Knowledge Value Chain

The model consists of cognition radix ( intimacy thespian acquirement, intimacy terminus capacity, node/ supplier family and lay d accept and management), the regale of KM ( companionship acquirement, intimacy founding, experience protection, intimacy desegregation, and experience dissemination), and the fundamental interaction among those servings resulting in fellowship feat. still to the interchange of knowledge pass judgment concatenation (C.V.), the following viewpoint was proposed KM guides the way a bow window performs various(prenominal) knowledge activities and organizes its holy C.V..It was suggested that hawkish advantage make grows fall out of he way spates organize and perform clear-cut activities in knowledge app foment range of a function which should be measured by the core competency of corporation. This article also provides a cross-reference for e-commerce rehunters and practiti cardinalrs. cognition and knowledge management knowled ge vs. education association refers to an observers distinction of objects with which he brings forth from the background of experience a coherent and self-consistent clique of coordinated actions (Selene, 1987).Through the plow of distinction, individual pieces of data and instruction sire connected with one a nonher in a network of elation. fellowship thence is contained in the everywhere severally(prenominal)(a) place affable pattern of the network and not in any of the components. Knowledge is to a greater extent than information. Information is data imprint into meaningful patterns. Information is transformed into knowledge when a person reads, understands, see to its, and applies the information to a specific work function. Knowledge becomes visible when experienced persons hurl into practice lessons learned over time.One persons knowledge foundation be other persons information. If a person gutternot understand and apply the information to anything, it rema ins bonnie information. However, another individual shadow take that alike(p) information, understand it and interpret it in the context of previous experience, and apply the newly acquired knowledge to launch business decisions or redefine a laboratory procedure. Yet a third person may take the same pieces of information, and by his ridiculous face-to-face experiences or lessons learned, apply knowledge in ways that the south person may never hold even considered.Information is a component section but not the whole of knowledge (Michael, 1982). Knowledge itself is a much much all-encompassing term that incorporates the concept of beliefs found on information (Dressed, 1981). It also depends on the commitment and understanding of the individual retentivity these beliefs, which are affected by large numbers interaction and the development of judgment, behavior and strength (Berger and Lackawanna, 1967). Journal of focus Development, Volvo. 19 NO. 9, 2000, up. 783-793. MAC university press, 0262-1711 Journal of Management Development 19,9 784 understand vs. uttered Tacit knowledge is that knowledge which cannot be explicated fully even by an expert and can be transferred from one person to another only by dint of a long passage of apprenticeship (Poland, 1962). Payolas famous dictum, We know more than we can ell, points to the phenomenon in which much that constitutes gay skill remains unarticulated and known only to the person who has that skill. Tacit knowledge is the skills and know-how we have inside each of us that cannot be easily shared (Limit, 1999).In fact, twain of the definitions have the same meaning. In contrast, plain knowledge is relatively easily to articulate and communicate and, thus, transfer amid individuals and organizations. verbalised knowledge resides in formulae, textbooks, or technical documents. Analogous to the understood and transparent dichotomy, Goff (1989) sakes a distinction between embodied or action - centimeered, skills and intellective skills. Action-centered skills are amplyly-developed through and through actual effect ( tuition by doing).In contrast, intellective skills combine abstraction, explicit reference, and adjective reasoning, which makes them easily representatives as symbols and, therefore, easily transferable. The conceptual distinction between implicit and explicit knowledge also appears in Reed et al. s (1996) hold forthion of causally ambiguous competencies. They describe tactics as residing in the unfitness of even a skilled individual to spell out explicitly the session rules and protocols that form the basis of carrying into action. Obduracy (1991) conceives of tacit knowledge as existing in individuals or groups of individuals.He refers to such knowledge in individuals and loving groups as embedded knowledge. Similar distinctions between explicit and largely tacit knowledge in organizations have been make by Scribners (1986), Monika (1988), Huddled (1994), and Bonn (1994). declared knowledge is the knowledge that can be easily captured artificially through manuals and standard operations, and then shared with others either through Hough courses or through books for slandering. In an organization, tangible knowledge takes the form of Job procedures as considerably as the companys philosophy and strategy.Knowledge management Information is becoming ever more important in our economy, and almost corporations see that knowledge can chatter war-ridden advantage. But corporations are already flooded with information, and most of us have more of it than we can handle. Knowledge management (KM) tries to resolve the hard paradox (Anthem, 1998). A common definition of KM is The collection of processes that reign over the creation, assimilation and leveraging of knowledge to fulfill organizational objectives.KM is an uphill set of organizational bearing and operational principles, processes, organizational structures, applicatio ns and technologies that helps knowledge workers dramatically supplement their creativity and ability to deliver business value. In fact, KM is virtually pack and the processes they use to share information and build knowledge (Hanley, 1999). marshal (1997) considered that KM refers to the harnessing of sharp capital within an organization.KM theory discusses accessing and using all information within an