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Journal of Knowledge Management
Emerald Article: A resource-based view of organizational knowledge
management systems
Peter Meso, Robert Smith



Article information:
To cite this document: Peter Meso, Robert Smith, (2000),"A resource-based view of organizational knowledge management systems",
Journal of Knowledge Management, Vol. 4 Iss: 3 pp. 224 - 234
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Introduction
A resource-based view                                           The resource-based view (RBV) of the firm
of organizational                                               defines a strategic asset as one that is rare,
knowledge management                                            valuable, imperfectly imitable and non-
                                                                substitutable. An asset should meet all
systems                                                         conditions concurrently to qualify as a strategic
                                                                asset (Peteraf, 1993; Michalisn et al., 1997;
Peter Meso and                                                  Wernerfelt, 1984). With the advent of
Robert Smith                                                    knowledge management (KM), intellectual
                                                                capital is gaining increasing recognition as the
                                                                only true strategic asset (Hamel, 1998). This
The authors                                                     has led to a proliferation of organizational
Peter Meso and Robert Smith are both Professors in the          knowledge management systems (OKMS), for
Department of Management and Information Systems,               managing intellectual capital. However,
Kent State University, Kent, Ohio, USA.                         according to the resource-based view, tangible
                                                                assets are not strategic because they can be
                                                                acquired or imitated. Thus this paper addresses
Keywords
                                                                the question: ``Are OKMS strategic assets
Knowledge management,                                           within the context of the resource-based view?''
Knowledge management systems, Explicit knowledge,                  The answer to this question is pertinent in
Tacit knowledge, Competitive advantage,                         enabling the firm to determine whether it is
Organizational learning                                         strategically wise to capture and share its
                                                                knowledge via an OKMS. Should it be that an
Abstract                                                        OKMS eliminates the intangibility of tacit
With the advent of knowledge management, intellectual           knowledge, it may not be strategically wise to
capital is gaining increasing recognition as the only true      invest the firm's knowledge in an OKMS.
strategic asset. This has led to a proliferation of             Doing so would render the otherwise strategic
organizational knowledge management systems (OKMS),             asset non-strategic, easily acquired or
for managing intellectual capital. This article addresses       replicated by competitors, and hence dilute
the question: ``Are OKMS strategic assets within the            the sustainable competitive advantage of the
context of the resource-based view?'' Two views of OKMS         firm. Alternatively, should it be that an
emerge ± the technical and the socio-technical view. An         OKMS enables a firm to leverage the strategic
analysis of OKMS from each perspective is presented and         value of its knowledge, it would be advisable
their resultant implications on the competitive position of     to invest the firm's knowledge in such an
the firm explained. The findings indicate that, for a firm to   OKMS (Peteraf, 1993; Michalisn et al., 1997;
reap long-term strategic benefit from OKMS, it should           Wernerfelt, 1984).
adapt the broader socio-technical view when developing,            The first part of the paper defines strategic
implementing and managing its OKMS. This suggests that          assets, while the second part reviews KM.
firms need to consider not only the technology but also         The third part defines OKMS, presenting the
the organizational infrastructure, the organizational           common views of such systems and analyzing
culture and the people who form the OKMS, and the               how each view influences the strategic value
knowledge that is to be processed by these OKMS.                of the OKMS.

Electronic access
The current issue and full text archive of this journal is      Strategic assets
available at
                                                                The resource-based view holds that the
http://www.emerald-library.com
                                                                resources a firm holds can determine the
                                                                firm's sustainable success in a given market. It
                                                                specifies that there are two types of assets,
                                                                strategic and non-strategic. Non-strategic
                                                                assets do not contribute to the long-term
                                                                success of the firm. Sustainable competitive
Journal of Knowledge Management
Volume 4 . Number 3 . 2000 . pp. 224±234                        success results only from strategic assets
# MCB University Press . ISSN 1367-3270                         (Figure 1). Four conditions jointly define the
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                Peter Meso and Robert Smith                            Volume 4 . Number 3 . 2000 . 224±234


Figure 1 Relationship of strategic assets to sustainable competitive advantage




characteristics of a strategic asset ± valuable,            are so ingrained as to be taken for granted. It
rare, imperfectly imitable, and non-                        resides within the individual and is difficult to
substitutable. A resource is valuable if it                 express in words. Every employee has a
allows the firm to exploit the opportunities in             wealth of tacit knowledge deeply rooted in
the market or thwart competitive threats. If it             his/her actions, and his/her commitment to ``a
is owned by a very small number of all the                  particular craft or profession, a particular
firms in the industry, then it is rare. It is               technology, a product market, or the activities
imperfectly imitable if it can be sustained for             of a work group or team'' (Nonaka, 1991). In
long periods of time without competitors                    most organizations, tacit knowledge is rarely
replicating or acquiring it. Finally, it is non-            shared or communicated. Therefore, it is
substitutable if it has no strategic equivalents.           often lost when the individual possessing it
Because all tangible assets can either be                   leaves the organization. Tacit knowledge can
imitated or acquired, they are not strategic.               also be seen as that knowledge which resides
Therefore, a further quality for strategic assets           in the culture of the organization (Figure 2).
is that they are intangible. The resource-based             An example is self-motivated creativity, which
view also operates under two assumptions:                   refers to the will, motivation, and adaptability
that ex-ante conditions to competition exist                for success exhibited by employees working
and that the ex-post conditions to competition              within certain corporate cultures. It is difficult
can be maintained (Wernerfelt, 1984;                        to identify the precise cause of care-why. But
Michalisn et al., 1997; Peteraf, 1993).                     literature on KM acknowledges that high
                                                            levels of care-why significantly enhance the
                                                            overall performance of the firm (Davenport et
Knowledge management                                        al., 1998). Other examples include
                                                            organizational tacit knowledge, which
KM is the process of capturing the collective               comprises such knowledge as causal
expertise and intelligence in an organization               ambiguity ± the inexplicable chemistry of
and using them to foster innovation through                 resources that provides sustainable
continued organizational learning (Nonaka,                  competitive advantage to a firm (Michalisn et
1991; Quinn et al., 1996; Davenport et al.,                 al., 1997), and cultural tacit, which is the
1998). According to Nonaka, two types of                    inexplicable knowledge resident in the
knowledge reside in any organization ± tacit                corporate culture (Michalisn et al., 1997).
and explicit knowledge. Tacit knowledge                        Explicit knowledge is knowledge that can be
consists of mental models, beliefs and                      codified. Because it is easily shared and
persuasions of each individual employee that                communicated, most organizations have
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                Peter Meso and Robert Smith                           Volume 4 . Number 3 . 2000 . 224±234


Figure 2 The knowledge matrix




captured this knowledge in ordered                          organizational learning. Therefore, KM can
repositories, systems, or operating                         be viewed as the creation of sustainable
technologies of the firm, thus making it                    competitive advantage through continued
available to all the members of the                         organizational learning (Figure 3). Since the
organizations. There are three types of                     ``value of the intellect increases markedly as
explicit knowledge resident in any                          one moves up the intellectual scale from
organization ± cognitive knowledge, advanced                cognitive knowledge through advanced skills
systems skills, and systems understanding                   and systems thinking to self-motivated
(Figure 2). Cognitive knowledge, also termed                creativity'', enhancing intellectual capital
``know-what'', is the ``basic mastery of a                  within the firm assures the sustainable
discipline that professionals achieve through               competitive advantage of the firm (Nonaka,
extensive training and certification'' (Quinn et            1991; Quinn et al., 1996; Hamel, 1998).
al., 1996). Advanced skills or ``know-how''                    The major goal of KM is to enhance
refer to the ``ability to apply rules of a                  innovation. In a bid to achieve this goal and to
discipline to complex real-world problems''                 maximize the benefits that can be derived from
(Quinn et al., 1996). Systems understanding,                effective KM, many firms are investing heavily
also termed ``know-why'' is the deep                        in the development of OKMS aimed at
understanding of the web of cause-and-effect                supporting knowledge work and enhancing
relationships underlying a discipline (Quinn et             organizational learning (Davenport et al., 1998).
al., 1996; Nonaka, 1991).                                   However, there are differences in what firms
   Organizational learning is the process of                perceive an OKMS to be. Such differences have
continued innovation through the creation of                resulted in two common perceptions of OKMS:
new knowledge (Quinn et al., 1996; Nonaka,                  the technical perception; and the socio-technical
1991). It is an ongoing process that takes                  perception. Each perception is examined in the
place as employees engage in knowledge work                 next section. The implications of each
(Davenport et al., 1998). Nonaka (1991)                     perception on the approaches used to develop
states that organizational learning emanates                OKMS, and the resultant impact on the
from the iterative process of articulation and              sustainable competitive positions of the firms are
internalization. Articulation occurs when an                also examined.
employee's tacit knowledge is captured as
explicit knowledge and internalization occurs
when this captured explicit knowledge is then               Organizational knowledge management
transformed into another employee's tacit                   systems
knowledge. Therefore, organizational
learning occurs at the intersection of tacit and            From the perspective of knowledge work, an
explicit knowledge during the interaction of                OKMS is a system that provides for the
the various employees, departments or teams                 creation of new knowledge, the assembly of
in a firm (Nonaka, 1991).                                   externally created knowledge, the use of
   Sustainable competitive advantage results                existing knowledge, and the finding of
from innovation. Innovation in turn results                 knowledge from internal and external sources.
from the creation of new knowledge. New                     Nonaka's spiral of knowledge creation leads
knowledge is created in the process of                      to the definition of an OKMS as that which
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                Peter Meso and Robert Smith                          Volume 4 . Number 3 . 2000 . 224±234


