The Effect of Knowledge Selection on Organizations- 123docz.net

Since knowledge is “that which is lost unless deliberately maintained”, it is cultivated and used for business by members of organizations. If there is no merit in belonging to an organization, there is no point in forming one for members who possess knowledge.

Table 13 shows the merits that members of organizations (called

“employees” hereafter) usually expect from “organizations”.

On the other hand, as the conditions for offering those merits to their employees, “organizations” expect employees to possess either the knowledge necessary for their business or the ability to acquire it.

Therefore, conditions for employees to belong to organizations can be illustrated as in Table 14.

Having employees who satisfy those conditions facilitates the development of corporate enterprises, and belonging to organizations which provide these requirements gives security to employees’ lives.

Organizations consist of more than just employees. For example, the stakeholders of an organization such as stockholders, suppliers

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48 Knowledge Management and Risk Strategies

Table 13: Expectations of Employees from Organizations

Types of Merits Content

Providing livelihood Organizations provide employees with ﬁnancial security, based on knowledge that employees possess

Providing opportunities of knowledge transfer

Organizations provide employees with opportunities for acquiring know knowledge (time, money, and

knowledge transfer systems) Providing opportunities

of knowledge usage

Organizations provide employees with opportunities for using knowledge

Table 14: Expectations of Organizations from Employees

Types of Merits Content

Practice of knowledge Employees provide organizations with knowledge necessary for business

and customers can be named as factors concerning the organization.

From the viewpoint of the organizational equilibrium theory, organizations are understood to exist only when they are able to maintain relationships among these factors and remain proﬁtable (“merits from participating in the organization” minus “contribution to the organization”). This sounds reasonable enough. Each factor continues to have a relationship with the organization because it gives them some beneﬁts. Hence, it can be deduced that the “continuance of organizations through knowledge selection” is equal to “maintenance of the (merits − contribution > 0) inequality in the process of new knowledge selection”.

Figure 17 is a simpliﬁed chart of balance in organizations. In which factor of the organization the maximum pressure is piled on in knowledge selection depends on who has taken the initiative in the decision making.

For example, if the owner (stockholder) of an organization had taken the initiative, he would prompt the organization to adjust its business so that he could secure a return on investment at a certain

The Impact of Knowledge Selection 49

Organization Owner of the

organization

Members

Supplier Consumers

Dividends, etc.

Capital

Price

Product/service Labor

Wage Price

Material

Figure 17: Diagram of Organizational Equilibrium

rate. When there is a change in the business, its products will be changed, and the knowledge required will be different. These would be sourced inside and outside the organization. If the employees could not gain new knowledge, they would have to be replaced. The organization would need a new supplier for new products, too. The new market would bring new customers.

On the other hand, if employees showed the initiative, they would focus on the security of their jobs and the duties required of them.

It would be highly unlikely that organizations would acquire new knowledge at a speed beyond the employees’ ability to learn it. Since the owners bear the cost of training, their share of proﬁt would be reduced. Owners of organizations that are not producing enough proﬁt might sell their stock.

If suppliers or customers showed the initiative, they would refuse choices that supplanted existing products, by preferring their own products or ones that suited their tastes.

Wherever the pressure is, depending on who has taken the initiative in the organization, knowledge selection disturbs the equilibrium within the organization. It also has the impact of undermining the existing business model. Knowledge selection disrupts the continuity of organizations.

50 Knowledge Management and Risk Strategies

The Effect of Knowledge Selection on Organizations

Examples of Knowledge Transfer Cost

Occurrence of Knowledge Selection Opportunities