& Case StudyKnowledge Management in Small Firms John Sparrow* Knowledge Management Centre, University of Central England, UK This paper discusses features of small firms that combine to
Trang 1& Case Study
Knowledge Management in Small Firms John Sparrow*
Knowledge Management Centre, University of Central England, UK
This paper discusses features of small firms that combine to constitute a different milieu for knowledge management It reports upon work conducted with many small firms and presents
a model of considerations and phases in knowledge management projects in small-firm settings Copyright # 2001 John Wiley & Sons, Ltd.
INTRODUCTION
Knowledge management
There can be little doubt that effective leverage of
knowledge will be the key to business success in
the future Particular economic concepts have been
argued to have become increasingly central to
business and national competitiveness These
include the economics of knowledge (Machlup,
1984), core capability (Prahalad and Hamel, 1990),
co-production of value (Wikstrom and Normann,
1994) and adaptability/innovation (Bolwijn and
Kumpe, 1990) In addition, there is an increasing
contribution of digital technologies to decision
making in terms of their knowledge-processing
characteristics and support for collaborative effort
through enhanced communication (Hougaard and
Duus, 1999) The ability for sets of individuals/
businesses to continuously manage their
adapta-tion in order to co-produce, on the basis of their
respective strengths in knowledge terms
(increas-ingly independently of geographical/temporal
constraints), represents a fundamental challenge
to conventional business, management and
eco-nomic practices
Managing the value that can be derived from
knowledge is a challenge for all businesses, large
and small Understanding of the organizational
theory and practice considerations of knowledge
management has largely been derived, however,
from large company developments It seems clear
that small and medium-sized businesses will need
to address their knowledge management practices, but that, like so many aspects of business and management, the issues that small and medium-sized businesses will face will not be simply a scaled-down replica of large-company experiences
Knowledge Management Centre research programme
The Knowledge Management Centre has been established as a regional partnership between a university, and local city council, and business support agencies in the West Midlands of the United Kingdom to identify and address the business support needs for small and medium-sized enterprises (SMEs) in developing their knowledge management (KM) practices
This paper draws upon a programme of in-depth qualitative research to explore knowledge practices, KM development and business support needs of SMEs The research process has entailed survey, passive observation, action research and process consultation phases/stances Nearly one hundred businesses have been involved In-depth study has taken place in a small number of businesses for periods of between twelve and eighteen months In the course of the work, a number of insights into key issues in knowledge management in SMEs have been derived from case studies of the ‘unaided’ learning and KM practices
of SMEs, case studies of gaining ‘entry’ into SMEs for knowledge projects, surveys of attitudes to KM
in SMEs, and in-depth facilitation of knowledge management in several SMEs Whilst a number of reports have been produced by members of the
*Correspondence to: John Sparrow, Knowledge Management
Centre, University of Central England, Perry Barr, Birmingham
B42 2SU, UK E-mail: john.sparrow@uce.ac.uk
Trang 2team upon particular facets of knowledge
manage-ment (e.g Martin, presentation to the Staff
Semi-nar Institute for Manufacturing, University of
Cambridge, 1999; Shelton, 2000; Sparrow et al.,
1998; Sparrow, 1999; 2000; Zetie, 1998), the overall
thrust of the findings (and their shaping influence
on the ‘model’ of SME KM development that has
evolved to date) has not been articulated This
paper represents an initial attempt to ‘map’ this
territory and present the ‘rationale’ behind the
approach towards supporting KM development in
SMEs that has evolved to date
KNOWLEDGE MANAGEMENT-RELATED
FEATURES OF SMALL FIRMS
Drivers, evolutionary paths and business
priorities
Drivers
As has been the case with earlier generations of
ICT innovations (e.g Hepworth and Ducatel,
1992), the adoption of knowledge technology in
small businesses seems to be led by clients,
especially large customers and suppliers The
automotive best-practice forum held by Arthur
Andersen in January 1999 (Livernois and Miller,
1999) identified a number of knowledge gaps
emerging as suppliers’ responsibilities increase In
our work, cases have been identified where
significant restructuring of the activities of major
customers have had implications for the skills/
capability of SMEs At the personal level, there is
broad evidence that small business
owners/man-agers may need to have reached a point of genuine
‘fear’ of a prospective difficulty before they act
(e.g Berry and Perren, 1998; Sparrow and
Good-man, 2000) Engaging small businesses in a
reflective process that signals a compelling need
appears to have value These drivers are in
contrast to the technological push considerations
that can be a primary driver in larger firms
Evolutionary paths
While methods in small businesses might appear