Figure 3 How knowledge relates to organizational learning and sustainable competitive advantage




supports organizational learning by enhancing               geographically dispersed professionals.
the exchange and sharing of tacit and explicit              Examples of group-ware software products
knowledge (Figure 3). Taking Quinn et al.'s                 being marketed as OKMS are Lotus Notes,
(1996) definition of intellectual capital, an               Network Delivery Knowledge, and Fulcrum
OKMS can be seen as that which organizes a                  Knowledge Network. Lotus Notes is the most
firm's know-what, know-how, and know-why                    widely used. Lotus Notes is a document
into explicit knowledge resident in the firm's              database that enables the communication
databases and operating technologies                        between colleagues, the collaboration among
(Nonaka, 1991; Quinn et al., 1996;                          teams, and the co-ordination of strategic
Davenport et al., 1998; Sviokla, 1996). The                 business processes within an organization. It
advent of KM has resulted in two                            can contain both structured and unstructured
predominant perspectives of what constitutes                content, thereby surpassing limitations that
an OKMS ± the technical perspective and the                 relational databases impose on the
socio-technical perspective. Following are                  organization. Notes uses replication
descriptions and analyses of each.                          technology to allow users in diverse locations
                                                            to access the same knowledge. It supports
The technical perspective                                   e-mail, pull and push technologies, and work
This perspective holds that an OKMS is an                   flow automation. The software also provides
advanced assembly of software, and its                      up to four levels of security: authentication,
associated hardware infrastructure, for                     access control, field-level privacy, and digital
supporting knowledge work and/or                            signatures (IBM, 1998; Kurchak Associates,
organizational learning through the free                    1998; Fulcrum, 1998; Hibbard, 1997).
access to and increased sharing of knowledge                   Group-ware technologies, including Lotus
(Figure 4). The technology-centered OKMS                    Notes are developed by independent software
in use today are employing one technology or                houses and sold to any willing buyer.
a combination of ten key technologies: group-               Therefore, they are easily acquired. The
ware, messaging, Web browsers, document                     security features found in any group-ware
management, search and retrieval, data                      system do not prevent the imitability of the
mining, visualization, push technology, group               knowledge resident in the system. Lotus
decision support, and intelligent agents. Of                Notes, for example, employs RSA public key
these group-ware and Web browser                            encryption technology ± the de facto industry
technologies are the most prominent                         standard ± to secure the knowledge resident in
(Hibbard, 1997; Chaffey, 1998).                             its knowledge bases (IBM, 1998). However,
  Group-ware software packages are                          because this security standard is also used by
advanced decision support systems developed                 other organizations in the industry, it is not
to enhance collaborative group work, between                proprietary. Mechanisms employed by
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Figure 4 The technical perspective of a knowledge management system




corporate intelligence agents, industrial                   commitment to the system. Finally, Web
espionage experts, and computer hackers may                 technologies adapt the natural way of
enable unauthorized users to circumvent the                 communication between individuals. They
security controls and access strategic                      surpass organizational hierarchies, formal
corporate knowledge (Crock et al., 1996)                    communication policies, physical barriers,
resident in the group-ware's knowledge bases.               and social groupings to make available to
Therefore, when viewed solely from a                        everyone knowledge articulated by any other
technological perspective, group-ware                       professional. However, these technologies do
technologies do not satisfy the requirements                not provide for the development of well-
of a strategic asset. The strategic value of                structured KM systems. Web-based KM
group-ware does not result from the quality of              systems are thus difficult to manage, maintain
technology used to develop these systems.
                                                            and evaluate. Such systems do not allow the
   Web-based technologies entail employing a
                                                            organization to keep an accurate inventory of
Web browser to access knowledge resources
                                                            the intellectual capital it possesses and what
on the Internet or on intranets that link
                                                            the true value of these assets is (Hibbard,
geographically dispersed professionals. These
                                                            1997; IBM, 1998; Musciano and Kennedy,
technologies are popular with most
                                                            1996).
organizations for several reasons. First, they
                                                              From a resource-based view, Web
allow for the in-house development of KM
systems, hence building some proprietary                    technologies may provide limited strategic
characteristics into the system. Second, they               advantages. For example, Web browsers are
allow for the development of a naturally                    not rare ± they are easily acquired. The Web
expanding, flexible and easy to use KM                      pages developed by these browsers are easily
system. This encourages employees to take                   imitated. Further, Web-based systems have
advantage of the system. Third, because it is               substitutes in group-ware, messaging,
very simple to develop Web pages, the                       document management, push technologies,
employees themselves do most of the                         intelligent agents, search and retrieval, and
development of the OKMS. This not only                      data mining technologies. The strategic value
minimizes the cost of developing the OKMS,                  of Web-based KM systems is thus greatly
it also enhances employee participation and                 diluted. Therefore, taken on their own,
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Web-based technologies do not constitute                        knowledge management can be viewed as a
strategic assets.                                               socio-technical system of tacit and explicit
                                                                business policies and practices. These are
                                                                enabled by the strategic integration of
Socio-technical perspective
                                                                information technology tools, business
The socio-technical perspective recognizes
                                                                processes, and intellectual, human, and social
that there is more to OKMS than mere                            capital.
technology. Under this perspective, OKMS
are seen as being complex combinations of                   Technology infrastructure comprises the
technology infrastructure, organizational                   hardware, software, middle-ware and
infrastructure, corporate culture, knowledge,               protocols that allow for the encoding and
and people (Figure 5). Carayanis (1998)                     electronic exchange of knowledge. Three
concurs with this by stating that:                          types of technology infrastructure are found
  While information technology can be considered            in an OKMS: knowledge oriented
  as a value-adding technological infrastructure,           technologies, function oriented technologies,

Figure 5 Organizational knowledge infrastructure and its relation to sustainable competitive advantage




