Knowledge Management-Based Competitive Advantage

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Knowledge Management and Competitive Advantage

On the introduction of knowledge management initiatives in companies:
‘…too many people when introducing KM just introduce KM because it’s a good thing and they just have a general belief that it will make things better. When it is intro-duced in that way it tends to fail…’ (Dawson, R., interview, 2012-04-27)
In addition to lack of readiness on the part of employees as a reason for knowledge management project initiatives failing, Dawson added that implementing knowledge management techniques with only a general idea and direction is also a huge factor behind these failures. Not having a specific direction behind the introduction of KM makes it extremely difficult to have criteria to measure its success. Dawson acknowl-edged the difficulty in measuring such as abstract concept such as knowledge put of-fered to explain the way in which he had tackled this in his experience as a consultant to other companies.
He proceeded to explain that he confronted the issue of measuring the impact of knowledge management initiatives in a different way. This was to first ask the compa-ny he (and his team) would be working with what problem it is that they are trying to solve. Identifying a specific problem or situation helps create a direction in the knowledge management initiative, hence making its impact measurable in regards to that problem or that specific situation. When the problem is identified then he would estimate the cost of the problem: this means how much in financial terms the problem cost the company in terms of decrease in turnover and/or profits. In that way, when the knowledge management initiative is introduced, the company can actually meas-ure the impact in straight forward cost ways and confidently say state that the initia-tive has saved the company a particular amount of money because it reduced that par-ticular problem by that much. Furthermore, he added that if one presents an initiative in this manner; identifying a problem and setting out to address it, it makes people in-terested in doing it as well, as long as they also understand the problem.
He explained that he understands that there may be other benefits to introducing a knowledge management initiative but those benefits will not be directly discernible. This would be because the knowledge management initiative was not directed at those issues specifically, making it difficult to measure its impact on those issues not aimed at. He added that the reason he tackled the problem in knowledge management in this way was so that people would ‘buy-in’ into the problem, from senior management all the way to the bottom. If the issue is focused on as a problem that everyone under-stands and identifies with they will be willing and prepared to solve the problem using the initiatives in the knowledge management project.
Dawson continued to emphasize that this identification of a specific problem was key in making knowledge management initiatives succeed and that in from his experience and observation general knowledge management initiatives without a predetermined problem or situation to address had a success chance of less than 10%. The problem to be solved has to be recognized by everybody in order for them to be in a ready and willing state of mind to do something about it.
Dawson further explained that when identifying these problems to be solved, it is of-ten prudent to have the problems defined in financial terms – a language that manag-ers understand fully well. Drawing from his experience in consulting companies, he re-layed that when these problems are converted into costs then managers in general tend to pay more attention, as money is essentially what they are mostly interested in. In the projects he was consulting in, Dawson assisted companies in saving from thou-sands to millions of British pounds (an example being in Rolls Royce where they man-aged to save about 5 million pounds within a year of the implementation). Using these examples, he continued to emphasize that first the problems to be solved need to be converted into figures and costs, so that managers and the general employees can un-derstand and have a better feel of the problem and its direct impact on the revenue of the company.
When these problems are explained as they are in reality, sometimes they do not con-vey the necessary urgency and gravity to managers, so converting them into financial figures is a way of explaining them in a way that every employee can understand, and want to do something about it. Dawson concluded by referring back to the approach that he has used to introducing knowledge management systems saying that having a problem-solving based approach is very practical and has proved him to be an effective approach when dealing with knowledge management initiatives.

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Interview with Louise Cooke

Dr. Louise Cooke is a senior lecturer at Loughborough University and has also been di-rectly involved with a number of knowledge management projects, so her perspective is a blend of an academic and practitioner point of view.

Knowledge and Knowledge Management

Cooke, on her definition of knowledge management:
‘I would conceptualize KM as the strategic management of intellectual assets of an or-ganization in support of competitive advantage and organizational objectives.’ (Cooke, L., interview, 2012-04-19)
Cooke’s definition of knowledge management stems from a strategic perspective of an organization and management of resources. Knowledge management, from her per-spective would encompass the acquisition, codification, storage dissemination and sharing of knowledge.
Knowledge management, which naturally includes knowledge, is not only an asset in the pursuit of competitive advantage but also in general business objectives. Although Cooke states these uses for knowledge management, she also recognizes that it (knowledge management) does not get much recognition, and this is something clearly seen by those directly involved in the field. Regardless of the limited recognition of the concept, Cooke adds that she has noticed people becoming increasingly familiar with the concept, and it not being the alien concept it perhaps was a decade ago. From her experience, mostly in public sector organizations, she has seen increasing recognition of the importance of knowledge management – but just as equally has observed or-ganizations engaging in knowledge management initiatives without actually recogniz-ing them as knowledge management initiatives per se.

1 Introduction 
1.1 Background to the Research
1.2 Problem Discussion – Making the Case for Knowledge Management
1.3 Objectives and Research Questions
1.4 Delimitations of the Study
1.5 Definition of Major Terms
1.6 Perspective of the Study
1.7 Disposition of the Thesis
2 Methods
2.1 Research Philosoph
2.2 Research Study
2.3 Research Approach
2.4 Research Method
2.5 Data Collection
2.6 Time Horizon
2.7 Credibility
2.8 Data Analysis
3 Theoretical and Conceptual Frame of Reference
3.1 Strategic Management
3.2 The Resource-Based View
3.3 Knowledge Management
3.4 Competitive Advantage
3.5 Knowledge Management-Based Competitive Advantage
4 Empirical Data
4.1 Interview with Javier Davila
4.2 Interview with Ray Dawson
4.3 Interview with Louise Cooke
4.4 Interview with Anonymous
5 Analysis
5.1 Knowledge and Knowledge Management in Organizations
5.2 Processes in Knowledge Management
5.3 Technology in Knowledge Management
5.4 People in Knowledge Management
5.5 Culture in Knowledge Management
5.6 Significance of the Empirical Data to the Research
6 Conclusions and Implications

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Knowledge Management as a Strate gic Resource to Gain Competitive Advantage

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