Formulating A Knowledge Management Strategy Essay

Throughout the universe the value of cognition for the modern endeavor is progressively being recognised, and more and more endeavors are explicitly trying to pull off this of import plus. To be successful in the direction of cognition as an plus, it is of cardinal importance to recognize that cognition assets, merely as any other plus of the endeavor, should be managed in the context of the overall concern. The focal point is hence non on cognition per Se, but instead on pull offing the concern to include a cognition position. This is achieved by recognizing that cognition is a valuable plus that should be managed explicitly in an endeavor.

As every concern has to run in an progressively competitory and dynamic environment, concern directors should establish all determinations on their competitory standing in the universe economic system and the fight of their cognition competences. The ability of a company to call up and work its intangible and unseeable assets has become far more of import than puting and pull offing physical, touchable assets. All employees must lend value by what they know and by the information and cognition they can supply. Investing in, managing, and working the cognition of employees is of the kernel in the success of companies in the cognition economic system.Knowledge endeavors have been characterised as endeavors in which the key plus is knowledge. Their competitory advantage comes from holding and efficaciously utilizing cognition. Knowledge direction is still in its early phases and there are many positions of what precisely knowledge direction entails.

Judging by the high rate of cognition direction undertaking failures, this presents a important challenge in companies where cognition direction is being implemented.The cognition direction procedure ensures that the endeavor ‘s cognition procedures are performed as efficaciously and expeditiously as possible. It is hence responsible for placing these cognition procedures and implementing steps that will ease their effectual and efficient executing.

Knowledge processes associated with both tacit and expressed cognition have to be managed. This means that cognition direction in the endeavor must turn to non merely chiseled procedures such as those supported by information engineering, but besides the cognition processes taking topographic point in and between persons, such as cognition sharing and cognition creative activity.In this chapter, the direction of cognition for competitory advantage in a life-insurance company, whose nucleus merchandise is knowledge itself, is discussed. It examines how knowledge direction affects the competitory nature of the endeavor and how the endeavor can utilize knowledge direction to construct long-run competitory advantages. Traditionally many companies have taken an ad hoc attack to pull offing cognition, ensuing in work duplicate, inconsistent work patterns and loss of of import organizational cognition when employees retire or leave the company10.

The chapter presents a systematic attack that can be followed in order to better the concern value of the knowledge assets of an endeavor.


Knowledge direction is the procedure of identifying, organizing and pull offing cognition resources, including information, larning capacity and other resources. Bateman and Snell3 specify cognition direction as patterns to detect and tackle the rational resources of an endeavor embodied by the persons employed by the endeavor.

The purpose of such a cognition direction definition is to happen, unlock, portion and capitalise on the expertness and accomplishments of employees. The originative and advanced usage of cognition workers is besides emphasised by BRINT.com4 through the definition of cognition direction as a set of organizational procedures that strive to accomplish synergism between information systems and the nature of workers to introduce.

The synergism between systems and persons requires knowledge direction to be a agency of making an environment rich in cognition in order to supply knowledge-sharing interactions2. Knowledge resides in the heads of people and therefore cognition direction is the pattern of back uping persons to portion and use the cognition they have. An person ‘s cognition is of no value to anyone else if it is non shared or turned into some sort of merchandise or service. Gilchrist expands on the impression of synergism, specifying cognition direction as “ the end-to-end uninterrupted procedure that describes the systematic creative activity, acquisition, integrating, distribution, application and archiving of cognition to drive behaviour ( sic ) and actions which support organisational aims and mission achievement ” . Knowledge direction is therefore seen as a procedure or scheme to pull off cognition in endeavors.


The inquiry may be posed why cognition direction and its part to the competitory place of endeavors are regarded as of import. There are a figure of grounds that jointly reflect the province of contemporary cognition direction and the importance thereof, viz. :Knowledge has become a primary factor of production back uping the traditional factors of labor, land and capital.The bringing of services has become a major value driver.Knowledge is a networked activity and therefore utilises the attempts of many and is besides able to capitalize on the collaborative attempt of the participants.