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and specialty oriented technologies.                        engineers are able to gain insightful
Knowledge oriented technologies such as                     knowledge about the customers, customer
group-ware and Web browsers directly                        needs, trends in consumer tastes and the
process knowledge work and the sharing of                   evolution in consumer behavior that allows
knowledge within the organization. Function                 them to remain in front of the innovation
oriented technologies such as office                        curve. Thus by effectively harnessing the
automation, robotics and desk-top computing                 capabilities provided by information
technologies support operational level                      technologies, Ford is attempting to create a
activities such as data processing, production,             sustainable competitive advantage in the auto
and service delivery while collecting the data              industry (Kerwin, 2000).
that eventually get refined into information                   Organizational infrastructure refers to the set
and further into knowledge for use in                       of roles and organizational teams whose
organizational learning. Specialty oriented                 members have skills to serve as resources for
technologies support highly specialized                     individual projects. The way these roles relate to
functions within the firm. Usually these are                each other within the context of the
those functions that require high levels of                 organization's structure defines the
know-how. Examples of these technologies                    organizational infrastructure. The organizational
include computer-aided design and                           infrastructure defines the organization's
manufacture (CAD/CAM) software, and                         management style and philosophy. It
expert systems software (Davenport et al.,                  determines how the employees of the firm are
1998; Hibbard, 1997).                                       organized into formal and informal teams of
   All the technology infrastructure used in                departments; how these teams interact formally
OKMS (including software) is tangible.                      and informally; and the role and goals of each
Because this technology infrastructure is                   team and how these relate to the overall
largely software-dependent, it is easily                    corporate strategy (Davenport et al., 1998).
replicated, copied, pirated, reverse-                          Organizational infrastructure is intangible.
engineered or cloned, even when protected by                No two organizational infrastructures are
regulatory assets such as copyrights, patents               alike. Well-developed organizational
and licenses. The hardware infrastructure                   infrastructure can be a source of sustainable
found in OKMS is largely standard and thus                  competitive advantage. This advantage is not
easily imitated. Therefore, the technology                  derived from the organization's hierarchy.
component of the OKMS is not a strategic                    Rather it is derived from the dynamic
asset (Michalisn et al., 1997; Wernerfelt,                  interaction of the teams and individuals that
1984; Long, 1994).                                          make up the hierarchy. Though it may be easy
   The Ford Motor Company is a clear                        to replicate or imitate the organization's
example of a firm that is re-inventing its                  hierarchy, it is extremely difficult to replicate
corporate architecture by investing heavily in              the precise nature of interaction between the
technologies for KM systems. It is using KM                 roles and the teams in the hierarchy. The
systems to redefine the auto manufacturing                  more advanced the organizational
industry, gain a competitive stronghold in                  infrastructure, the greater the economic rents
emergent electronic markets, and get closer to              it will generate for the organization.
its customers. The firm has established the                 Therefore, organizational infrastructure is a
autoxchange mart ± an information                           strategic asset (Davenport et al., 1998;
technology-intensive KM and electronic                      Michalisn et al., 1997).
commerce system intended to shift the car-                     Federal Express (FedEx) is an example of a
manufacturing model from the conventional                   firm that has built an information-technology
``push'' business model to the emergent                     intensive global organizational infrastructure
``pull'' model. In the ``pull'' model, the                  that meets the criteria of a strategic asset. The
consumer determines the precise                             organizational infrastructure effectively
configuration of the car before it is                       connects the internal and external
manufactured. Thus, consumers get highly                    stakeholders at FedEx to each other in an
customized products while the firm saves                    online, real-time mode. In this way it allows
substantial amounts of capital that would                   FedEx to dynamically exchange knowledge
otherwise be tied up in large inventories of                with its customers, vendors, suppliers and
finished products. Further, auto designers,                 trade partners while effectively transacting the
financiers, marketers, and production                       firm's core business functions. Further, all
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employees at the firm have instantaneous                    organization's databases, systems, and
access to the knowledge resources resident in               operating technologies. In so doing, they
its technologies, databases and operating                   make personal knowledge available for
procedures. Employees can easily interact                   corporate use. Further, they tap into the
across time zones, political borders, business              corporate pool of explicit knowledge,
divisions, and organizational hierarchy levels              internalizing it into personal tacit knowledge
in a real-time online mode, thereby                         that they then use to generate new knowledge.
facilitating instantaneous exchange of                      This new knowledge is then articulated back
knowledge. While it may be possible to                      into the corporate databases, systems and
imitate the technological infrastructure at                 operating technologies, further expanding the
FedEx, it is extremely difficult to replicate an            corporation's intellectual assets (Quinn et al.,
organizational structure equivalent to                      1996; Nonaka, 1991; Davenport et al., 1998;
FedEx's in complexity, behavior, and                        Sviokla, 1996; Michalisn et al., 1997).
productivity. A case in point is United Parcel                As individuals, employees do not meet the
Service (UPS) and Document Handling                         requirements for a strategic asset. They easily
Services (DHL) which have OKMS that are                     transfer from one organization to the next.
almost as elaborate, global and extensive as                Their productivity depends on a complex
that at FedEx, yet enjoy significantly smaller              combination of factors: motivation, reward,
market share both globally and domestically                 skill levels, experience, health and even
when compared to FedEx (Rao et al., 1999).                  emotional factors. However, as teams or units
   General Electric is yet another firm that has            of workers, employees satisfy the conditions
developed a ``social architecture'' that enables            of a strategic asset. The teams formed by the
it to keep ahead of its competitors in almost               employees, and the synergies emanating from
all the markets it serves. The organizational               these teams, result in organizational learning.
infrastructure at General Electric has                      Organizational learning is a strategic asset.
facilitated the maturing of this social                     Since it is the collaboration between
architecture by allowing a seamless flow of                 employees that enables the process of
knowledge across all employees regardless of                organizational learning, the collection of
their position, authority, or geographical                  employees ± human resources in total ± is a
postings. Hence, suggestions from anyone in                 strategic asset. Said another way, because the
the firm are quickly assessed through a                     employees are the custodians and developers
specific process called ``Work out'' (Layne,                of intellectual capital, when they work
2000). While it may be easy to replicate                    together or collaborate, they constitute a
General Electric's organizational hierarchy,                strategic asset (Michalisn et al., 1997; Grant,
the fabric that holds its organizational                    1998; McNearney, 1996; Spitzer, 1996;
infrastructure together, thereby facilitating a             Nonaka, 1991; Quinn et al., 1996).
productive ``social architecture'' and highly                 Leading consulting firms have continued to
effective knowledge sharing processes such as               maintain a lead in investing in their employees
``work out'', is extremely difficult to replicate,          as a core element of their strategic competitive
imitate or even substitute. In that sense it is             advantage. Strategy consulting firms such as
also valuable and rare.                                     Bain, Boston Consulting Group and
   The core of the OKMS is the people. This                 McKinsey have developed elaborate
component includes all the organization's                   information-technology enabled KM systems
stakeholders ± employees, owners, customers,                that accentuate dialogue between individuals
suppliers and regulators/legislators. However,              rather than knowledge objects in a database.
employees are the most significant                          They make effective use of communities of
participants. Employees are the key source of               practice, brainstorming sessions, one-on-one
the intellectual capital acquired and managed               conversations, apprenticeship, and computer-
by the OKMS. Intellectual capital is an                     supported collaboration and group work
intangible asset. It is also rare, valuable, non-           technologies to keep their employees actively
substitutable and difficult to imitate.                     engaged in perpetual organizational learning
Therefore, intellectual capital is a strategic              (Hansen et al., 1999).
asset. Further the employees propel the                       Microsoft is another example of a firm that
organizational learning process. They                       has developed a successful KM system using
articulate personal tacit knowledge into the                the socio-technical approach. It has, over the
explicit knowledge resident in the                          past decade, quietly assembled over 245 of
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                Peter Meso and Robert Smith                          Volume 4 . Number 3 . 2000 . 224±234