‘informal’, they have often been found to support
quite sophisticated decision-making (e.g Lightfoot
and Kitchen, presentation to the Small Business
and Enterprise Development Conference, Leeds,
1996) and large business (more formal) practices
should not be ‘imposed’ (e.g North et al.,
pre-sentation to the 18th ISBA National Small Firms
and Policy Conference, University of Paisley,
1995) There is evidence from studies of
manage-ment information, control and decision making in
small firms that shows the ‘development of information and control systems to have a proces-sual and apparently adventitious nature [where] the chains of causality are quite complex’ (e.g Berry and Perren, 1998: 904) Berry and Perren (1998) cite by way of example, the importance of the ‘process’ that lay behind a case study busi-ness’s ‘extension’ of an accounts package to a broader information system
The work of the KMC team to date indicates that any need for technical enhancement of a know-ledge management ‘system’ is more likely to
‘resonate’ in a small business that has already sensed the value of information management Appreciation of the strategic importance of ‘core capability’ may come more easily to an SME that has seen one aspect of the relationship between business strategy and human resources through involvement in the Investors in People pro-gramme The importance of systematic analyses
of business processes and linkages to key know-ledge may be understood more readily by an SME that has engaged in a ‘quality’ (e.g ISO 9000, Business Excellence model) improvement initia-tive
Current business priorities With the resource constraints of SMEs in mind, Sparrow (1999) suggested that a specific pressing business situation might constitute the most appropriate opportunity for a small business to initiate a knowledge project Braganza et al (1999) suggested that it might be useful for businesses to classify and manage their knowledge projects on the basis of their contribution to innovation They distinguish between knowledge projects that expe-dite efficiency benefits to the firm, enhance the relative performance of the business in its sector, exploit a new opportunity for a firm to gain advantage in its industry, or explore possible innovations SMEs appear to be most attracted to the first two forms of knowledge project
In the Knowledge Management Centre’s case study SMEs, process innovations, joint ventures, ownership succession, and restructuring have each provided an opportunity for the ‘lens’ of know-ledge management to be brought to bear
Components of knowledge management initiatives in SMEs
Four components of knowledge management in small firms have been found to figure strongly in small firm knowledge projects These are depicted
in Figure 1
Trang 3Appreciation of personal and shared understanding
While it is clear that information and
communica-tion technologies can enhance a business’s
know-ledge system, it is important to recognise the
nature of knowledge-creation utilization and
transfer, and the need to augment technological
initiatives to secure competitive advantage An
‘over-whelming emphasis on IT and major gaps in the
treatment of people’ (Swan et al., 1999, p 264) in
knowledge management theorising and practice,
has been noted This ‘technological’ imperative is
captured in statements such as Cole-Gomolski’s
(1997) assertion that ‘the idea behind KM is to
stockpile knowledge and make it accessible to
others via a searchable application’ The KMC
studies of knowledge processes in SMEs have
confirmed that knowledge transfer is not a case
of linear information transfer but a process of
‘sense-making’ (Weick, 1990) with extensive effort
being needed to develop a ‘common stock of
knowledge’ (Kogut and Zander, 1992: 389) and
‘system of meaning’ (Trompenaars, 1995)
Know-ledge management implies an emphasis in
man-agement upon ‘management by perception’
(Sparrow, 1998: 12), i.e ongoing recognition of
the meaning and interpretation of events by
others
There is a wealth of evidence that shows that
people use their mental models of situations to
guide their decisions and actions (Sparrow, 1998;
Eden and Spender, 1998) At the strategic level,
Daniels et al (1994) demonstrated how
organiza-tions in general are ‘run’ in terms of managers’
models of the organization and its competition,
rather than any ‘objective’ notion of the location of
the business in its environment In the small firm,
the contribution of owner/manager cognition
towards business practices is even more
signifi-cant Sparrow and Bentley (2000), for example,
identified the impact of owner–manager personal
decision style (belief in control etc.) upon the risk
management practices adopted in their small
firms Sparrow and Goodman (2000) have shown
how the innovation process within networks of small firms may be affected by the models that owner–managers manifest in terms of trust, sup-port for innovation, task orientation and vision (i.e perceptions of team climate; Anderson and West, 1994) Individuals’ models of their own knowledge and the potential contribution of other knowledge have also been studied in SMEs (Lightfoot, 1996) The study highlighted the importance of recognis-ing the ways in which owners/managers ‘accom-plish’ (Munro, 1996) their resistance/rejection of outside knowledge The case study work on knowledge management in SMEs has highlighted the fundamental need to recognise the mental models that participants have, and the need to work towards means of eliciting and sharing personal understanding in the identification and development of process and knowledge system developments