The digitization of cognition has enhanced its distribution, storage and transportation.Knowledge has the ability to get by with a dynamic environment and encapsulate invention and engineering in helping it in the procedure.Knowledge direction ‘s overall intent is to maximize the endeavor ‘s knowledge-related effectivity and regenerate cognition invariably to procure sustained viability and profitableness. In endeavors that appreciate the importance of cognition direction, the organizational duties of staff are non focused on the narrow confines of traditional occupation descriptions. The purpose of cognition direction is for endeavors to go more competitory through the capacities of their people to be more flexible and advanced and to supply the endeavor with the ability to place, gaining control and leverage the internal cognition of individuals10. This internal cognition should be combined with the cognition from a assortment of external beginnings in order to heighten the ability of all employees, to make and portion cognition across the endeavor, to supply first-class client services and to vie in an progressively aggressive environment.Enterprises that understand – or at least where their senior direction understands – the importance of cognition direction have the features of larning endeavors that manage cognition for concern success. To develop a learning civilization requires the support of senior direction and particularly the main executive officer.

Knowledge direction can merely be successful if the corporate civilization facilitates and encourages the sharing of thoughts and cognition. It is critical to hold a civilization of cognition sharing. In such a civilization, free-flowing conversation, unfastened duologue across organizational boundaries, team- and network-building are of import mechanisms for making high degrees of invention and acquisition. Knowledge should non be managed in an stray mode. It should be integrated into the other direction activities in the endeavor and linked to the concern scheme.

Business scheme and KNOWLEDGE MANAGEMENT

It is frequently said that scheme can be viewed as that which the endeavor must stand out at to guarantee its endurance in a competitory environment. The associating between cognition direction and scheme is viewed by many as the Southern Cross for successful direction in any endeavor. Thus Nonaka and Takeuchi19 province that “ The most important component of corporate scheme is to gestate a vision about what sort of cognition should be developed and to operationalize it into a direction system for execution ” . This is so farther synthesised to the degree of “ organisational purpose ” , harmonizing to Nonaka & A ; Takeuchi19, using the purpose as a norm for measuring the value of cognition in footings of the endeavor ‘s demands.

The function of cognition direction in the scheme preparation procedure appears to hold evolved over clip to its present position instead than being the consequence of a direct and witting attempt by direction to incorporate it as a functional input into the process23. A similar position is that of Zack27, who reflects that during his research among 25 houses the most of import component for steering cognition direction in the endeavor is its strategic orientation, planning and preparation. He postulates that an endeavor ‘s scheme aids in placing the cognition direction issues which assist and support the endeavor ‘s competitory place and therefore stockholder value. Yet, harmonizing to Zack27, this nexus between cognition direction and scheme is widely ignored in pattern. This in itself plays a major function in the credence of the function of cognition direction at strategic degree by senior direction.Davenport and Prusak8 province that for most cognition endeavors it is of critical importance to set up a nexus between cognition direction and the concern scheme.

They propose two attacks to this demand:Make cognition the merchandise of the endeavor by redefining bing merchandises and services on the footing of knowledge assets or augmenting their application with cognition, and/orImplement a concern scheme with an integrated cognition direction programme guaranting that the key concern drivers are supported.Davenport and Prusak8 do, nevertheless, express their concern that while the linking of scheme and cognition direction is critical, concern in general has non truly achieved this. The endeavors that implement this attack are those that are in the concern of selling cognition, e.g.

confer withing houses, package developers and similar projects. In other concern sectors there is a famine of illustrations – they do admit that there are knowledge direction enterprises that do convey about a step of efficiencies, but the existent long term sustainable quantum betterment consequences have merely non been achieved yet.It needs to be accepted that the senior direction of an endeavor exerts broad influence on its strategic behavior and therefore the public presentation of the enterprise15. This influence is exerted via senior direction ‘s position of the endeavor environment and their perceptual experience of the capacities and capablenesss of the endeavor.

Before explicating a cognition direction scheme, it is of import to set up the importance of cognition direction in the overall aim of the endeavor. One should set up how strongly it features in the endeavor ‘s mission statement and concern plan18.Depending on the result of the analysis of the endeavor ‘s current place with respect to knowledge direction orientation, a scheme should be formulated to turn to chances and menaces.