the brightest researchers from around the                   always charge the lowest fare ± but they
globe and provided them with resources to                   cannot copy its culture. Indeed, Southwest
conduct leading-edge research and                           Airlines has ranked among the top ten
development of future software products. The                corporations best to work for in the USA over
organizational infrastructure that Microsoft                the past few years. It has also remained a
has established to support its researchers and              dominant player in the very competitive
product developers facilitates a rich exchange              airline industry. Its culture allows its
of knowledge across disciplines hitherto                    employees to acquire knowledge quickly both
considered remotely related. Yet Microsoft                  from its clients and from fellow employees. It
has been able to tap the ensuing knowledge                  allows employees to use the knowledge
into its products, hence expanding its market               instantaneously as they make decisions, and
share very rapidly while remaining well at the              encourages employees to disseminate their
forefront of innovation in the software                     knowledge to colleagues. Its culture rewards
industry. Like General Electric it has been                 learning and the development of others. As
able to expand its product offerings,                       such Southwest's employees are able to
reshaping itself successfully as the business               provide very high levels of customer
environment evolved from the standalone                     satisfaction, thus generating the repeat
Personal Computer, to the Client-Server                     business that keeps it competitive (Colvin,
Architecture and more recently to the                       1997).
Internet and Electronic Commerce business                      Knowledge may be tangible or intangible in
models. While technology is an integral part                nature. Know-what, know-how, and know-
of its KM system, people are even more                      why, when articulated into the organization's
important. So are the culture and the                       database and operating technologies, are
organizational infrastructure that cement the               tangible. Similarly, explicit knowledge is
interactions of its people and technology                   tangible because it has been encoded into
components, hence generating the knowledge                  documents, databases, or some other
that keeps Microsoft competitive (Stross,                   permanent medium. Explicit knowledge
1997; Kurtzman, 1998).                                      exhibits strategic characteristics only when it
  Culture refers to the shared beliefs, norms,              is proprietary. For this type of knowledge to
ethics and practices within an organization. A              remain proprietary, it has to be protected
knowledge friendly culture is one in which the              from other parties. Such protection is
employees highly value learning and exhibit a               achieved through legal assets such as patents
positive orientation to knowledge. It is one in             or copyrights, or through security features
which experience, expertise and rapid                       such as access controls and encryption. When
innovation are held to be more important                    explicit knowledge is captured on electronic
than hierarchy. Such a culture deeply                       media it becomes increasingly vulnerable to
embraces knowledge and the opportunities                    piracy regardless of the types of protection
that come with learning. A knowledge                        being used to protect it. Piracy dilutes the
unfriendly culture, on the other hand, is one               strategic value of knowledge. Therefore,
that neither values nor rewards knowledge.                  articulating knowledge makes it easier to
Culture is intangible. It is unique to each                 acquire and/or imitate that knowledge, hence
organization. A knowledge friendly culture                  diluting its strategic properties (Quinn et al.,
cannot be replicated, imitated, acquired or                 1996; Michalisn et al., 1997; IBM, 1998;
substituted. It develops within the                         Crock et al., 1996).
organization, and remains unique to that                       Tacit knowledge, on the other hand, is
organization. Therefore, a knowledge friendly               intangible. However, it only becomes strategic
culture is a strategic asset.                               when used to advance the objectives of the
  Southwest Airlines is an example of a firm                firm. When this knowledge is not used in the
that has developed a world-acclaimed positive               interest of the firm, it does not contribute any
corporate culture that has contributed                      value to the firm. Because tacit knowledge
significantly to its corporate success. In the              resides in an individual, its benefits are not
words of Southwest Airline's founder, Herb                  long-term. It is lost when the individual leaves
Keller, Southwest's competitors can do                      the organization. Therefore, tacit knowledge,
everything it does ± fly one type of aircraft,              though rare, non-substitutable, inimitable,
serve no meals, transfer no luggage, give no                and valuable (when used to advance
assigned seats, fly mostly short hauls, and                 corporate goals), does not satisfy the ex-post
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                Peter Meso and Robert Smith                             Volume 4 . Number 3 . 2000 . 224±234


conditions of a strategic asset. Further,                   by articulating this asset and thus making it
because tacit knowledge can be captured as                  readily available to competitors.
explicit knowledge through the process of
articulation, it becomes possible to acquire.
These two observations limit the strategic                  References
value of tacit knowledge (Michalisn et al.,
1997; Peteraf, 1993; Wernerfelt, 1984).                     Carayanis (1998), ``The strategic management of
   Care-why, the knowledge that resides in the                    technological learning in project/program
culture of a firm, is also intangible. Unlike                     management: the role of extranets, intranets and
                                                                  intelligent agents in knowledge generation,
tacit knowledge it cannot be articulated into
                                                                  diffusion, and leveraging'', Technovation, Vol. 18
explicit knowledge. However, care-why is
                                                                  No. 11, pp. 697-703.
largely related to the culture of the                       Chaffey, D. (1998), Groupware, Workflow and Intranets:
organization. It has strategic value only when                    Reengineering the Enterprise with Collaborative
the culture of the organization is knowledge                      Software, Digital Press, Boston, MA.
friendly. This is because such cultures foster              Colvin, G. (1997), ``The changing art of becoming
the development of care-why. A culture that is                    unbeatable'', Fortune, 24 November, pp. 299-300.
                                                            Crock, S., Smith, G., Weber, J., Melcher, R.A. and
not knowledge friendly stigmatizes care-why,
                                                                  Himelstein, L. (1996), ``They snoop to conquer'',
thereby incapacitating organizational learning
                                                                  Business Week, 28 October, pp. 172-6.
and the resultant benefits. Therefore, the                  Davenport, T.H., De Long, D.W. and Beers, M.C. (1998),
strategic value of care-why is tied to the                        ``Successful knowledge management projects'',
strategic value of the organization's culture                     Sloan Management Review, Winter, pp. 43-57.
(Quinn et al., 1996; Michalisn et al., 1997;                Fulcrum (1998), Fulcrum Knowledge Network, http://
Davenport at al., 1998).                                          www.fulcrum.com/english/products/fknhome.htm,
   On the whole the socio-technical                               9 April, p. 1.
                                                            Grant, L. (1998), ``Happy workers ± high returns'', Fortune,
perspective enables a firm to reap sustainable
                                                                  12 January, p. 81.
competitive advantages from its OKMS                        Hamel, G. (1998), Strategic Flexibility: Managing in a
(Figure 5). The organization that develops its                    Turbulent Economy, Wiley, Chichester, UK.
OKMS, so that the intangible components                     Hansen, M., Hansen, N. and Tierney, T. (1999), ``What's
are strategically and appropriately                               your strategy for managing knowledge?'', Harvard
synchronized with a well-developed                                Business Review, March, pp. 106-16.
                                                            Hibbard, J. (1997), ``Knowing what we know'',
technology infrastructure, acquires a system
                                                                  Informationweek, 20 October, pp. 46-64.
that is rare, difficult to imitate, valuable and            IBM (International Business Machines) (1998), ``Lotus
non-substitutable. Such a system is strategic                     notes: an overview'', http://www.lotus.com/core/
and will accord the firm the sustainable                          content.htm, 25 April, pp. 1-12.
strategic advantages it needs to leverage its               Kerwin, K. (2000), ``At Ford, e-commerce is job 1'',
competition.                                                      Business Week, 28 February, pp. 74-8.
                                                            Kurchak Associates (1998), ``Network delivery
                                                                  knowledge'', http://www.coursewaresource.com/
                                                                  kurchak/, 9 April, p. 1.
Conclusion                                                  Kurtzman, J. (1998), ``An interview with Brian Arthur'',
                                                                  Strategy and Business, 2nd quarter, pp. 95-103.
In order to leverage its strategic competitive              Layne, R. (2000), ``GE chief outlines strategies for future'',
position, a firm needs to adopt the socio-                        The Beacon Journal, 26 February.
technical perspective when developing its                   Long, L. (1994), Introduction to Computers and
OKMS. In so doing it addresses all the                            Information Processing, 4th ed., Prentice-Hall Inc.,
                                                                  Upper Saddle River.
components pertinent to the implementation
                                                            McNearney, D.J. (1996), ``Employee motivation:
of the OKMS as a strategic system by giving                       creating a motivated workforce'', HR Focus, August,
appropriate focus to those components that                        pp. 1-6.
generate sustainable competitive advantage.                 Michalisn, M., Smith, R. and Kline, D. (1997), ``In search of
OKMS that simply exploit the tangible                             strategic assets'', revised and submitted to the
aspects of knowledge do not leverage the                          International Journal of Organizational Analysis,
firm's sustainable competitive advantage. On                      August, pp. 1-39.
                                                            Musciano, C. and Kennedy, B. (1996), HTML:
the contrary, they dilute the sustainable
                                                                  The Definitive Guide, O'Really & Associates,
competitive position of the firm. Therefore                       Bonn.
organizations that adapt this approach risk                 Nonaka, I. (1991), ``The knowledge creating company'',
losing their true source of sustainable                           Harvard Business Review, November-December,
competitive advantage ± intellectual capital ±                    pp. 96-104.
                                                          233
View of organizational knowledge management systems                   Journal of Knowledge Management
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Peteraf, M.A. (1993), ``The cornerstones of competitive       Stross, R. (1997), ``Mr Gates builds his brain trust'',
      advantage: a resource-based view'', Strategic                 Fortune, 8 December, pp. 84-98.
      Management Journal, Vol. 14, pp. 179-91.                Sviokla, J.J. (1996), ``Knowledge workers and radically
Quinn, J.B., Anderson, P. and Finkelstein, S. (1996),               new technologies'', Sloan Management Review,
      ``Managing professional intellect: making the most            Summer, pp. 25-40.
      of the best'', Harvard Business Review, March-April,    Wernerfelt, B. (1984), ``A resource-based view of the
      pp. 71-80.                                                    firm'', Strategic Management Journal, Vol. 5,
Rao, B., Navoth, Z. and Horwitch, M. (1999), ``Building a           pp. 171-80.
      world class logistics, distribution and electronic      William, M.L. and MacDermid, S.M. (1994), ``Linkages
      commerce infrastructure'', Electronic Markets, Vol. 9         between employee benefits and attitudinal and
      No. 3, pp. 174-80.                                            behavioral outcomes: a research review and
Spitzer, D.R. (1996), ``Rewards that really motivate'',             agenda'', Human Resources Management Review,
      Management Review, May, pp. 45-50.                            Vol. 4 No. 2, pp. 131-60.