institution, enabling individuals to apply pertinent information to what they already know, in order to create knowledge. The theory recognizes that knowledge, not simply information, is the superlative asset to an institution. It includes the strategies and processes for identifying, capturing, share, and leveraging the knowledge required to survive and compete successfully into the twenty- graduation exercise century (Gatchis, 1999). KM focuses on doing the right thing alternatively of doing things right.In our thinking, KM is a framework within which the organization view s all its processes as knowledge processes. Knowledge value chain model Differences among antagonist value chains are a see source of competitive advantage. In competitive terms, value is the amount customers are willing to invent for what a corporation provides them. Value is measured by total revenue, a reflection of the price a corporations product commands and the units it can sell. A level is profitable if the value it commands exceeds the costs involved in creating the product (Porter, 1985).Creating value for customers that exceeds the cost of doing so is the goal of any competitive strategy. Value, instead of cost, mustiness be employ in analyzing nominative position since corporations often advisedly raise their cost in order to command a premium price via differentiation. Employing Porters value chain analysis approach, we developed a knowledge value chain model. Knowledge value chain consists of KM stem and the KM processs activities and knowledge performance. Th ese infrastructure components and activities are the building blocks by which a corporation creates a product or provides run priceless to its customers.Knowledge performance can be measured in two categories (van Burden, 1999). One is financial performance. However, financial assessments such as ROI are particularly difficult to make for KM activities. The other is non-financial measures including operating performance outcomes and direct measures of acquisition. Examples of operating performance measures include lead times, customer satisfaction, and employee productivity. Learning measures include such items as the number of participants in communities of practice, employees trained, and customers affected by the use of knowledge.All the non-financial measures can be regarded as the reflection of core competence of corporation. The KM processs activities are listed on the bottom of fancy 1 . In any corporation, the KM process can be divided into the five categories shown in Figure 1. KM infrastructure supports the KM process activities. The dotted lines reflect the fact that customer/supplier relationship, knowledge storage capacity, and knowledge worker recruitment can be associated with 785 786 Figure 1. Model specific KM process activities as well as support the entire chain.COOK and management are not associated with particular KM process activities but support the entire chain. Components of KM infrastructure Knowledge worker recruitment The term knowledge worker refers to the worker who possesses competencies, knowledge, and skills in the organization such as computer engineers, accountants, and so forth If a person leaves the organization, their knowledge goes with them. Knowledge is acquirable and renewable. It is the source of innovation and creativity. This is the traditional focus of many training and education programs.In the knowledge economy, knowledge permeates through everything important people, products organizations. There have alw ays been people who worked with their minds preferably than their hands. In knowledge era, these are the majority of the workforce. Already, almost 60 per cent of American workers are knowledge workers. Recruiting knowledge workers in organizations is a key drill in the long term. Knowledge storage capacity Knowledge storage capacity is organizational memory and capabilities for people to store and recycle information and knowledge.It involves the organizations routine operations and structures that support employees quests for optimum intellectual performance and, therefore, general business performance. An individual can have a high level of knowledge, but if the organization has poor systems and procedures by which to track his or her actions, the overall knowledge resource will not reach its fullest potential. Knowledge storage capacity is owned by the organization. It is retained by the organization when employees leave. There exist two organizational structures, formal and informal.In formal organizations, people easily access explicit knowledge. Informal organizations are rich in tacit knowledge, which usually is the source of innovation. It is difficult to articulate in composing and is acquired through personal experience. It is shared by intensive face-to-face chat. To funding the costs of knowledge transfer low, angers try to turn inherently tacit knowledge into explicit knowledge. There are different approaches to implement KM, it depends on what kind of knowledge your people assert on to solve problem.When employees rely on explicit knowledge to do their work, the people-documents approach makes the most sense. When people use tacit knowledge most often to solve problems, the person-to-person approach works best. Customer/supplier relationship Customer/supplier relationship refers to the organizations relationships with its customers/suppliers. It might include customer/supplier loyalty for function or reduces, the purchasing/sale patterns of different customer/supplier groups, customer/supplier service reputation, warranties and undertakings by customer/ supplier, and database for customer/supplier.The relationship between a corporation and its suppliers is very important and can be regarded as a intangible and agile asset of the corporation. It enables corporation to meet the call for of customers at a lower cost. Owning more stable and closer relationship with suppliers than its competitors path that the corporation has gained a superior competitive position over its competitors. In other words, the applier relationship is mainly for cost insure purposes. Understanding better than anyone else what customers want in a product or a service is what makes someone a business leader as opposed to a follower.Turning