Class 2002B












Review of the Literature

Knowledge management is a key concept in today’s business world.  Evidence of this fact is apparent if one only peruses the current business, management, and organization literature.  On the surface, it looks as if knowledge management just appeared toward the end of the 1990’s.  Some regard knowledge management as a business fad or craze (Swan, Newell, Scarbrough, and Hislop, 1999, p. 275), but a closer examination of the concept reveals that there has been considerable thought and research into it, and many of the world’s most successful corporations, businesses, and organizations are investing considerable resources in this enterprise (Alvesson and Karreman, 2001, p. 995).  Prusak (1999) estimates that approximately 80% of the Global 1000 businesses are conducting knowledge projects, and that “approximately 68% of the Fortune 1000 have defined knowledge projects underway.  Attendance at knowledge conferences…has reached over 10,000 in the U.S. alone.  There are at least six knowledge management newsletters, one fully developed knowledge management magazine” (p. 3).

            Many of the practices set up in organizations can be broadly construed as contributing to the knowledge agenda.  These knowledge projects range from setting up an intranet, using Lotus Notes or other team-oriented software, creating personal development plans, mentoring, or sharing information on best practices.  Increasingly, organizations are creating specific initiatives or programs with a knowledge focus.  Knowledge teams and knowledge leaders are emerging, but very few organizations are applying knowledge management throughout their organizations (Skyrme, 1999, p. 109). 

            Why are businesses and organizations devoting considerable money, time, and effort into knowledge management projects?  The answer is they want to survive.  McCampbell, Clare, and Glitters (1999) maintain that in an economy of uncertainty, the only sure source of lasting competitive advantage is knowledge.  “Successful companies are those that consistently create new knowledge, disseminate it widely throughout the organization, and quickly embody it in new technologies and products” (p. 172).  They argue that the new business environment is characterized by radical and discontinuous change.  The environment requires organization members to anticipate changes and carry out a faster cycle of knowledge creation and action based on the new knowledge (McCampbell et al., 1999, p. 173). 

            The McCampbell et al. characterization of the business world is also true for society at large (1999).  Operating any organization in the information age is a challenge made more difficult by the instantaneous nature of the flow of information.  Drucker (1993) calls our world a post-capitalist society, and in his writing about the economic, political, and social transformation’s taking place, he identifies a primary characteristic and resource – knowledge (pp. 4-8).  The post-capitalist society differs from past eras in how knowledge is applied.  In the early part of the 20th Century, the industrial revolution applied knowledge to the use of tools, processes and products.  The productivity revolution began when people applied knowledge to human behavior.  Post-capitalist society is characterized by the fact that knowledge is being applied to knowledge itself (Uit Beijerse, 1999, p. 96). 

As Skyrme and Amidon (1999) write, “the knowledge agenda is new, yet not new”

(p. 108).  Most organizations are already involved in managing knowledge and have been for a long time.  Many of them, however, do not realize the full extent of what they are undertaking.  The purpose of this paper is to provide an overview of the concept of knowledge management, identify key terms and concepts related to knowledge management, trace the history of the study of knowledge management, and explain the major areas of study and thought related to the phenomenon.

Defining Knowledge Management

While there are many organizations undertaking knowledge management projects, there is dispute over what exactly knowledge management is.  Some in the field define knowledge management simply as information that has value for action, but others, like Snowden (1999), maintain that knowledge management is not that simple.  He writes that it is the “identification, optimization, and active management of intellectual assets, either in the form of explicit knowledge held in artifacts or as trait knowledge possessed by individuals or communities”

(p. 63).  Swan et al. (1999) explain that knowledge management is about harnessing the “intellectual and social capital of individuals in order to improve organizational learning capabilities, recognizing that knowledge, and not simply information, is the primary source of an organization’s innovative potential” (p. 264).

            One cannot get a clear picture of knowledge management without studying the concepts of knowledge and information and other related terms.  Much of the confusion that surrounds knowledge management is due to scholars’ varied opinions on distinguishing knowledge from information.  The misconception that the two terms are interchangeable can have disastrous effects in the business world.   “The confusion between knowledge and information has caused managers to sink billions of dollars in information technology ventures that have yielded marginal results” (McCampbell et al., 1999, p. 172).   Snowden (1999) claims that it is not necessary to define knowledge, but points out that it is important to distinguish it from information (p. 52).  Other researchers find it necessary to have a thorough understanding of all elements that make up knowledge management.  Davenport, De Long, and Beers (1999) claim that knowledge “is information combined with experience, context, interpretation, and reflection” (p. 89).  Prusak (1999) describes knowledge as a human trait or attribute (p. 4), distinguishing it from information in that only a human can obtain knowledge.  For example, a bookshelf can contain many volumes of books on a particular subject.  It can be said that the bookshelf contains a lot of information, but one cannot claim that the bookshelf is knowledgeable.  Sveiby (1999) carries the definition a little farther by describing it as an activity and a “process of knowing” (p. 20).  The term activity brings up the notion of action, which Nurmi (1999) mentions in his definition of knowledge:

            Knowledge is something that is acted upon, that has an effect on the way things

            are.  We are not interested in information that lies passive on shelves, in files, or

            in archives.  A knowledge business is created when the know-how inside the firm

and the needs of customers outside the firm meet (p. 168).