                                                           234

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A resource based view of organizational knowledge management systems

  • 1. Journal of Knowledge Management Emerald Article: A resource-based view of organizational knowledge management systems Peter Meso, Robert Smith Article information: To cite this document: Peter Meso, Robert Smith, (2000),"A resource-based view of organizational knowledge management systems", Journal of Knowledge Management, Vol. 4 Iss: 3 pp. 224 - 234 Permanent link to this document: http://dx.doi.org/10.1108/13673270010350020 Downloaded on: 07-12-2012 References: This document contains references to 27 other documents Citations: This document has been cited by 47 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 5858 times since 2005. * Access to this document was granted through an Emerald subscription provided by UNIVERSITY OF THE ARTS LONDON For Authors: If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service. Information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.com With over forty years' experience, Emerald Group Publishing is a leading independent publisher of global research with impact in business, society, public policy and education. In total, Emerald publishes over 275 journals and more than 130 book series, as well as an extensive range of online products and services. Emerald is both COUNTER 3 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. *Related content and download information correct at time of download.
  • 2. Introduction A resource-based view The resource-based view (RBV) of the firm of organizational defines a strategic asset as one that is rare, knowledge management valuable, imperfectly imitable and non- substitutable. An asset should meet all systems conditions concurrently to qualify as a strategic asset (Peteraf, 1993; Michalisn et al., 1997; Peter Meso and Wernerfelt, 1984). With the advent of Robert Smith knowledge management (KM), intellectual capital is gaining increasing recognition as the only true strategic asset (Hamel, 1998). This The authors has led to a proliferation of organizational Peter Meso and Robert Smith are both Professors in the knowledge management systems (OKMS), for Department of Management and Information Systems, managing intellectual capital. However, Kent State University, Kent, Ohio, USA. according to the resource-based view, tangible assets are not strategic because they can be acquired or imitated. Thus this paper addresses Keywords the question: ``Are OKMS strategic assets Knowledge management, within the context of the resource-based view?'' Knowledge management systems, Explicit knowledge, The answer to this question is pertinent in Tacit knowledge, Competitive advantage, enabling the firm to determine whether it is Organizational learning strategically wise to capture and share its knowledge via an OKMS. Should it be that an Abstract OKMS eliminates the intangibility of tacit With the advent of knowledge management, intellectual knowledge, it may not be strategically wise to capital is gaining increasing recognition as the only true invest the firm's knowledge in an OKMS. strategic asset. This has led to a proliferation of Doing so would render the otherwise strategic organizational knowledge management systems (OKMS), asset non-strategic, easily acquired or for managing intellectual capital. This article addresses replicated by competitors, and hence dilute the question: ``Are OKMS strategic assets within the the sustainable competitive advantage of the context of the resource-based view?'' Two views of OKMS firm. Alternatively, should it be that an emerge ± the technical and the socio-technical view. An OKMS enables a firm to leverage the strategic analysis of OKMS from each perspective is presented and value of its knowledge, it would be advisable their resultant implications on the competitive position of to invest the firm's knowledge in such an the firm explained. The findings indicate that, for a firm to OKMS (Peteraf, 1993; Michalisn et al., 1997; reap long-term strategic benefit from OKMS, it should Wernerfelt, 1984). adapt the broader socio-technical view when developing, The first part of the paper defines strategic implementing and managing its OKMS. This suggests that assets, while the second part reviews KM. firms need to consider not only the technology but also The third part defines OKMS, presenting the the organizational infrastructure, the organizational common views of such systems and analyzing culture and the people who form the OKMS, and the how each view influences the strategic value knowledge that is to be processed by these OKMS. of the OKMS. Electronic access The current issue and full text archive of this journal is Strategic assets available at The resource-based view holds that the http://www.emerald-library.com resources a firm holds can determine the firm's sustainable success in a given market. It specifies that there are two types of assets, strategic and non-strategic. Non-strategic assets do not contribute to the long-term success of the firm. Sustainable competitive Journal of Knowledge Management Volume 4 . Number 3 . 2000 . pp. 224±234 success results only from strategic assets # MCB University Press . ISSN 1367-3270 (Figure 1). Four conditions jointly define the 224
  • 3. View of organizational knowledge management systems Journal of Knowledge Management Peter Meso and Robert Smith Volume 4 . Number 3 . 2000 . 224±234 Figure 1 Relationship of strategic assets to sustainable competitive advantage characteristics of a strategic asset ± valuable, are so ingrained as to be taken for granted. It rare, imperfectly imitable, and non- resides within the individual and is difficult to substitutable. A resource is valuable if it express in words. Every employee has a allows the firm to exploit the opportunities in wealth of tacit knowledge deeply rooted in the market or thwart competitive threats. If it his/her actions, and his/her commitment to ``a is owned by a very small number of all the particular craft or profession, a particular firms in the industry, then it is rare. It is technology, a product market, or the activities imperfectly imitable if it can be sustained for of a work group or team'' (Nonaka, 1991). In long periods of time without competitors most organizations, tacit knowledge is rarely replicating or acquiring it. Finally, it is non- shared or communicated. Therefore, it is substitutable if it has no strategic equivalents. often lost when the individual possessing it Because all tangible assets can either be leaves the organization. Tacit knowledge can imitated or acquired, they are not strategic. also be seen as that knowledge which resides Therefore, a further quality for strategic assets in the culture of the organization (Figure 2). is that they are intangible. The resource-based An example is self-motivated creativity, which view also operates under two assumptions: refers to the will, motivation, and adaptability that ex-ante conditions to competition exist for success exhibited by employees working and that the ex-post conditions to competition within certain corporate cultures. It is difficult can be maintained (Wernerfelt, 1984; to identify the precise cause of care-why. But Michalisn et al., 1997; Peteraf, 1993). literature on KM acknowledges that high levels of care-why significantly enhance the overall performance of the firm (Davenport et Knowledge management al., 1998). Other examples include organizational tacit knowledge, which KM is the process of capturing the collective comprises such knowledge as causal expertise and intelligence in an organization ambiguity ± the inexplicable chemistry of and using them to foster innovation through resources that provides sustainable continued organizational learning (Nonaka, competitive advantage to a firm (Michalisn et 1991; Quinn et al., 1996; Davenport et al., al., 1997), and cultural tacit, which is the 1998). According to Nonaka, two types of inexplicable knowledge resident in the knowledge reside in any organization ± tacit corporate culture (Michalisn et al., 1997). and explicit knowledge. Tacit knowledge Explicit knowledge is knowledge that can be consists of mental models, beliefs and codified. Because it is easily shared and persuasions of each individual employee that communicated, most organizations have 225
  • 4. View of organizational knowledge management systems Journal of Knowledge Management Peter Meso and Robert Smith Volume 4 . Number 3 . 2000 . 