knowledge into new customized products and services will increase a corporations market value. COOK and management As a corporation undertakes a KM program, the position of chief knowledge officer (COOK) is emerging to coordinate the KM infrastructure components and KM activities. The COOK is entrusted with the role of transforming intellectual property into a business value. In other words, The COOK is responsible for(p) for the overall knowledge assets of a company and for defining the area in which the knowledge capabilities of the organization should evolve, based on its ongoing mission and vision.The COOK has the ultimate corporation-wide responsibility for the controlled vocabulary and knowledge directory and tackles the difficult issues associated with cross-department or cross-corporation processes that have unique knowledge-sharing requirements. The COOK also is responsible for ensuring that an appropriate technology infrastructure is in place for effective KM. The COOK has two principle design competencies He is a technologist or environmentalist. Breadth of career experience, familiarity with his organization, and infectious enthusiasm for his mission are characteristic of the COOK. 87 788 In this research, both the COOK and management can be considered as support not only for the other three infrastructure components, but also for the entire process of Process of knowledge management As noted in Figure 1, the process of KM consists of five activities knowledge acquisition, integration, innovation, protection, and dissemination. Knowledge acquisition In order to do something we need to track down and contemplate all the information and explicit knowledge that is available.This will lead to ancestry the process of knowledge acquisition via knowledge management infrastructure. We will discuss two processes through which organizations acquire information or knowledge meddling and organizational skill. Organizational information acquisition through seek can be viewed as occurring in three forms (Huber, 1991) (1) scanning (2) focused search and (3) performance monitoring. Scanning refers to the relatively wide-ranging sensing of the organizations external environment.Focused hard-hitting occurs when organizational members or units actively search in a sign up segment of the organizations indispensable or external environment, often in reception to actual or suspected problems or opportunities. Performance monitoring is used to mean both focused and withdrawing sensing of the organizations effectiveness in fulfilling its own practicalities goals or the requirements of stakeholders. Noticing is the unintended acquisition of information about the organizations external environment, internal conditions, or performance.Organizational learning plays a vital role in knowledge acquisition. The need for organizations to change continuously, which was emphasized by Trucker, has long been the central anguish of organizational learning theorists. in effect(p) as with individuals, organizations must always rest novel aspects of their circumstances (Cohen, 1991). It is widely agreed that learning consists of two kinds of bodily f unction. The first kind of learning is obtaining know-how in order to solve specific problems based upon existing premises.The second kind of learning is establishing new premises (paradigms, schemata, mental models, or perspectives) to override the existing ones. These two kinds of learning have been referred to as Learning l and Learning II (Battens, 1972) or single-loop learning and double-loop learning (Argils and Chon, 1978). From our viewpoint, knowledge acquisition and knowledge innovation certainly involve interaction between these two kinds of learning, which forms a kind of dynamic spiral. Sense (1990) accept that many organizations suffer from learning disabilities.To cure the diseases and enhance the organizations capacity to learn, he proposed the learning organization as a practical model. He argued that the learning organization has the capacity for both generative learning (I. E. Active) and adaptive learning (I. E. Passive) as the sustainable sources of competiti ve advantage. Knowledge innovation In a strict sense, knowledge is created only by individuals. An organization cannot create knowledge without individuals. The organization supports creative individuals or provides contexts for them to create knowledge.Organizational knowledge innovation, therefore, should be understood as a process that organizationally amplifies the knowledge created by individuals and crystallizes it as a part of the knowledge network of the organization. There are in truth three levels of knowledge- creating entities including individual, group, and organization. On the other hand, the conversion of tacit knowledge to explicit knowledge is a key process in creating new knowledge. A knowledge-innovation spiral emerges when the interaction between tacit and explicit knowledge is high-sounding dynamically from a lower level knowledgeableness entity to higher levels.The assurance that knowledge is created through the interaction between tacit and explicit knowle dge leads to quaternity different modes of knowledge conversion. The four modes actually are four realizations (1) from tacit knowledge to tacit knowledge, which is called colonization (2) from tacit knowledge to explicit knowledge, or sterilization (3) from explicit knowledge to explicit knowledge, or confederacy and (4) from explicit knowledge to tacit knowledge, or naturalization. Knowledge protection apology of knowledge is important because it protects creativity and the interests of knowledge-owners.In legal systems protection of knowledge mean protection of Intellectual Property Rights (PR) such as copyrights and patents, which includes revision for a right of legal action against infringes of PR and provisions detailing persons or corporations empowered to authorize the commercial use of PR and allowing the owner of PR to charge fees for such commercial uses. In a sophisticated information technology (IT) system, knowledge will be protected by filename, by surname, by pa ssword, etc. So that knowledge can be applyd when it receives a request and checks against the standard file-sharing users and group table to determine what rights the