The cognition direction scheme consequences from the cognition worker ‘s consciousness of, and responses to, tendencies in the market place. The cognition direction scheme is basically a matrix that depicts knowledge direction as a set of procedures, which are defined through the application of the direction maps to each of the organizational cognition procedures. In add-on to specifying a complete set of cognition direction processes, the scheme besides addresses the nexus between cognition direction pattern and concern scheme.

study on KNOWLEDGE MANAGEMENT activities at A life-insurance company

The intent of the empirical study was to look into the current state of affairs with respect to knowledge direction activities in a life-insurance company in South Africa and to find the relationship between the cognition direction activities and the concern scheme of the endeavor. A instance survey of the company was conducted to find the extent to which the endeavor utilises knowledge direction patterns, peculiarly cognition sharing and coaction.


Harmonizing to Eisenhardt a instance survey is “ a research scheme which focuses on understanding the kineticss present within individual scenes ”.

A instance survey methodological analysis is usually adopted when a holistic and an in-depth probe is needed. Leonard-Baron in Voss, Tsikriktis and Frohlich see a instance survey as “ a history of a past or current phenomenon, drawn from multiple beginnings of grounds. It can include informations from direct observation and systematic interviewing every bit good as from public and private archives. In fact, any fact relevant to the watercourse of events depicting the phenomenon is a possible data point in a instance survey, since context is of import. ”Data analysis in a instance survey consists of analyzing, categorizing, tabling, or otherwise recombining the grounds to turn to the initial propositions of a study. The study methodological analysis consisted of questionnaires, which were distributed to the sample group. The questionnaire was divided into four subdivisions. Section A focused on biographical informations and Sections B, C and D on applications of cognition direction and cognition sharing in the endeavor.

A sample of 847 employees was indiscriminately drawn by computing machine from the endeavor ‘s employee database. The questionnaire was developed in a Uniform Resource Locator ( URL ) format by the Statistical Consultation Services ( Statcon ) at the University of Johannesburg. The questionnaire was distributed via electronic mail, including the URL nexus, and accompanied by a covering missive to the 847 employees.The respondents had to subject the completed questionnaire straight via the URL nexus to Statcon for statistical analysis of the information. The informations were put into spreadsheets, with statistical graphs for a ocular representation of the consequences. Of the sample of 847 employees, 346 respondents ( 40.85 % ) returned completed questionnaires. The information from the questionnaires were processed by Statcon, which used the Statistical Package for Social Sciences package for the input, direction and statistical analysis of the informations that were collected.

These were so put into spreadsheets with statistical artworks for a ocular presentation of the consequences.


Biographical informationsThe bulk of respondents ( 39.4 % ) are older than 30 old ages and younger than 39 old ages. More than 50 % of the employees have been employed at the endeavor for more than five old ages. Most respondents ( 46.3 % ) keep a grade and 27.2 % of the respondents are in ownership of a post-graduate grade, whereas merely 22.3 % of the respondents ‘ highest making is a post-matriculation 1.

The above consequences back up the findings of Wagner25 and Stewart22 that employees in the cognition economic system should be extremely qualified. With respect to occupation degrees employed, 3.5 % of the respondents are in the top construction of the endeavor, whereas 13 % are on senior direction degree, 26.5 % on in-between direction degree, 15.9 % on junior direction degree and 41 % in administrative places.

Specifying cognition directionSince cognition direction is a reasonably new construct in the endeavor, respondents were asked whether they agree with two cognition direction definitions sing their present work state of affairs ( see Table 1 ) .


Strongly differ




Strongly hold


Knowledge direction encompasses all activities required to profit from the endeavor ‘s cognition assets in support of the endeavor ‘s concern and operations.1.6 % ( 5 )3.

1 % ( 10 )27.7 % ( 88 )52.2 % ( 166 )15.4 % ( 49 )100.0 % ( 318 )Knowledge direction is conveying the right cognition, in the right measure, to the right topographic point at the right clip.0.

9 % ( 3 )5.9 % ( 19 )21.1 % ( 68 )48.

4 % ( 156 )23.6 % ( 76 )100.0 % ( 322 )

Table 1: Specifying cognition direction

Harmonizing to Table 1, respondents understood the importance of cognition direction to the concern and believed that the managing of cognition is really of import to the success of the endeavor.

Harmonizing to Call6 dissension on what cognition direction entails leads to unsuccessful cognition direction undertakings and Ndlela and Du Toit18 emphasise that people are the key to the execution of a cognition direction scheme. From a cognition direction scheme initiative the overall high credence of the two definitions should ease the procedure of developing and set uping such a scheme in the endeavor. Particular notice should be taken of respondents ‘ positive attitude to the possible applications of cognition direction in the company.