224±234 Figure 2 The knowledge matrix captured this knowledge in ordered organizational learning. Therefore, KM can repositories, systems, or operating be viewed as the creation of sustainable technologies of the firm, thus making it competitive advantage through continued available to all the members of the organizational learning (Figure 3). Since the organizations. There are three types of ``value of the intellect increases markedly as explicit knowledge resident in any one moves up the intellectual scale from organization ± cognitive knowledge, advanced cognitive knowledge through advanced skills systems skills, and systems understanding and systems thinking to self-motivated (Figure 2). Cognitive knowledge, also termed creativity'', enhancing intellectual capital ``know-what'', is the ``basic mastery of a within the firm assures the sustainable discipline that professionals achieve through competitive advantage of the firm (Nonaka, extensive training and certification'' (Quinn et 1991; Quinn et al., 1996; Hamel, 1998). al., 1996). Advanced skills or ``know-how'' The major goal of KM is to enhance refer to the ``ability to apply rules of a innovation. In a bid to achieve this goal and to discipline to complex real-world problems'' maximize the benefits that can be derived from (Quinn et al., 1996). Systems understanding, effective KM, many firms are investing heavily also termed ``know-why'' is the deep in the development of OKMS aimed at understanding of the web of cause-and-effect supporting knowledge work and enhancing relationships underlying a discipline (Quinn et organizational learning (Davenport et al., 1998). al., 1996; Nonaka, 1991). However, there are differences in what firms Organizational learning is the process of perceive an OKMS to be. Such differences have continued innovation through the creation of resulted in two common perceptions of OKMS: new knowledge (Quinn et al., 1996; Nonaka, the technical perception; and the socio-technical 1991). It is an ongoing process that takes perception. Each perception is examined in the place as employees engage in knowledge work next section. The implications of each (Davenport et al., 1998). Nonaka (1991) perception on the approaches used to develop states that organizational learning emanates OKMS, and the resultant impact on the from the iterative process of articulation and sustainable competitive positions of the firms are internalization. Articulation occurs when an also examined. employee's tacit knowledge is captured as explicit knowledge and internalization occurs when this captured explicit knowledge is then Organizational knowledge management transformed into another employee's tacit systems knowledge. Therefore, organizational learning occurs at the intersection of tacit and From the perspective of knowledge work, an explicit knowledge during the interaction of OKMS is a system that provides for the the various employees, departments or teams creation of new knowledge, the assembly of in a firm (Nonaka, 1991). externally created knowledge, the use of Sustainable competitive advantage results existing knowledge, and the finding of from innovation. Innovation in turn results knowledge from internal and external sources. from the creation of new knowledge. New Nonaka's spiral of knowledge creation leads knowledge is created in the process of to the definition of an OKMS as that which 226
  • 5. View of organizational knowledge management systems Journal of Knowledge Management Peter Meso and Robert Smith Volume 4 . Number 3 . 2000 . 224±234 Figure 3 How knowledge relates to organizational learning and sustainable competitive advantage supports organizational learning by enhancing geographically dispersed professionals. the exchange and sharing of tacit and explicit Examples of group-ware software products knowledge (Figure 3). Taking Quinn et al.'s being marketed as OKMS are Lotus Notes, (1996) definition of intellectual capital, an Network Delivery Knowledge, and Fulcrum OKMS can be seen as that which organizes a Knowledge Network. Lotus Notes is the most firm's know-what, know-how, and know-why widely used. Lotus Notes is a document into explicit knowledge resident in the firm's database that enables the communication databases and operating technologies between colleagues, the collaboration among (Nonaka, 1991; Quinn et al., 1996; teams, and the co-ordination of strategic Davenport et al., 1998; Sviokla, 1996). The business processes within an organization. It advent of KM has resulted in two can contain both structured and unstructured predominant perspectives of what constitutes content, thereby surpassing limitations that an OKMS ± the technical perspective and the relational databases impose on the socio-technical perspective. Following are organization. Notes uses replication descriptions and analyses of each. technology to allow users in diverse locations to access the same knowledge. It supports The technical perspective e-mail, pull and push technologies, and work This perspective holds that an OKMS is an flow automation. The software also provides advanced assembly of software, and its up to four levels of security: authentication, associated hardware infrastructure, for access control, field-level privacy, and digital supporting knowledge work and/or signatures (IBM, 1998; Kurchak Associates, organizational learning through the free 1998; Fulcrum, 1998; Hibbard, 1997). access to and increased sharing of knowledge Group-ware technologies, including Lotus (Figure 4). The technology-centered OKMS Notes are developed by independent software in use today are employing one technology or houses and sold to any willing buyer. a combination of ten key technologies: group- Therefore, they are easily acquired. The ware, messaging, Web browsers, document security features found in any group-ware management, search and retrieval, data system do not prevent the imitability of the mining, visualization, push technology, group knowledge resident in the system. Lotus decision support, and intelligent agents. Of Notes, for example, employs RSA public key these group-ware and Web browser encryption technology ± the de facto industry technologies are the most prominent standard ± to secure the knowledge resident in (Hibbard, 1997; Chaffey, 1998). its knowledge bases (IBM, 1998). However, Group-ware software packages are because this security standard is also used by advanced decision support systems developed other organizations in the industry, it is not to enhance collaborative group work, between proprietary. Mechanisms employed by 227
  • 6. View of organizational knowledge management systems Journal of Knowledge Management Peter Meso and Robert Smith Volume 4 . Number 3 . 2000 . 224±234 Figure 4 The technical perspective of a knowledge management system corporate intelligence agents, industrial commitment to the system. Finally, Web espionage experts, and computer hackers may technologies adapt the natural way of enable unauthorized users to circumvent the communication between individuals. They security controls and access strategic surpass organizational hierarchies, formal corporate knowledge (Crock et al., 1996) communication policies, physical barriers, resident in the group-ware's knowledge bases. and social groupings to make available to Therefore, when viewed solely from a everyone knowledge articulated by any other technological perspective, group-ware professional. However, these technologies do technologies do not satisfy the requirements not provide for the development of well- of a strategic asset. The strategic value of structured KM systems. Web-based KM group-ware does not result from the quality of systems are thus difficult to manage, maintain technology used to develop these systems. and evaluate. Such systems do not allow the Web-based technologies entail employing a organization to keep an accurate inventory of Web browser to access knowledge resources the intellectual capital it possesses and what on the Internet or on intranets that link the true value of these assets is (Hibbard, geographically dispersed professionals. These 1997; IBM, 1998; Musciano and Kennedy, technologies are popular with most 1996). organizations for several reasons. First, they From a resource-based view, Web allow for the in-house development of KM systems, hence building some proprietary technologies may provide limited strategic characteristics into the system. Second, they advantages. For example, Web browsers are allow for the development of a naturally not rare ± they are easily acquired. The Web expanding, flexible and easy to use KM pages developed by these browsers are easily system. This encourages employees to take imitated. Further, Web-based systems have advantage of the system. Third, because it is substitutes in group-ware, messaging, very simple to develop Web pages, the document management, push technologies, employees themselves do most of the intelligent agents, search and retrieval, and development of the OKMS. This not only data mining technologies. The strategic value minimizes the cost of developing the OKMS, of Web-based KM systems is thus greatly it also enhances employee participation and diluted. Therefore, taken on their own, 228
  • 7. View of organizational knowledge management systems Journal of Knowledge Management Peter Meso and Robert Smith Volume 4 . Number 3 . 2000 . 224±234 Web-based technologies do not constitute knowledge management can be viewed as a strategic assets. socio-technical system of tacit and explicit business policies and practices. These are enabled by the strategic integration of Socio-technical perspective information technology tools, business The socio-technical perspective recognizes processes, and intellectual, human, and social that there is more to OKMS than mere capital. technology. Under this perspective, OKMS are seen as being complex combinations of Technology infrastructure comprises the technology infrastructure, organizational hardware, software, middle-ware and infrastructure, corporate culture, knowledge, protocols that allow for the encoding and and people (Figure 5). Carayanis (1998) electronic exchange of knowledge. Three concurs with this by stating that: types of technology infrastructure are found While information technology can be considered in an OKMS: knowledge oriented as a value-adding technological infrastructure, technologies, function oriented technologies, Figure 5 Organizational knowledge infrastructure and its relation to sustainable competitive advantage 229
