Knowledge Management

Conceptual Overview

As this definition indicates, the theory and practice of KM encompasses multiple levels of analysis, ranging from overall organizational strategies through the development of different tools and ways of representing knowledge, to more microlevel practices of management. Equally, knowledge may be constituted as a resource in a variety of different ways—including a legally defined form of intellectual property, an accounting-based intangible asset, and valued lessons for practice. As such, KM is really an umbrella term to designate a number of different strands of managerial activity that seek to improve firms' exploitation of knowledge. These include strategies for managing knowledge-based organizations, for representing knowledge assets or “intellectual capital” in accounting, and for capturing and distributing organizational learning.

Although some authors claim that KM is a timeless activity—that organizations have always done it—it is clear that the self-conscious attempt to exploit knowledge in this way is a relatively recent phenomenon. Many of the conceptual foundations were laid by a small group of writers in the early 1990s. This group included Ikujiro Nonaka, whose work has been especially influential as a way of explaining the conversion of the tacit knowledge of organization members into the explicit form, which can be widely applied by the organization. The notion of tacit knowledge was originally developed by the philosopher Michael Polanyi to highlight the importance of knowledge that cannot be easily verbalized—as Polanyi, put it, “we know more than we can say.” The distinction between tacit and explicit knowledge is often equated with the difference between “know-how” and “know-what.” [Page 759]Thus the classic example of tacit knowledge, as described by Polanyi, is knowing how to ride a bike.

Drawing on this account, Nonaka describes four stages of knowledge creation that he terms internalization (explicit to tacit), socialization (tacit to tacit), externalization (tacit to explicit), and combination(explicit to explicit). Nonaka argued that this cycle was central to the process of innovation within firms and applied it to analyzing the development of a new bread-making machine. The (re)discovery of tacit knowledge and its practical application to innovation did much to spark initial interest in KM. It seemed to offer businesspeople a new, hitherto hidden resource to be mined and exploited and gave academics a new focus for theoretical debates.

A further contribution to the debate on KM came from writers in the organization studies field who were not so much concerned with the functional outputs of knowledge, as with the diverse sources of knowledge within organizational settings. An important influence here was the work of Frank Blackler, who drew on a range of sociological studies to identify five different types of knowledge. These he termed embrained (conceptual skills and cognitive abilities), embodied (action oriented and only partly explicit), encultured (shared understanding through the development of an organizational culture), embedded (resides in systemic routines) and encoded (information conveyed by signs and symbols) knowledge. This and similar taxonomies extended the debate around organizational knowledge, but also implicitly extended the scope and opportunities for KM by highlighting new arenas for exploitation.

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