A revised knowledge system in a small firm cannot be a complete replacement of the models that participants have of issues and situations A system that informs a business about strategic options to collaborate (on the basis of a competi-tive intelligence system) needs to provide informa-tion in the terms of the ‘model’ of the industry and competition that an owner and managers have, rather than constitute some attempt to present its own conception of the issues Knowledge systems
in small firms need to amplify human potential (Chattell, 1998) It is also important to maintain the
‘fit’ of any knowledge system with the models of individuals in a second manner The release of the potential of new developments can only be secured if the potential is appreciated and is realizable by those involved Putting the notion of knowledge at the centre of a person’s thinking entails more than exposing them to a revised knowledge system It is also far more than attempting to address loose notions such as the
‘cultural mismatch’ of a technology (e.g Allen, 1977) It involves ongoing assessment of the understanding of individuals and support for development of that understanding The fit of a knowledge philosophy and knowledge practices within an individual’s practice is critical The degree to which a collective mind (Weick and Roberts, 1993) operates within a ‘community of practice’ (Hendry et al., 1995) will determine overall effectiveness Knowledge management requires an appreciation of individual and collec-tive understanding
Knowledge bases and knowledge systems Developments in KM in smaller businesses have to stem more from a fundamental conceptual grasp
Figure 1 Four components of knowledge management in
SMEs
Trang 4of the role of knowledge in business and the basic
principles of a knowledge system This is in
contrast to initiatives in larger firms which may
be part of a tradition to make substantial
invest-ments in information technology on the basis of
the influence of internal technical specialists (to
some extent on the basis of their own ‘sectional’
interests; Eason, 1988: 204) In larger organizations,
the contribution of the latest ‘generation’ of
soft-ware/hardware is interpreted in terms of specific
contrasts with the current information
manage-ment system The particular ‘technical’ advances
are seen in terms of the enhancements they
provide to the current technology Knowledge
management in smaller firms has to be seen first
as a (significant) concept with implications for the
current business systems (both human and
com-puter-based) The added value of an investment in
computerization has to be demonstrated above
and beyond other (cheaper and more grounded)
changes to business practices Many of the features
of knowledge systems in larger firms can only be
achieved through use of and information and
communication technology approach This is
often because the bureaucratic features of larger
firms (fractionation of work, complexity,
anonym-ity etc.) require a technology for their mitigation
The broad principles with which a knowledge
system can be considered can provide a useful tool
for enhancing organizational systems and practices
in small firms A consideration of the strengths
and limitations of the current ‘system’ means that
the particular contribution that ICT can make is
appreciated (and considered from a business
benefits perspective) This is in contrast to
devel-opments premised on a general technological
belief Figure 2 details the principles of knowledge
systems that can be used to guide the evaluation of current knowledge systems and practices in SMEs
It has been noted how many of the features of knowledge management software developments in larger businesses may be a reflection of features of large firms per se, rather than generic knowledge management requirements The technological emphasis in large firm and SME knowledge systems differs In the main, large firm KM products place their primary emphasis upon the means to get information to users (as opposed to the contribution of the utilization of information) The emphasis on these two considerations is different in SMEs The work of the KMC team has revealed the value of supporting SME owners, managers and employees to view their business in knowledge terms It is the facilitation of this conceptual process that has proved to be the most central feature of the KM approach that the team has evolved The emphasis on the develop-ment of knowledge as a lens (as opposed to a knowledge management system) together with the emphasis upon knowledge system principles (as opposed to ICT knowledge system elements) represents a fundamental difference between knowledge projects in large and small firms
The integrated and contextualized action needed for knowledge projects in SMEs
Effective enhancement of knowledge management capabilities in a small firm has to recognize a number of key features of small firms
Scarbrough (1996) identified a potential tension within larger organizations between the human resource function and IT function in designing and executing a knowledge project in businesses The properties of knowledge systems can reflect the
Figure 2 Principles of knowledge system that can be explored with SMEs
Trang 5relative influence of particular ‘sectional’ interests.
