathaisel (lnternetweek Online, 1999). According to Nonaka and
FSN is in the ‘Combination’ box i.e. explicit→explicit knowledge sharing.
Such is the importance of intranets/extranets/internet that specialist companies such
(appendix 2) have been formed who will design a complete knowledge management
that simply do not have the time or the expertise to do so. Firms like Autonomy only exist because of the
rising importance of sharing knowledge. Autonorny’s clients include Merrill Lynch, General Motors,
t Technologies and BAE Systems. However, some argue that even knowledge
like Autonomy fail to combine and integrate basic human interaction and contact into their
ge management systems because they are purely focused on technology. “Effective
ved through the use of firewalls and secure computer networks.
n intranet is that it is based on exactly the same
update material that is put onto an
orkforce have access to all of the information
Before intranets, it was simply not
information in print because it would hardly ever be
line learning materials, assessments and
Intranets allow corporations to ensure that
can be shared with all employees with no danger
past when communications were
revolutionised the way that
of knowledge sharing
has increased.
business intranet that allows limited, controlled, secure access between a
Extranets are a huge
firms obviously require access
ever product/service they may be working on, yet at the same
Intel and HP have been using
Their extranets are essential for exchanging information
streams of information coming at them that they needed to have tied together in some productive way”
to Nonaka and Takeuchi’s model
sharing.
that specialist companies such as Autonomy
management solution for firms
Firms like Autonomy only exist because of the
Merrill Lynch, General Motors,
argue that even knowledge management
interaction and contact into their
“Effective knowledge
networks.
sharing requires a combination of many organizational elements - technology, human resource practices,
organisational structure and culture - in order to ensure that the right knowledge is brought to bear at
the right time” (Donoghue et al).
Effective knowledge sharing
Although knowledge sharing is important, it presents many problems for organisations. An indirect
result of knowledge sharing is that knowledge becomes commoditised more quickly. Therefore, the way
in which different types of knowledge is created and shared is an important consideration because it can
have many implications. These problems shall now be discussed by using the ‘Four Modes of
Knowledge Conversion’ model6 (Nonaka & Takeuehi, 1995) and in general.
Externalisation (Tacit→Explicit)
Nonaka & Takeuchi believe that tacit knowledge can be converted into explicit knowledge. Although
this seems illogical, let’s assume that it is possible. Once this type of knowledge is in explicit form, it can
no longer be a source of sustained competitive advantage. On the other hand, if this knowledge cannot be
converted into explicit knowledge then it is not possible to share this knowledge on a large scale.
Socialisation (Tacit→Tacit)
Sharing tacit knowledge with others usually occurs when people become socialised within an
organisation e. g. when employees join a company they will learn many things from colleagues. A firm’s
culture is a major influence in this learning process. However, only a limited amount of tacit knowledge
that can be shared in this way because the interactions between employees within an organisation will be
limited the departments/divisions in which those employees work. Therefore it is not possible to share
tacit knowledge on a mass scale.
Technology
Intranets can be a complete waste of money if a firm’s knowledge sharing strategy is wrong. Many
companies have implemented sophisticated intranets, common repositories and other systems, largely
ignoring the complex cultural issues that influence the way people behave around knowledge. “By and
large, those companies have seen little improvement in their ability to manage knowledge. Too often,
companies implement state-of-the-art technology and then discover that culture and behaviour are slow
to change” (Donoghue et al).
6 See appendix 3
Although there are many benefits to sharing knowledge, the fundamental thing that firms need to do
before they formulate knowledge-management strategy is to assess how knowledge-intensive their
industry is. Knowledge sharing is hugely beneficial to firms such as Microsofl, Sony, HP and Intel where
knowledge and intellectual property are paramount to their success. Employees within these firms
discuss the projects they are working on and solutions to problems they have encountered etc... Once this
knowledge is shared, it can be used to improve innovation, efficiency and productivity within the firm.
However, knowledge sharing would not benefit firms within the water industry as much, for example7.
There is only one type of water and new product development is non-existent. Even if all employees
within a water company knew everything there is to know about water it would make very little
difference to corporate performance and profits. Therefore, prioritising knowledge sharing within
industries such as this would be pointless as no competitive advantage would result from doing so.
Donoghue et al have devised a Knowledge Management Framework that helps firms to devise effective
knowledge sharing strategies. Their first grid (appendix 4) shows that it is the nature of the work that
determines the appropriate knowledge-rnanagement approach. Their second grid (appendix 5) shows the
appropriate knowledge managernent strategies that are required for the different types of work. The latter
grid shows that the ‘Collaboration model’ is where knowledge sharing is most critical and the ‘Expert
model’ is where ‘Capability Protection’ (effectively knowledge partitioning) is required. Appendix 6
shows the challenges faced in each model.
Successful knowledge sharing also depends on the problem solving culture of the organisation and its
employees. According to Dorothy L. Barton, organisations that regularly face and solve problems are
good at knowledge creating and diffusing activities (see appendix 7).
Other important points for firms to consider are how threatened they are by the erosion of differentiation,
competences and competitive advantage in advance of industry commoditisation. Intel is a company that
is facing such challenges. In the silicon-chip industry, the design of new microchip manufacturing
processes has always been considered something of an art - a collaborative model type of effort involving
a small group of experts, extensive experimentation and rapid learning to get it right. Now, however,
most PCs sell for less than $1,000 and therefore chip makers need to move to lower-cost approaches and
to an integration model of knowledge management, where the focus is on standardisation, repeatable
work and continuous improvement.