Knowledge civilizationTop direction can keep an organizational civilization in order to assist ease cognition transportation in an endeavor and respondents were asked whether they are encouraged to portion cognition, to implement their ain thoughts and whether they are unfastened to alter ( see Table 2 ) . Singh20 found that certain leading manners had a important relationship to the cognition direction of an endeavor. Bryant5 and Crawford7 besides stated there was an evident relationship between transformational leading and cognition direction.

Not at all

Very small


Great extent

Very great extent


There is an organizational civilization which encourages the sharing of cognition1.9 % ( 6 )15.3 % ( 47 )20.

5 % ( 63 )51.9 % ( 160 )10.4 % ( 32 )100.0 % ( 308 )I am encouraged to implement my ain thoughts.6 % ( 2 )8.8 % ( 27 )21.

4 % ( 66 )59.4 % ( 183 )9.7 % ( 30 )100.0 % ( 308 )I am unfastened to alter.1.0 % ( 3 )1.0 % ( 3 )65 % ( 20 )63.

1 % ( 195 )28.5 % ( 88 )100.0 % ( 309 )

Table 2: Situation with respect to a cognition civilization.

Harmonizing to Figure 1 the ability to use cognition direction patterns is apparent of a strong cognition direction civilization, which includes the elements that constitute a learning endeavor. Knowledge direction patterns are applied in the endeavor and 62.

3 % of the respondents agreed that the endeavor has a cognition direction civilization. This determination supports the findings of Mostert and Snyman and Kok that top direction has an impact on cognition direction patterns in an endeavor. Harmonizing to Figure 1 senior direction supports knowledge direction activities in footings of promoting employees to be unfastened to alter and to implement their ain thoughts in the endeavor.

Figure 1: Knowledge civilization

Knowledge sharingIt is clear from Figure 2 that cognition sharing is the most seeable cognition direction pattern and particular notice should be taken of the employees ‘ positive attitude to knowledge sharing. Respondents indicated that they portion knowledge chiefly via on-the-job observations and brainstorming. A concern is knowledge sharing via Communities of Practice. It could be because employees are unfamiliar with the construct, usage or benefits of a Community of Practice.

This is an facet that needs attending when developing a cognition direction scheme.

Figure 2: Cognition sharing

Respondents were besides asked whether they use IT to portion cognition ( Table 3 ) .

Not at all

Very small


Great extent

Very great extent


Electronic mail0 % ( 0 )0 % ( 0 )2.1 % ( 6 )26.7 % ( 76 )71.2 % ( 203 )100.0 % ( 285 )Intranet3.5 % ( 10 )9.

9 % ( 28 )29.6 % ( 84 )35.6 % ( 101 )21.5 % ( 61 )100.0 % ( 284 )Database systems ( information depositories )2.5 % ( 7 )11.6 % ( 33 )28.

9 % ( 82 )35.2 % ( 100 )21.8 % ( 62 )100.0 % ( 284 )Document direction systems5.7 % ( 16 )19.4 % ( 55 )30.

0 % ( 85 )35.2 % ( 90 )13.1 % ( 37 )100.0 % ( 283 )Chat suites24.6 % ( 70 )29.5 % ( 84 )28.1 % ( 80 )11.2 % ( 32 )6.

7 % ( 19 )100.0 % ( 285 )

Table 3: Use of IT to portion cognition

With respect to the current usage of IT to portion cognition in the company, 71.2 % of the respondents use e-mail to a really great extent. Merely 57.1 % of respondents indicated that they use intranets to portion cognition to a great extent.

This could bespeak a deficiency of expertness databases available or a deficiency of company expertness. The comparatively high per centum ( 19.4 % ) of respondents bespeaking that they use document direction systems ‘very small ‘ might bespeak a deficiency of cognition or consciousness of these systems, or it could be an indicant that some of these systems are non used in the company. Information systems are enablers to pull off cognition and it is of import that the endeavor sees information systems from a cognition direction position in order to gain their full potential18.The overall analysis of the formal and informal channels of cognition sharing indicates that the endeavor is making good in cognition sharing. The cross-tabulation of cognition sharing at direction degree ( Figure 3 ) indicates a disproportional response value in regard of cognition sharing at executive and senior direction degree and cognition sharing at in-between direction and junior direction degree. This is a cause of concern.