The important role that participants play in
deal-ing with the unanticipated (emergent) features of a
knowledge project have also been reported
(Orli-kowski, 1996) There is a general recognition of a
need for greater involvement of top management
in knowledge projects (Kennedy, 2000) The
shap-ing role of functional ‘expert’ change agents is,
however, less apparent in SMEs The centrality of a
managing director and managers in SME knowledge
projects is most evident The role of top
manage-ment in SME knowledge projects may account for
the higher emphasis upon strategic impact both in
the initial consideration of a KM initiative and in
the response to emergent features of a knowledge
project
The ‘articulation of the knowledge base’
(Chat-tell, 1998: 150) through the development of a
formal organization system for knowledge
identifica-tion, definition and evaluaidentifica-tion, as an approach to
knowledge management, it rooted in the
philoso-phy of predictability, measurement and control
An alternative philosophy might place less
empha-sis on the decontextualization of knowledge
through its description and measurement, and
more upon chaos theory (Stacey, 1992) notions of
a self-correcting, flexible and dynamic knowledge
process through which the business secures its
adaptivity There is evidence to suggest that this
is a characteristic of management approaches in
small firms The instability of the business in the
light of the volatility of its business environment
may place a premium upon adaptivity rather
than predictability and more rigid configuration
(Smallbone et al., 1992)
The overwhelming majority of the reported
implementations in knowledge management in
larger firms concern operational developments
Strategic implications of knowledge/capability
have been considered less in empirical terms and
more as economic and management debates Two
aspects of strategic implications for knowledge
projects that have been highlighted are strategic
vulnerability (e.g Hall and Andriani, 1999) and
strategic capability (e.g Bowander and Miyake,
1999) A method to identify and evaluate a firm’s
capabilities for competitive advantage has also
been presented (Birchall and Tovstiga, 1999)
More recently, the theoretical dangers of a
‘blin-kered’ knowledge management system have been
highlighted (e.g Malhotra, 2000) and the need for
maintaining an uncertainty capability in business
seems clear In other contexts, it has been shown
that entrepreneurs’ mental models of their
businesses integrate strategic and operational
considerations and consider the retention of
‘man-oeuvrability’ (Sparrow and Bentley, 2000) The need for recognition of and education for uncer-tainty has been highlighted in earlier work by a member of the KMC team (Boyd and Wild, 1993; Boyd and Robson, 1996) Recognition of uncer-tainty and the value of an adaptive capability appear to be best secured through a group process that explores the value of diversity and creative abrasion in group decision making Knowledge projects that adopt a grounded process consulta-tion approach by their very nature enable groups
to consider their own practices and identify positive features Means by which a team can avoid the ‘blinkered’ perceptions that a rigid knowledge system might invoke, include compre-hensive and effective learning processes The role
of people external to a business in enhancing a small business’s learning have been considered by
a member of the KMC team previously (Harding, presentation to the 19th ISBA National Small Firms Research and Policy Conference, Birmingham, 1996) and form part of his ongoing research Overall, work within case study SMEs on know-ledge management has shown how knowknow-ledge projects are formulated and implemented within
an integrated framework that manages the impact of knowledge projects in operational, strategic and uncertainty management terms Figure 3 sum-marizes these levels of impact
It has been noted how knowledge projects in small firms may be provoked by pressure from external influences It has also been noted how the vulnerability of SMEs may provoke them to ensure that their ability to adapt is retained The defini-tion of roles in reladefini-tion to external ‘co-producers’
in SME is more negotiable than the offerings of larger businesses In considering knowledge pro-jects, large businesses place the primary emphasis upon their internal knowledge flows Significantly lower consideration is given to the negotiation of external boundaries (and core capability) In com-parison, SMEs place relatively lower emphasis upon the internal aspects of knowledge and greater emphasis upon external aspects
KM projects have differed in the ‘level of knowledge analysis’ (Braganza et al., 1999) that they have adopted Projects can focus on the
Figure 3 The three levels of impact of knowledge projects in
SMEs
Trang 6individual (Fahey and Prusak, 1998), group or
team (Leonard and Sensiper, 1998; Huber, 1999),