  • 8. View of organizational knowledge management systems Journal of Knowledge Management Peter Meso and Robert Smith Volume 4 . Number 3 . 2000 . 224±234 and specialty oriented technologies. engineers are able to gain insightful Knowledge oriented technologies such as knowledge about the customers, customer group-ware and Web browsers directly needs, trends in consumer tastes and the process knowledge work and the sharing of evolution in consumer behavior that allows knowledge within the organization. Function them to remain in front of the innovation oriented technologies such as office curve. Thus by effectively harnessing the automation, robotics and desk-top computing capabilities provided by information technologies support operational level technologies, Ford is attempting to create a activities such as data processing, production, sustainable competitive advantage in the auto and service delivery while collecting the data industry (Kerwin, 2000). that eventually get refined into information Organizational infrastructure refers to the set and further into knowledge for use in of roles and organizational teams whose organizational learning. Specialty oriented members have skills to serve as resources for technologies support highly specialized individual projects. The way these roles relate to functions within the firm. Usually these are each other within the context of the those functions that require high levels of organization's structure defines the know-how. Examples of these technologies organizational infrastructure. The organizational include computer-aided design and infrastructure defines the organization's manufacture (CAD/CAM) software, and management style and philosophy. It expert systems software (Davenport et al., determines how the employees of the firm are 1998; Hibbard, 1997). organized into formal and informal teams of All the technology infrastructure used in departments; how these teams interact formally OKMS (including software) is tangible. and informally; and the role and goals of each Because this technology infrastructure is team and how these relate to the overall largely software-dependent, it is easily corporate strategy (Davenport et al., 1998). replicated, copied, pirated, reverse- Organizational infrastructure is intangible. engineered or cloned, even when protected by No two organizational infrastructures are regulatory assets such as copyrights, patents alike. Well-developed organizational and licenses. The hardware infrastructure infrastructure can be a source of sustainable found in OKMS is largely standard and thus competitive advantage. This advantage is not easily imitated. Therefore, the technology derived from the organization's hierarchy. component of the OKMS is not a strategic Rather it is derived from the dynamic asset (Michalisn et al., 1997; Wernerfelt, interaction of the teams and individuals that 1984; Long, 1994). make up the hierarchy. Though it may be easy The Ford Motor Company is a clear to replicate or imitate the organization's example of a firm that is re-inventing its hierarchy, it is extremely difficult to replicate corporate architecture by investing heavily in the precise nature of interaction between the technologies for KM systems. It is using KM roles and the teams in the hierarchy. The systems to redefine the auto manufacturing more advanced the organizational industry, gain a competitive stronghold in infrastructure, the greater the economic rents emergent electronic markets, and get closer to it will generate for the organization. its customers. The firm has established the Therefore, organizational infrastructure is a autoxchange mart ± an information strategic asset (Davenport et al., 1998; technology-intensive KM and electronic Michalisn et al., 1997). commerce system intended to shift the car- Federal Express (FedEx) is an example of a manufacturing model from the conventional firm that has built an information-technology ``push'' business model to the emergent intensive global organizational infrastructure ``pull'' model. In the ``pull'' model, the that meets the criteria of a strategic asset. The consumer determines the precise organizational infrastructure effectively configuration of the car before it is connects the internal and external manufactured. Thus, consumers get highly stakeholders at FedEx to each other in an customized products while the firm saves online, real-time mode. In this way it allows substantial amounts of capital that would FedEx to dynamically exchange knowledge otherwise be tied up in large inventories of with its customers, vendors, suppliers and finished products. Further, auto designers, trade partners while effectively transacting the financiers, marketers, and production firm's core business functions. Further, all 230
  • 9. View of organizational knowledge management systems Journal of Knowledge Management Peter Meso and Robert Smith Volume 4 . Number 3 . 2000 . 224±234 employees at the firm have instantaneous organization's databases, systems, and access to the knowledge resources resident in operating technologies. In so doing, they its technologies, databases and operating make personal knowledge available for procedures. Employees can easily interact corporate use. Further, they tap into the across time zones, political borders, business corporate pool of explicit knowledge, divisions, and organizational hierarchy levels internalizing it into personal tacit knowledge in a real-time online mode, thereby that they then use to generate new knowledge. facilitating instantaneous exchange of This new knowledge is then articulated back knowledge. While it may be possible to into the corporate databases, systems and imitate the technological infrastructure at operating technologies, further expanding the FedEx, it is extremely difficult to replicate an corporation's intellectual assets (Quinn et al., organizational structure equivalent to 1996; Nonaka, 1991; Davenport et al., 1998; FedEx's in complexity, behavior, and Sviokla, 1996; Michalisn et al., 1997). productivity. A case in point is United Parcel As individuals, employees do not meet the Service (UPS) and Document Handling requirements for a strategic asset. They easily Services (DHL) which have OKMS that are transfer from one organization to the next. almost as elaborate, global and extensive as Their productivity depends on a complex that at FedEx, yet enjoy significantly smaller combination of factors: motivation, reward, market share both globally and domestically skill levels, experience, health and even when compared to FedEx (Rao et al., 1999). emotional factors. However, as teams or units General Electric is yet another firm that has of workers, employees satisfy the conditions developed a ``social architecture'' that enables of a strategic asset. The teams formed by the it to keep ahead of its competitors in almost employees, and the synergies emanating from all the markets it serves. The organizational these teams, result in organizational learning. infrastructure at General Electric has Organizational learning is a strategic asset. facilitated the maturing of this social Since it is the collaboration between architecture by allowing a seamless flow of employees that enables the process of knowledge across all employees regardless of organizational learning, the collection of their position, authority, or geographical employees ± human resources in total ± is a postings. Hence, suggestions from anyone in strategic asset. Said another way, because the the firm are quickly assessed through a employees are the custodians and developers specific process called ``Work out'' (Layne, of intellectual capital, when they work 2000). While it may be easy to replicate together or collaborate, they constitute a General Electric's organizational hierarchy, strategic asset (Michalisn et al., 1997; Grant, the fabric that holds its organizational 1998; McNearney, 1996; Spitzer, 1996; infrastructure together, thereby facilitating a Nonaka, 1991; Quinn et al., 1996). productive ``social architecture'' and highly Leading consulting firms have continued to effective knowledge sharing processes such as maintain a lead in investing in their employees ``work out'', is extremely difficult to replicate, as a core element of their strategic competitive imitate or even substitute. In that sense it is advantage. Strategy consulting firms such as also valuable and rare. Bain, Boston Consulting Group and The core of the OKMS is the people. This McKinsey have developed elaborate component includes all the organization's information-technology enabled KM systems stakeholders ± employees, owners, customers, that accentuate dialogue between individuals suppliers and regulators/legislators. However, rather than knowledge objects in a database. employees are the most significant They make effective use of communities of participants. Employees are the key source of practice, brainstorming sessions, one-on-one the intellectual capital acquired and managed conversations, apprenticeship, and computer- by the OKMS. Intellectual capital is an supported collaboration and group work intangible asset. It is also rare, valuable, non- technologies to keep their employees actively substitutable and difficult to imitate. engaged in perpetual organizational learning Therefore, intellectual capital is a strategic (Hansen et al., 1999). asset. Further the employees propel the Microsoft is another example of a firm that organizational learning process. They has developed a successful KM system using articulate personal tacit knowledge into the the socio-technical approach. It has, over the explicit knowledge resident in the past decade, quietly assembled over 245 of 231