Middle directors are the future leaders in the endeavor and the transportation of their tacit cognition is indispensable for a cognition direction civilization in the endeavor. Specific intercessions will necessitate to be established to promote knowledge sharing at in-between and junior direction degrees. Making a knowledge-sharing civilization in the endeavor requires strong leading and the attitude of the executive and senior direction to sharing their cognition is promoting.

Figure 3: Management degree and cognition sharing

From the findings of the empirical study it can be concluded that the respondents had different readings of what cognition direction entails. There was besides a clear apprehension of the importance of cognition direction and recognition that it could be a beginning of sustainable competitory advantage. The findings indicate that people are the key to the execution of the cognition direction scheme.


Employees and concern leaders of the life-insurance company are cognizant of the importance of cognition direction.

The empirical consequences show that without formal execution of a cognition direction scheme, knowledge-sharing procedures are non practised to their full potency ( particularly on in-between direction and junior direction degrees ) , even in an bing learning civilization. Executive direction should be embassadors of cognition direction and should promote all employees to portion their cognition. To function the rapid alterations happening in the fiscal industry and help the endeavor in going a true acquisition administration, the endeavor should supply in-depth apprehension of cognition direction to its staff to assist ease pull offing cognition in pattern and papers any best possible pattern. In position of the findings certain recommendations were made to the life-insurance company.

All knowledge-based endeavors strive to accomplish competitory advantage within the market place. However, the life-insurance company should accommodate itself to the people who work for it, the environment in which it is located, and the markets it is seeking to function. This combination of concern demands and personal demands of all employees is a delicate balance necessary to accomplish optimum use of all resources. The company could follow the undermentioned stairss to implement the cognition direction scheme:

Stairss to explicate a cognition direction scheme

Because of the comparative freshness of cognition direction to most endeavors, it is necessary foremost of all to derive conceptual apprehension of what cognition direction is, its relationship with other direction activities of the endeavor and its importance to the endeavor. In an endeavor, stairss should be taken to make new knowledge assets, better the value of the bing cognition assets and maximize the value derived from use.The links between the knowledge assets and the procedure of pull offing these assets are the stairss taken by direction and their consequence on the position of the assets.

Knowledge plays a important function in the competitory nature of endeavors and hence constitutes a critical constituent of endeavor scheme. This so implies that the endeavor needs to guarantee that it applies all that it knows and considers relevant to its strategic planning procedure, climaxing in an internal and external spread analysis. In this procedure awareness demands to be taken of what the endeavor knows, needs to cognize, what its rivals know and what the larning capablenesss of the endeavor and those of its rivals are.Many cognition direction models are available, for illustration the Skandia-Navigator, Wiig ‘s model and Hedlund and Nonaka ‘s model. However, it is the sentiment of the writers that it is hard to sell these models to senior direction.

This sentiment is confirmed by Mostert, who states that formal cognition direction is still in a procedure of development and that models are of small benefit unless they are useable by people in endeavors. Senior direction understands normally recognized direction theory and a cognition direction scheme based on theory associating to a SWOT analysis has proved itself as a good starting point hence, and other attempts can be leveraged from its success. A cognition direction scheme can be seen as a long-run program aimed at pull offing cognition for competitory advantage in an endeavor. The scheme involves the following four stairss:External analysisExternal analysis involves an scrutiny of the relevant external elements of the endeavor.

The analysis should be purposeful, concentrating upon the designation of menaces, chances, strategic inquiries and strategic picks. A strategic inquiry stimulated by any external analysis constituent can bring forth a cognition need country, a strategically of import country for which there is likely to be a go oning demand for information. A cognition plus is a cardinal success factor that is needed to vie successfully. Successful endeavors are usually strong in several cardinal success factors and non weak in any.Opportunities in the external environment that can be exploited utilizing a cognition direction attack should be identified, every bit good as menaces ( in footings of cognition acquisition ) in the schemes of rivals that could impact the competitory place of the endeavor. Ways to counter these menaces should be developed. External analysis is of import from a cognition direction point of position, since the cognition direction scheme must take awareness of the rivals ‘ actions and knowledge direction strengths and failings.