business process (Braganza et al., 1999),
organiza-tion funcorganiza-tion (Davenport and Klahr, 1998),
organi-zation (Teece, 1998; Bowander and Miyake, 1999;
Tidd and Taurins, 1999), joint venture and other
inter-organizational collaboration (Fairhead, 1998;
Rura-Polley and Clegg, 1999) network (Marceau,
1999), industry/cluster (Leonard-Barton, 1995;
Mitra, 1999; Park and Kim, 1999) or nation
(Porter, 1998) level There seems to be an increased
emphasis upon individual considerations,
signifi-cantly more emphasis upon one-to-one business
collaboration, network and industry/cluster
con-siderations in SME knowledge projects, and the
boundaries between many of these different levels
of knowledge analysis need to be more fluid in
SME knowledge projects
Bureaucratic forms of organization seek to
fractionate and proceduralize working practices
It is not surprising therefore that knowledge
projects in larger firms have tended to emphasize
the conscious technical (semantic) knowledge
asso-ciated with good practice in the execution of
particular procedures Even within large-company
contexts, knowledge system developers have
found that the information of the form that
constitutes ‘manuals’ is not sufficient to secure
effective ‘transfer’ of knowledge between users
The strict ‘logic’ and ‘theory’ of how to carry out
tasks may not be the most appropriate thing to
transfer Experience is often retained in human
memory as ‘episodes’ (i.e specific case-based
information) Knowledge systems in large firms
sometimes seek therefore to capture and convey
‘lessons learned’ from case experience The
‘tech-nologies’ that support the transfer of knowledge
have addressed users’ knowledge of where
exper-tise resides (i.e who knows what) together with
means to access ‘document-’ and ‘experience-’
based accounts There has also been recognition
that subconscious knowledge (in the form of skills
and tacit feel) figures in human performance but
this has been dealt with in the belief that
‘provid-ing access to people with tacit knowledge is more
efficient than trying to capture and codify that
knowledge’ (Davenport and Prusak, 1998: 72)
Systems that enhance meta-knowledge (i.e a
team’s knowledge of who knows what) have
been substituted for systems that support the
access and transfer of less conscious knowledge
The work of the KMC team has established the
fundamental role that subconscious (skill and tacit
feel) and even unconscious (e.g personality,
decision style etc.) facets of knowledge play in
SME decisions and action Knowledge transfer is
not dealt with adequately by hoping that expertise will transfer because participants are in close and frequent proximity A central theme in the KMC team’s work has been the appreciation of the need
to facilitate the elicitation and sharing of less immedi-ately conscious information within a workgroup or business if more effective knowledge systems are
to be developed in SMEs
In addition to distinguishing between levels of consciousness of different facets of knowledge, Sparrow (1998) has drawn a distinction between thinking processes that emphasize reasoning, creativity and mood There is evidence to suggest that ‘bureaucratic’ organization constructs ‘local discourse’ (Antaki, 1994) that seeks to limit decisions and action to more ‘rational’ territory (Albrow, 1997) The contribution of affect and imagination in small group settings is, however, well established The potential distortion of orga-nizational practices that an attempt to bring about
an ‘unbalanced’ and ‘disproportionate’ increase upon ‘rationality’ could bring in a small firm setting needs to be recognized (e.g Berry and Perren, 1998) Important interrelationships bet-ween motivation (empowerment), creativity and knowledge capture have been highlighted by Paper and Johnson (1997) within project teams in large organizations SMEs may be benefiting from
an appropriate combination of these factors Efforts that ‘destabilize’ this may be dysfunctional Couger (1996) has suggested that work environ-ments structured to relatively larger degrees around information systems may impede creativ-ity In a similar way, energy and enthusiasm (and other affects) that can accompany spontaneous informal human collaboration may be sacrificed in
a quest to emphasize ‘measured’ and ‘systematic’ analyses (Sparrow, in press) The approach adopted by the KMC team seeks to ensure that the potential ‘climate’ of knowledge utilization (in creativity and affect terms) that an SME team develop is considered in their design of a revised knowledge system
A feature of decision making that has been found repeatedly in studies of small firms’ prac-tices is holism Management in a small firm involves recognition of the ongoing dynamics of
‘all the resources of the business towards the aim of satisfying customer needs’ (Burns, 1989: 36) Knowledge projects in larger firms have ‘segmen-ted’ knowledge in ways that may not be appro-priate in small firm settings Matusik and Hill (1998), for example, distinguished between ‘com-ponent’ knowledge and ‘architectural’ knowledge The latter relates to organization-wide routines for coordinating the components of the organization