  • 10. View of organizational knowledge management systems Journal of Knowledge Management Peter Meso and Robert Smith Volume 4 . Number 3 . 2000 . 224±234 the brightest researchers from around the always charge the lowest fare ± but they globe and provided them with resources to cannot copy its culture. Indeed, Southwest conduct leading-edge research and Airlines has ranked among the top ten development of future software products. The corporations best to work for in the USA over organizational infrastructure that Microsoft the past few years. It has also remained a has established to support its researchers and dominant player in the very competitive product developers facilitates a rich exchange airline industry. Its culture allows its of knowledge across disciplines hitherto employees to acquire knowledge quickly both considered remotely related. Yet Microsoft from its clients and from fellow employees. It has been able to tap the ensuing knowledge allows employees to use the knowledge into its products, hence expanding its market instantaneously as they make decisions, and share very rapidly while remaining well at the encourages employees to disseminate their forefront of innovation in the software knowledge to colleagues. Its culture rewards industry. Like General Electric it has been learning and the development of others. As able to expand its product offerings, such Southwest's employees are able to reshaping itself successfully as the business provide very high levels of customer environment evolved from the standalone satisfaction, thus generating the repeat Personal Computer, to the Client-Server business that keeps it competitive (Colvin, Architecture and more recently to the 1997). Internet and Electronic Commerce business Knowledge may be tangible or intangible in models. While technology is an integral part nature. Know-what, know-how, and know- of its KM system, people are even more why, when articulated into the organization's important. So are the culture and the database and operating technologies, are organizational infrastructure that cement the tangible. Similarly, explicit knowledge is interactions of its people and technology tangible because it has been encoded into components, hence generating the knowledge documents, databases, or some other that keeps Microsoft competitive (Stross, permanent medium. Explicit knowledge 1997; Kurtzman, 1998). exhibits strategic characteristics only when it Culture refers to the shared beliefs, norms, is proprietary. For this type of knowledge to ethics and practices within an organization. A remain proprietary, it has to be protected knowledge friendly culture is one in which the from other parties. Such protection is employees highly value learning and exhibit a achieved through legal assets such as patents positive orientation to knowledge. It is one in or copyrights, or through security features which experience, expertise and rapid such as access controls and encryption. When innovation are held to be more important explicit knowledge is captured on electronic than hierarchy. Such a culture deeply media it becomes increasingly vulnerable to embraces knowledge and the opportunities piracy regardless of the types of protection that come with learning. A knowledge being used to protect it. Piracy dilutes the unfriendly culture, on the other hand, is one strategic value of knowledge. Therefore, that neither values nor rewards knowledge. articulating knowledge makes it easier to Culture is intangible. It is unique to each acquire and/or imitate that knowledge, hence organization. A knowledge friendly culture diluting its strategic properties (Quinn et al., cannot be replicated, imitated, acquired or 1996; Michalisn et al., 1997; IBM, 1998; substituted. It develops within the Crock et al., 1996). organization, and remains unique to that Tacit knowledge, on the other hand, is organization. Therefore, a knowledge friendly intangible. However, it only becomes strategic culture is a strategic asset. when used to advance the objectives of the Southwest Airlines is an example of a firm firm. When this knowledge is not used in the that has developed a world-acclaimed positive interest of the firm, it does not contribute any corporate culture that has contributed value to the firm. Because tacit knowledge significantly to its corporate success. In the resides in an individual, its benefits are not words of Southwest Airline's founder, Herb long-term. It is lost when the individual leaves Keller, Southwest's competitors can do the organization. Therefore, tacit knowledge, everything it does ± fly one type of aircraft, though rare, non-substitutable, inimitable, serve no meals, transfer no luggage, give no and valuable (when used to advance assigned seats, fly mostly short hauls, and corporate goals), does not satisfy the ex-post 232
  • 11. View of organizational knowledge management systems Journal of Knowledge Management Peter Meso and Robert Smith Volume 4 . Number 3 . 2000 . 224±234 conditions of a strategic asset. Further, by articulating this asset and thus making it because tacit knowledge can be captured as readily available to competitors. explicit knowledge through the process of articulation, it becomes possible to acquire. These two observations limit the strategic References value of tacit knowledge (Michalisn et al., 1997; Peteraf, 1993; Wernerfelt, 1984). Carayanis (1998), ``The strategic management of Care-why, the knowledge that resides in the technological learning in project/program culture of a firm, is also intangible. Unlike management: the role of extranets, intranets and intelligent agents in knowledge generation, tacit knowledge it cannot be articulated into diffusion, and leveraging'', Technovation, Vol. 18 explicit knowledge. However, care-why is No. 11, pp. 697-703. largely related to the culture of the Chaffey, D. (1998), Groupware, Workflow and Intranets: organization. It has strategic value only when Reengineering the Enterprise with Collaborative the culture of the organization is knowledge Software, Digital Press, Boston, MA. friendly. This is because such cultures foster Colvin, G. (1997), ``The changing art of becoming the development of care-why. A culture that is unbeatable'', Fortune, 24 November, pp. 299-300. Crock, S., Smith, G., Weber, J., Melcher, R.A. and not knowledge friendly stigmatizes care-why, Himelstein, L. (1996), ``They snoop to conquer'', thereby incapacitating organizational learning Business Week, 28 October, pp. 172-6. and the resultant benefits. Therefore, the Davenport, T.H., De Long, D.W. and Beers, M.C. (1998), strategic value of care-why is tied to the ``Successful knowledge management projects'', strategic value of the organization's culture Sloan Management Review, Winter, pp. 43-57. (Quinn et al., 1996; Michalisn et al., 1997; Fulcrum (1998), Fulcrum Knowledge Network, http:// Davenport at al., 1998). www.fulcrum.com/english/products/fknhome.htm, On the whole the socio-technical 9 April, p. 1. Grant, L. (1998), ``Happy workers ± high returns'', Fortune, perspective enables a firm to reap sustainable 12 January, p. 81. competitive advantages from its OKMS Hamel, G. (1998), Strategic Flexibility: Managing in a (Figure 5). The organization that develops its Turbulent Economy, Wiley, Chichester, UK. OKMS, so that the intangible components Hansen, M., Hansen, N. and Tierney, T. (1999), ``What's are strategically and appropriately your strategy for managing knowledge?'', Harvard synchronized with a well-developed Business Review, March, pp. 106-16. Hibbard, J. (1997), ``Knowing what we know'', technology infrastructure, acquires a system Informationweek, 20 October, pp. 46-64. that is rare, difficult to imitate, valuable and IBM (International Business Machines) (1998), ``Lotus non-substitutable. Such a system is strategic notes: an overview'', http://www.lotus.com/core/ and will accord the firm the sustainable content.htm, 25 April, pp. 1-12. strategic advantages it needs to leverage its Kerwin, K. (2000), ``At Ford, e-commerce is job 1'', competition. Business Week, 28 February, pp. 74-8. Kurchak Associates (1998), ``Network delivery knowledge'', http://www.coursewaresource.com/ kurchak/, 9 April, p. 1. Conclusion Kurtzman, J. (1998), ``An interview with Brian Arthur'', Strategy and Business, 2nd quarter, pp. 95-103. In order to leverage its strategic competitive Layne, R. (2000), ``GE chief outlines strategies for future'', position, a firm needs to adopt the socio- The Beacon Journal, 26 February. technical perspective when developing its Long, L. (1994), Introduction to Computers and OKMS. In so doing it addresses all the Information Processing, 4th ed., Prentice-Hall Inc., Upper Saddle River. components pertinent to the implementation McNearney, D.J. (1996), ``Employee motivation: of the OKMS as a strategic system by giving creating a motivated workforce'', HR Focus, August, appropriate focus to those components that pp. 1-6. generate sustainable competitive advantage. Michalisn, M., Smith, R. and Kline, D. (1997), ``In search of OKMS that simply exploit the tangible strategic assets'', revised and submitted to the aspects of knowledge do not leverage the International Journal of Organizational Analysis, firm's sustainable competitive advantage. On August, pp. 1-39. Musciano, C. and Kennedy, B. (1996), HTML: the contrary, they dilute the sustainable The Definitive Guide, O'Really & Associates, competitive position of the firm. Therefore Bonn. organizations that adapt this approach risk Nonaka, I. (1991), ``The knowledge creating company'', losing their true source of sustainable Harvard Business Review, November-December, competitive advantage ± intellectual capital ± pp. 96-104. 233
  • 12. View of organizational knowledge management systems Journal of Knowledge Management Peter Meso and Robert Smith Volume 4 . Number 3 . 2000 . 224±234 Peteraf, M.A. (1993), ``The cornerstones of competitive Stross, R. (1997), ``Mr Gates builds his brain trust'', advantage: a resource-based view'', Strategic Fortune, 8 December, pp. 84-98. Management Journal, Vol. 14, pp. 179-91. Sviokla, J.J. (1996), ``Knowledge workers and radically Quinn, J.B., Anderson, P. and Finkelstein, S. (1996), new technologies'', Sloan Management Review, ``Managing professional intellect: making the most Summer, pp. 25-40. of the best'', Harvard Business Review, March-April, Wernerfelt, B. (1984), ``A resource-based view of the pp. 71-80. firm'', Strategic Management Journal, Vol. 5, Rao, B., Navoth, Z. and Horwitch, M. (1999), ``Building a pp. 171-80. world class logistics, distribution and electronic William, M.L. and MacDermid, S.M. (1994), ``Linkages commerce infrastructure'', Electronic Markets, Vol. 9 between employee benefits and attitudinal and No. 3, pp. 174-80. behavioral outcomes: a research review and Spitzer, D.R. (1996), ``Rewards that really motivate'', agenda'', Human Resources Management Review, Management Review, May, pp. 45-50. Vol. 4 No. 2, pp. 131-60. 234