When analyzing the external environment, the undermentioned inquiries can be asked:What opportunities does our current scheme nowadays that can be exploited utilizing a cognition direction attack?What cognition direction chances does the external environment offer that we can work in our endeavor?How can we assist the endeavor through cognition direction with its chances ( clip to market, improved design, distinction ) ?Are our rivals working a specific cognition direction scheme? If non, can we utilize knowledge direction to derive a specific strategic advantage?What menaces are present in our rivals ‘ schemes in footings of cognition acquisition?Are there any general cognition direction menaces that could impact our competitory place?How can we counter these menaces?Can knowledge-based actions negate a concern menace by:Geting a cognition plus?Sharing cognition?Changing strategic position?Contradicting a rival ‘s strength?Soul-searchingSoul-searching purposes to supply a elaborate apprehension of strategically of import cognition assets and countries of the endeavor. It is of import to find what the strengths and failings of the endeavor are in footings of:Knowledge assetsEnablers ( procedures, substructure, people, engineering ) .Employees in endeavors have specific cognition that enables them to prosecute options that achieve competitory advantages for both the endeavor and employees and the know-how and experience inherent in the endeavor ‘s memory bank. Intangibles, such as sustained invention, in-depth apprehension of client demands and the strategic use of an endeavor ‘s rational capital, are critical. Core concern procedures should be designed to back up the strategic way of cognition direction. The aims of the endeavor should direct all the cognition direction activities of the endeavor. Questions that directors might see as they identify an endeavor ‘s cardinal internal factors as strengths or failings and as a footing for the endeavor ‘s cognition direction scheme are the undermentioned:What are the endeavor ‘s strengths and failings in footings of:Knowledge assets?Enablers?How can the endeavor exploit the strengths and contradict the failings ( cognize the market needs, what other know-how and accomplishments should be developed ) ?How can the endeavor strengthen strengths and counteract failings through cognition direction ( new assets, improved plus use ) ?How can knowledge direction support the strengths?How can knowledge direction strengths help develop concern scheme?Strategy preparationThe intent of the external analyses and soul-searching is double: to assist bring forth strategic options and to supply standards to assist in choosing among them.

The following measure is to explicate a cognition direction scheme. A cognition direction scheme consequences from the directors ‘ consciousness of and responses to virtually unperceivable tendencies in the market place. The preparation of a cognition direction scheme depends on the ability of the endeavor ‘s leading to alter its civilization. Enterprises need to make chances for silent cognition to be made explicit9. As stated in a old subdivision, the cognition direction scheme should be aligned to the concern scheme and support nucleus concern procedures and cardinal strategic decisions.In explicating a cognition direction scheme, the undermentioned inquiries can be asked18:How can knowledge direction contribute to the attainment of the functional and finally strategic ends of the endeavor?Is knowledge on par with other endeavor resources, such as capital, natural resources, labor and entrepreneurship?Execution and ratingThe range of cognition direction can be huge and complex, as it spans all organizational maps.

When implementing a cognition direction scheme, the prioritisation of activities, every bit good as their integrating with other concern procedures, should be an of import direction focal point country. An rating of the cognition direction scheme compares public presentation with aims and measures the overall efficiency and effectivity of the endeavor ‘s efforts to achieve its stated purposes and aims. The rating procedure is used as a feedback mechanism for polishing the scheme. Without an on-going rating procedure, cognition direction will non go institutionalized, but become a random exercising, which does non match to rules of good direction.


Knowledge direction offers a new position to detect an endeavor and its managerial procedure. The range of a cognition direction scheme can be huge and complex, as it spans all organizational maps.

When implementing a cognition direction scheme, the prioritisation of activities, every bit good as their integrating with other concern procedures, should hence be an of import direction focal point country. This chapter discussed the cognition direction state of affairs in a life-insurance company.The empirical consequences showed that presently knowledge-sharing procedures are non practised to their full potency in the endeavor, although a learning civilization exists.Knowledge direction can non be separated from normal concern direction, and any effort to make so will necessarily neglect. There is no such thing as cognition direction per Se. Enterprises that truly want to stand out in the hereafter should be managed explicitly, consistently and comprehensively from a cognition position.

Good cognition direction will tackle the collective and single cognition within the endeavor to optimal consequence.