Trang 7Smart et al (1999) considered the knowledge
associated with four ‘process levels’ and where it
might be ‘located’ within an organization It has
been suggested that knowledge projects need to
define the critical knowledge at a particular
‘information leverage point’ (Applehans et al.,
1999) quite narrowly In the less fractionated
environment of an SME, knowledge of both kinds
(and all levels) may figure in decisions and actions
Knowledge projects are more likely to be of
limited value therefore, in an SME setting, if they
are defined too tightly
The cost of a comprehensive bespoke ICT-based
knowledge management system may not be
justi-fied by an SME in added value terms There are a
number of options available for SMEs ‘Modular’
approaches that are scalable and that can be used
to address particular facets of knowledge
utiliza-tion may be more appropriate In particular,
systems that enhance business processes
(work-flow etc.) can be a useful avenue The knowledge
capability of standard server software is evolving
very rapidly (e.g Windows 2000) The options
within such software may remove many of the
cost and learning curve barriers to ITC adoption in
SMEs It is not cost and learning alone, however,
that limit the contribution of ICT to knowledge
utilization in SMEs As noted throughout this
paper, the nature of knowledge processes in small
firms is not supported well by current and
prospective ICT developments
An area of knowledge management that has
received attention in large company contexts is
management of the intellectual property rights
portfolio (e.g Cook, 1995) The issue has also been
examined in SME settings (Kuratko and Hodgetts,
1988; Kitching, 1998) KMC work within SMEs has
identified that it is the issues that surround the
capture and utilization of specific intellectual property
rights rather than portfolio management that create
the greatest difficulty
The movements within intellectual capital (e.g
human, structural etc.) within SMEs reflect
differ-ent ‘investmdiffer-ent’ decisions Some of these
move-ments may be planned whilst others may be
provoked by significant changes (e.g ownership
succession) KMC research has identified a
valu-able role for an intellectual capital valuation lens
upon managing the (re)embedding of capability in
an SME in the light of owner succession (Martin,
presentation to the Staff Seminar Institute for
Manufacturing, University of Cambridge, 1999)
Overall, it seems clear that the small firm
knowledge setting is different from that within
larger firms
Knowledge and organizational learning processes in SMEs
Swan et al (1999) argued that there is a need to harness ‘the intellectual and social capital of individuals in order to improve organizational learning capabilities’ (p.264) Nonaka and Takeu-chi (1995) highlighted the role of learning in knowledge creation Boisot (1995) considered the relationship between the technological strategies of firms and learning He showed how an emphasis upon the ‘social learning cycle’ (p.257) in the strategies of firms could enhance competitiveness
in an alternative way to knowledge protection In working with SMEs the difficulties that they face
in these regards have become apparent Attempts
to ‘protect’ their knowledge through patents are problematic because of the demands of securing and policing patents Owner–managers attempt other means to limit the diffusion of their exper-tise They may deliberately avoid training and development opportunities for others with regard
to certain aspects of their own personal expertise SMEs find difficulty in elaborating upon their contribution to make it less codifiable, particularly where the processes they operate are quite simple and proceduralized The issues surrounding growth of markets and commensurate manage-ment of growth of the firm in order to secure the economies of scale that can preserve a competitive position have been acknowledged for many years (e.g Barber et al., 1989) The alternative approach towards maintaining competitiveness that Boisot (1995) identified is based upon the learning capability of a firm If it can absorb and scan diffused knowledge and codified knowledge and translate it into a specific capability of its own, then protection and elaboration become less rele-vant The key issues are problem solving, diffu-sion, absorption and scanning For an SME to manage its knowledge assets in this way requires