user has. In addition to legal and IT protection, corporations should contract with employees guarding confidential information and their tenure in case of they 789 790 leave, and should also develop other protocols and policy guidelines which recognize and conjure rights of knowledge, and then implement them by staff awareness and education campaigns.Knowledge integration Latest advances of information technology can facilitate the processes such as acquiring and disseminating knowledge however, the final burden is on people deciding how to translate this raw knowledge into actionable knowledge by means of an acute understanding of their business context. This is a internal knowledge integration process. Corporations have always had some process to synthesize their experience and mingle it with knowledge acquired from outside sources (e. G. Inventions, purchased patents).A corporation acquires knowledge from years of experience in such things as manufacturing, sales, and service. This cumulative experience from different departments, together with information gathered from outside sources, can be integrated into the C.V. of the organization, which is a inter- sub-C.V. integration process, eventually being the base of KM infrastructure. Knowledge dissemination The most effective way to disseminate knowledge and best practice is through systematic transfer. That is, to create a knowledge-sharing environment.It is no coincidence that IT has blossomed at the same time that knowledge is becoming recognized as the most semiprecious of a corporations assets. Explicit knowledge can be shared through an IT system. However, tacit knowledge is best shared through people. The more valuable the knowledge, the less sophisticated the technology that supports it. Dissemination of tacit knowledge is a socia l process. People must contribute knowledge to become part of a knowledge network. IT alone will not remove authoritative KM barriers.IT will not change peoples behaviors, increase managements commitment, nor create a shared understanding of its strategy or its implementation. To show its commitment for sharing knowledge, an organization should foster the employees willingness to share and contribute to the knowledge base. This may be the most difficult obstacle to overcome. Current performance and rewards systems exemplify an individuals personal achievement and rarely take into account an individuals contribution to or conjunction in formal collaboration efforts.Reward structures and performance metrics need to be created which benefit those individuals who contribute to and use a shared knowledge base. Those who pass at knowledge sharing should be recognized in semipublic forums such as newsletters and e- mails. By effective communication, the knowledge disseminated flows to the acquirers who are searching for and learning knowledge or information they need. Employees must be made to understand that the success and advancement in their career will be based on KM principles.KM skills must be seen to be as important to career advancement as continuing education and communication skills. C.V., business value chain, and competitive strategy As the value chain itself implies, each element of activity can create value and then all the value flows to the endpoint of the business value chain and Joins together, forming the overall value of business, which is usually expressed as a margin (see Figure 2). Probing deeply, we can find that the added value comes from the competence of element activity itself, which in turn comes from specific suburb of itself.For example, sub-C.V. in inbound logistics (IL) activity enables business to gain the inbound logistics competence, and then the added value follows. The same process occurs in other activities including operat ions (POP), outbound logistics (OLL), marketing and sales (MS), and service (SE). Finally, all 791 Figure 2. Relationship between business value chain and C.V. 792 the sub-Kvass are integrated together into the whole C.V.. In the process of knowledge integration, the competence of knowledge infrastructure is gradually forming. In the end, corporation competence follows C.V..By analyzing the above, we might note that competence is after all the measurement of each sub-C.V.. That is the reason why we feel that the core competence of the corporation should be employed as the key non- uncial measure of knowledge performance. In the whole process of KM, the innovation activity fits the product differentiation strategy, which can enable corporation gains the competitive advantage, as mentioned before (see Figure 3), date reusing knowledge fits low cost strategy, by which competitive advantage gained again.In consulting corporations, its Just like building with bricks consultants reuse ex isting bricks while applying their skills to construct something new. The reuse of knowledge saves work, reduces communication costs, and allows a company to take on more projects. A case study of KM by Hansen et al. (1999) noted that, as a consequence, corporations such as Andersen Consulting and Ernst & Young have been able to grow at rates of 20 per cent or more in recent years. Ernst & Young worldwide consulting revenues, for example, increased from $1. Billion in 1995 to $2. 7 billion in 1997. Generally, managing knowledge assets should, like patents, trademarks and licenses, even add knowledge to the balance sheet. Conclusion and further discussion Knowledge is information sum causal links that help to make sense of this information. KM is a process that transforms information into knowledge. KM guides the way a corporation performs individual knowledge activities and organizes its entire knowledge value chain.It is suggested that competitive advantage grows out of the way co rporations organize and perform discrete activities in the knowledge value chain, which should be measured by the core competence of the corporation. In the end, we would raise another assumption for further discussion, so that for KM to open the pitch-black box of a corporation and examine its intricate details. We assumed that the corporation should be treated more or less as a box of tricks reducing the predictable outputs of knowledge-based products and services from specific inputs of information or/and knowledge.