5 Strategy
Scenario 1. If an organization so far has applied an exclusive market-oriented strategy, then external determinants such as customers’ demands, the organiza-
5.2 Goals and strategies
5.2.3 Generic knowledge management strategies
Even though many authors have stressed the importance of a solid link between KM activities and an organization’s strategy, there are few authors who actually propose a knowledge or knowledge management strategy. In the following, the rare approaches found in the literature will be briefly reviewed including their rela- tionships to the strategic options.
One of the best known concepts for KM strategies is the duality proposed by Hansen, Nohria and Tierney (Hansen et al. 1999). They suggest that there are two different strategies which can be applied in the implementation of knowledge man- agement in companies: the codification strategy and the personalization strategy (Hansen et al. 1999, 109). The codification strategy focuses on the documentation and institutionalization of (explicit) knowledge212. The personalization strategy supports the direct communication link between individual (human) experts and knowledge users. In the former strategy, KMS play the role of a kind of “con- tainer” for knowledge elements, in the latter the systems are used as “knowledge expert finders”. The distinction between these two strategies which was derived from several case studies analyzed by Hansen et al. (Hansen et al. 1999) corre- sponds to the two “research streams” of knowledge management, one being an instrumental-technical one and the other one being a more human-oriented learning organization approach213.
Six of the strategic options of a knowledge management strategy214 can be com- bined with Hansen et al.’s distinction in personalization and codification strategy to form a multi-dimensional knowledge management strategy hypercube215 (see Figure B-17).
As stated in the critical reflection of the link between business and knowledge management strategies216, this approach rises a lot of unresolved questions. It is not clear how concrete KM initiatives could be positioned along the dimensions.
As turned out in the expert interviews, KM activities target a combination of e.g., exploitation and exploration, codification as well as personalization, tacit and explicit, the technological as well as the organizational infrastructure and most cer- tainly an unbounded use of knowledge sources. The KM strategy hypercube might not be suited to describe concrete KM strategies, apart from the basic distinction between a conservative, a moderate and an aggressive knowledge strategy217. The hypercube might rather be suited to show a portfolio of knowledge management
212. See also Zack 1999a who defines a framework for the management of explicit knowl- edge and expertise.
213. See also section 4.1.4 - “Definition” on page 52.
214. See section 5.2.2 - “Strategic options” on page 120.
215. The strategic options “explicit-tacit knowledge” and “technological-organizational socio-technical focus” are the two main determinants of the distinction made by Hansen et al. Codification means targeting explicit knowledge with a more technological focus whereas personalization means targeting tacit knowledge with a more organizational focus.
216. See section 5.1.2 - “Knowledge (management) strategy” on page 104.
217. See section 5.2.2.2 - “Types of knowledge and organizational learning” on page 122.
initiatives, position them on a corporate level and link them in a general way to business strategy.
FIGURE B-17. The knowledge management strategy hypercube
Bierly and Chakrabarti investigated the knowledge strategies in the U.S. phar- maceutical industry in their empirical study (Bierly/Chakrabarti 1996). They used a set of four strategic options measured by five variables218. With the help of a clus- ter analysis they identified the following four groups of organizations (Bierly/
Chakrabarti 1996, 128f):
x innovators: these are the most aggressive learners who effectively combine internal and external learning,
x loners: are the ineffective (or isolated) learners. They are slow in applying new knowledge, have a narrow knowledge base and their external linkage is lower than that of all the others,
x exploiters: spend the lowest amount on R&D, have a broad knowledge base, a high level of external linkage and focus external rather than internal learning, x explorers: put much emphasis on fast, radical learning. As compared to innova-
tors, explorers spend less on R&D and have a lower focus on external learning.
218. See section 5.2.2 - “Strategic options” on page 120. The five variables were: R&D bud- get (internal learning), average number of patent citations to the scientific literature (external learning), technological distribution of the patents (narrow-broad organiza- tional knowledge base), median age of the patents cited by a given organization’s pat- ents (slow-fast learning) and the ratio of new chemical entities and approved new drug applications (exploitation-exploration).
dimension 7
dimension 6
dimension 5 dimension 4
dimension 3 dimension 2 dimension 1
knowledge management strategy conservative
moderate aggressive
organizational focus internal knowledge external knowledge
sociotechnological focus codification
personalization
speed of learning slow learning fast learning
degree of innovation exploitation exploration
organizational knowledge base narrow knowledge base broad knowledge base target group
selected groups all employees business process focus single process selected processes all processes
A comparison of the financial performance of the four groups revealed a ten- dency for the innovators and explorers to be more profitable than the exploiters and the loners. However, from three five-year periods analyzed, the innovators were leading in two and the explorers were leading in one period. This suggests that dif- ferent strategies might lead to the best results depending on environmental circum- stances. Also, these tendencies might paint a valid picture of the pharmaceutical industry, but one has to be careful in taking these results to a different, say, less innovation-aggressive industry. Additionally, those organizations that remained in the same group for all three periods appeared to be more profitable than organiza- tions that changed their strategies. Those organizations that became more aggres- sive learners were also very profitable, though.
However questionable the representativeness of these results is, the categoriza- tion shows that successful generic KM strategies seem to balance several strategic options and to decide on the more aggressive options in the dimensions where a decision is necessary.
Brown and Duguid suggest to look at KM strategies as enabling architectures for organizational knowledge (Brown/Duguid 1998, 103). They suggest to imple- ment social strategies to promote the sharing and spreading of knowledge between communities. Basically, these social strategies comprise the institutionalization of organizational roles – translators and knowledge brokers219 – and boundary objects (Brown/Duguid 1998, 103ff). The latter can be physical objects, technologies or techniques shared by communities. They support active empathy220, because com- munities come to understand the perspectives of different communities. This in turn encourages reflection about practices of the own community and enables “sec- ond-loop” learning (Argyris/Schön 1978).
Apart from these generic KM strategies, many organizations might apply an
“implicit” KM strategy. These organizations might articulate the purpose and nature of managing knowledge as a resource and embody KM activities in other initiatives and programs, e.g., embed it in other projects for organizational change.
This “implicit” strategy reflects the lack of a clear agenda for KM. There are a lot of other management programs in organizations which can be used as a vehicle for KM activities. Examples are:
x technology-oriented programs: the development of an Intranet, the switch to a new office management or Groupware platform,
x HRM-oriented programs: the development of new training programs, recruit- ment programs, outplacement programs,
x business-oriented programs: BPR-projects, e.g., focusing the redesign of knowledge-intensive business processes, post-merger or post-acquisition inte- gration programs, quality management programs.
219. See section 6.1.2 - “Knowledge management roles” on page 162.
220. See section 6.4.2 - “Willingness to share knowledge” on page 223.