it to have an effective organizational ‘learning’ capability The significance of organizational learn-ing for competitive advantage was highlighted by Moingeon and Edmondson (1996) It is clear that the knowledge (and potential advantage) that a small firm may have can only be sustained if it is supported by effective organizational learning processes Unless there is a constant renewal of knowledge, then any advantage will be transitory The linkages between individual action and beliefs, and organizational action (and perceived impact) were considered initially by March and Olsen (1975) They identified four possible breaks (disconnects) in these learning loops The potential for learning is impeded in a situation of role-constrained learning because the action of an
Trang 8individual to act in a way consistent with their
knowledge is restricted The potential for learning
under a situation of audience learning is limited
by virtue of the ‘misreading’ of others’ actions
(and learning by others ‘observing’ (but not fully
sharing the interpretation of) an experience)
Superstitious learning occurs when an
organiza-tion takes acorganiza-tion on the basis of ‘faith’ and does
not subject actions to a monitoring of impact upon
its environment Finally, learning under ambiguity
occurs where the impact of changes upon an
organization’s environment cannot readily be
attributed to specific actions Kim (1993) drew
attention to a further set of three loops (and
disconnects) in the organizational learning process
Situated learning occurs when an individual’s
actions are not reflected upon (and the potential
for learning beyond the specific situation is lost)
Fragmented learning occurs when the
understand-ing that an individual derives from experience is
not shared within the organization Opportunistic
learning is held to occur when an organization
takes action that is known not to fit with the
shared understanding in the organization In
reconceptualizing the learning disconnects
occur-ring at the action, experience and reflection phases
of a learning cycle, and extending the notion of
organizational learning loops to a business’s
posi-tion within its business environment, Sparrow et al
(1998) highlighted a further set of three loops
Actions by ‘sections’ of an organization that are
‘inconsistent’ with the action of other sections can
result in ‘uncoordinated action’ An organization’s
inability to manoeuvre (act) in its industry/
network/cluster (i.e ‘organization
position-constrained learning’) can restrict its learning
opportunities The opportunities for a business to
reflect upon the experiences of others in its
industry/network/cluster can be affected by
‘iso-lation-constrained learning’ The study also
con-firmed the centrality of all the forms of learning
loops in the maintenance and development of
capability in small firms Figure 4 highlights the
learning loop ‘disconnects’ that have been
identi-fied and explored with SMEs
A MODEL FOR THE DEVELOPMENT OF
KNOWLEDGE MANAGEMENT PRACTICES
IN SMES
A model of considerations
An emergent model of approaches towards
devel-oping knowledge management practices in SMEs
is being derived from the experiences of SMEs
The model involves all four of the components of knowledge management that have been detailed above (Figure 1) The model also recognizes the operational, strategic and uncertainty management considerations of knowledge in SMEs (Figure 3) The model has as its most central tenet, the assertion that knowledge management develop-ment in SMEs needs to be supported through a process that recognizes and incorporates the current thinking and priorities in the knowledge project It seems inappropriate to ‘hijack’ the agendas and momentum in a business and attempt to ‘railroad in’ a knowledge system (in particular, a ‘standard’ complete ICT-based system) The experiences with SMEs suggest that the focus for initial incremental developments can emerge from exploratory work with MDs and (senior) managers as they are supported to consider their business practices through a knowledge lens The role of a facilitator seems central to the process The importance of ownership and the ultimate objective for an SME team to develop its own capability to sense needs for development appear to be secured well through a process consultation approach (Schein, 1999; Shelton, 2000) SME knowledge projects can take many months Contact with the ‘appropriate’ individuals and groups at particular phases of the developments needs to be maintained Contact in the order of one half-day every week to ten days over a period of 6 to 12 months appears to be the average level of support required
The model of SME knowledge management development also recognizes that knowledge projects in SMEs ‘track’ through three sets of procedures These are technological/systems development procedures, business development procedures and organizational development pro-cedures These sets of procedures are summarized
in Figure 5 Knowledge projects may place differ-ent emphases upon these three sets of procedures but successful projects will address all three sets of procedures to some extent
The overall model that can be used to guide knowledge projects in SMEs is therefore a com-bination of Figures 1, 3 and 5 It is presented as Figure 6