7 That is not to say that there is absolutely no knowledge sharing within water firms.
QUESTIONS SURROUNDING KNOWLEDGE SHARING
Senior Wall Street Analysts have also commented in the past year that microprocessors are on the verge
of becoming a commodity as volumes are so high (thanks mainly to the success of Intel’s rivals AMD
and VIA).
There is no one-size-fits-all way to effectively tap a firm’s intellectual capital. To create value,
companies must focus on how knowledge is used to build critical capabilities. Knowledge management
is “based on the premise that the focus should be placed on the way knowledge is used to build the
critical capabilities a company needs in order to succeed - on the core processes and activities that
enable it to compete” (Donoghue et al, 1999). As a result of the ‘Information Age’ in which we live,
there is no question that knowledge sharing will become critical in future in order to sustain competitive
advantage and increase efficiency and profitability. Knowledge partitioning will increasingly be limited
to the protection of core competencies and where technological secrecy is paramount in protecting a
company’s competitive advantage. In the future, a firm’s ability to change its knowledge sharing strategy
will be critical to its success “evolutionary ability will become increasingly important in the coming
years, as the demands of new markets and new competitors drive continuing shifts in corporate
strategies. To support those strategies, companies will have to build new capabilities more and more
rapidly – and so the ability to manage and share knowledge to support that change will be critical”
(Donoghue et al, 1999).
CONCLUSION
Grant, R.M Contemporary Strategy Analysis: (Blackwell Business, 3“ edition, 1998) Joachim, David (1999) Ford Rebuilds Extranet As Supplier Portal, InternetWeek URL: http://business.highbeam.com/138350/article-1G1-54650607/ford-rebuilds-extranet-supplier-portal Johnson, G & Scholes, K (1999) Exploring Corporate Strategy, Prentice Hall Europe Leigh P. Donoghue, Jeanne G. Harris and Bruce E. Weitzman (1999) KnowIedge management strategies that create value, Accenture URL: http://www.accenture.gr/SiteCollectionDocuments/PDF/knowledge2.pdf Malhotra, Yogesh (2000) Knowledge Management and New Organisation Forms: A Framework for
Business Model Innovation, Idea group Publishing Mintzberg, H. et al, The Strategy Process (Revised European Edition): (Prentice Hall, 1998) Nonaka, I & Takeuchi, H (1995), The Knowledge Creating Company, Oxford University Press Rich & Janos (1994) Skunk Works, Warner Books Ryan, Jerry (2000) The Strategic Benefits of Knowledge Management URL: www.techguide.com/ent/sec/benekm.pdf
BIBLIOGRAPHY
Appendix 1
Spender’s Taxonomy
Individual Organisational Explicit Tacit
Conscious
Scientific
Automatic
Communal
Appendix 2
Autonomy Autonomy Corporation develops and produces software, focusing on desktop solutions, data search applications, knowledge management and media server products, which are based on its own Dynamic Reasoning Engine (DRE) technology. The company has its main operations in the UK and USA. Competitors Autonomy operates within the pre-packaged software sector. It has 3 main competitors in the UK:
1. Macro 4 Plc 2. Eyretel Plc 3. Northgate Information Solutions
Sales Sales increased substantially in 2000 and they totalled £98.9m. This is an increase of 499% versus 1999, when the company’s sales were £16.5m. This was the 4th straight year of sales growth at Autonomy. The company’s sales increased faster in 2000 than at all three comparable companies. The company currently employs 93 people which means that sales per employee totalled a staggering £1,068,760 in 2000. Profitability In 2000, earnings before extraordinary items were £22m, or 22% of sales. The profit margin is an improvement over 1999, when the profit margin was -6.8% of sales. The company’s return on equity in 2000 was 102.6%. This was significantly better than the -5.1% return the company achieved in 1999. SWOT Analysis
Strengths
• Knowledge Management software is critical for firms wishing to increase their competitive advantage
• Pre-packaged software (rather than bespoke) means there is a huge market for products
• Market leader in the UK
• One of the few tech companies that has actually made a profit
Weaknesses
• Volatile share price
• Risk profile
• Highly capital intensive
Opportunities
• Expansion into Europe
• Expansion into Asia
• Online software sales to reduce costs and improve efficiency
Threats
• Continued slowdown in the tech sector
• Slowdown in the global economy
• Companies may delay investment into knowledge management systems in an economic slowdown
• Serious competition from Indian software firms who are entering the knowledge management software sector
Appendix 3
Knowledge Creating Process – The For Modes of Knowledge Creation
To
Tacit knowledge Explicit knowledge
Tacit knowledge From Explicit knowledge
Socialisation (sympathised knowledge)
Externalisation (conceptual knowledge)
Internalisation (operational knowledge)
Combination (systematic knowledge)
Appendix 4
Each model presents its own distinct set of knowledge-management challenges:
• Transaction model, in which there is a low degree of both interdependence and complexity. Work is
typically routine, highly reliant on formal rules, procedures and training, and depends on a workforce
that exercises little discretion.
• Integration model, in which there is a high degree of interdependence and a low degree of
complexity. Work is systematic and repeatable, relies on formal processes, methodologies and
standards, and depends on tight integration across functional boundaries.
• Expert model, in which there is low interdependence and high complexity. Work requires judgment
and is dependent on "star performers".
• Collaboration model, in which there is a high degree of both interdependence and complexity.
Work involves improvisation and learning by doing, and relies on deep expertise across functions and
the use of flexible teams.
Appendix 5
Appendix 6
Appendix 7
Knowledge Creating and Diffusing Activities
D. Leonard-Barton
Core
Capabilities
Problem
Solving
Implementing
and
Integrating
Experimenting
Importing
Knowledge