Phases in knowledge projects in small firms The model of considerations captures the range of considerations that may need to be addressed in knowledge projects in small firms The emphasis placed upon any particular cell within the model will vary with the particular knowledge project It will also vary with the phase or stage of the knowledge project Knowledge projects within
Trang 9SMEs progress through several phases The
facil-itator may find that the participants wish to place
more (or less) emphasis upon a particular set of
procedures at a particular juncture, but may
attempt to assist the group to consider the parallel
issues (associated with the alternative sets of
procedures) at that time The considerations and
phases indicated in Figure 7 represent the initial
attempt to discern some pattern in the ‘tracks’ that
SME knowledge projects take It should be
recog-nized, however, that specific case study businesses
have on occasion not addressed a specific aspect/
procedure at the ‘time’ indicated in the figure In
such instances there has tended to be a feeling by
the facilitator that a particular feature of the KM
development process is ‘missing’
An examination of Figure 7 reveals that there are
elements of structured measurement and
assess-ment together with inductive (qualitative) eleassess-ments
The experiences with SMEs would suggest that a
‘battery’ of formal measurement and assessment
techniques for each procedural aspect would not
be an appropriate approach On the contrary,
experience would suggest that participants may
wish to share in more ‘natural’ (though informed) qualitative analyses and interpretations of their practices and processes and work their way towards complementary systematic techniques Conversely, decisions to engage in more formal assessments quite early in the development pro-cess may result in participants wishing to ‘flesh out’ the interpretation with ‘specific’ and ‘actual’ examples and considerations
Phase 1 can accommodate structured and quali-tative elements It has been noted how structured consideration of strategic options can be useful An alternative qualitative approach that entailed a
‘reading’ of the current business plan for ‘know-ledge’ considerations has also proved useful Choice of an initial aspect of business process for knowledge development can be made on the basis
of systematic and comprehensive analysis of pressing business conditions and centrality of a business process Alternatively, the choice of project can be the product of a discussion among MDs and managers Similarly, analysis of indivi-dual perceptions and team process characteristics can be derived from close interpretation of
tran-Figure 4 Learning loops and potential ‘disconnects’
Figure 5 The three sets of procedures in knowledge projects in SMEs
Trang 10scripts of interviews and group meetings or from
more structured approaches including repertory
grid procedure, psychometric testing (e.g MBTI)
and questionnaire assessment (e.g Team Climate
Inventory)
Phase 2 can involve formal structured analysis
through attempts to value facets of intellectual
capital It can also benefit from a less quantitative
‘visualization’ of the business in intellectual capital
terms as a rhetorical device The KMC team is
exploring the role of an ‘audit’ of knowledge
management practices The tool that has been
developed to date fits quite neatly into the toolkit
that UK business advisers have of health-checks,
benchmarking tools and audits Initial experience
with the approach would also suggest that it can
serve as a basic ‘orienting’ agenda for an
intro-ductory awareness-raising discussion The KMC
team have extensive experience of both ‘live’
facilitation of reflection on group process in
addition to asynchronous computer supported
qualitative data analysis of verbal and written
materials Both of these sets of skills appear to be
of value in the support process This may raise training and development issues for more extensive (national) support of SMEs using this model
Phase 3’s inclusion of business process analysis can again be operationalized in tight ‘systems’ terms or less ‘rigorously’ The visual depiction of processes (using tools such as maps, flow dia-grams etc.) appears to be valuable The sharing of perceptions has been found to work well when supported by ‘models’ of the ‘causal maps’ that different individuals appear to have The consid-eration of learning processes can benefit from the systematic exploration of the extent to which different learning ‘sources’ (e.g customers, best practice networks, suppliers, Internet, universities etc as detailed in the knowledge management audit tool) are utilized, together with reflection upon any ‘disconnects’ in any of the learning loops (as detailed in Figure 4)
The more precise linking of knowledge (and supporting structure, systems, culture, incentives and broad uncertainty capability) to business
Figure 6 A model to guide knowledge projects in small firms