Nurmi’s definition brings up the notion of know-how, which is akin to the deeper type of knowledge characterized by Ikujiro Nonaka, a business management expert and scholar from Japan.  Nonaka (1994) writes that information is a “flow of messages, while knowledge is created and organized by the very flow of information, anchored on the commitment and beliefs of its holder” (p. 15).  He also maintains the most important element in knowledge is action. 

Nonaka and Konno (1999) categorize knowledge as either explicit or tacit.  Explicit knowledge can be thought of as knowledge that can be expressed in terms of words and numbers.  It can be shared in the form of data.  Tacit knowledge, on the other hand, is highly personal, hard to formalize, and difficult to communicate (p. 39).  Much of Nonaka’s work is based upon the knowledge theories of Polyani (1966), who first came up with the idea of tacit knowledge.  He declared that “we have examples of knowing, both of a more intellectual and more practical knowing” (p. 6).  One can also see the similarity between the intellectual knowing and Nurmi’s know-how mentioned in the paragraph above.  Polyani further states that the two aspects of knowing have a similar structure, and that neither is present without the other (p. 7).  His explanation of tacit knowledge, “we can know more than we can tell” (p. 4), is best illustrated by police identification techniques.  If an individual is trying to identify a criminal but cannot fully describe him, the police might use a data base of images of facial parts such as eyes, nose, and mouth.  They will then show those to the individual, who will pick through the choices until he arrives at something similar to the features of the criminal he remembers.  In other words, the individual knows the information; he just cannot relate it without that process.  This illustration not only points out what tacit knowledge is, it also demonstrates that tacit knowledge can be conveyed through some type of process.

Nonaka (1994) expands on Polyani’s notion of tacit knowledge by asserting that tacit information has both cognitive and technical elements.  Cognitive elements can be thought of as mental models in which people form models of the world.  They can manipulate these models to help define their world.  The technical element is know-how or skills that apply to a specific context (p. 16).  Snowden (1999) helps further clarify the concepts of tacit and explicit knowledge by relating how each particular type of knowledge is evoked.  He writes that “the optimization of explicit knowledge is achieved by the consolidation and making available of artifacts.  The optimization of tacit knowledge is achieved through the creation of communities to hold, share, and grow the tacit knowledge” (p. 63).

            While knowledge management scholars have spent considerable energy into debating and defining knowledge, much less is written on the term management. Alvesson and Karreman (2001) assert this is because most researchers believe that the idea of management is something that makes common sense.  There seems to be a general consensus among scholars that management involves planning, organizing, coordinating, and controlling work (p. 1001). 

History of Knowledge Management

The study of knowledge dates back to ancient Greece.  Even before that, knowledge was at least implicitly managed as people performed work.  Early hunters, for example learned the best skills and practices for a successful hunt.  These skills and techniques transferred from one generation to the next.  This illustrates the transfer of knowledge, a knowledge management activity.  (Wiig, 1997, p. 7). 

The actual study of knowledge management is much more recent. Like the study of communication, it has roots in many other areas of study—business, management, sociology, and economics to name just a few.  Drucker (1999) argues that knowledge management is based largely on the work of Frederick Winslow Taylor, who studied manual workers (p. 79).  During the 19th Century, economists argued about differences in the skill level of workers.  When considering productivity, they categorized workers as either hard workers or lazy workers.  Taylor did not agree with this line of thought and examined the inefficiencies in how workers performed their jobs.  He did this by recording motions necessary to accomplish the task and then eliminating unnecessary steps and then designing or redesigning tools, if necessary, to assist the worker in accomplishing his task.  Taylor found that the traditional tools were not always the best tools for the job, and he received input from the workers on what might work better.  Taylor pointed out that very little skill is involved in production.  He claimed that what makes workers productive is knowledge. (Drucker, 1999, pp. 79-81).  While the names for this emerging discipline have changed and the concepts and theories have evolved over the years from Taylor-Task Analysis to Task Management to Scientific Management to Industrial Engineering, Drucker argues that Taylor’s work is the foundation of knowledge management (p. 80).

Knowledge Conversion and Creation

            As explained previously in this review, explicit knowledge can be shared through communication and media, but that is difficult in the case of tacit knowledge.  Nevertheless, tacit knowledge can sometimes be communicated through shared understanding between individuals.  In other cases, tacit knowledge must be converted into explicit knowledge before it can be shared.   (Becerra-Fernandez and Sabherwal, 2001, p. 25).  In fact, Nonaka (1994) proposes that there are four modes of knowledge conversion:  from tacit knowledge to tacit knowledge, from explicit knowledge to explicit knowledge, from tacit to explicit, and from explicit to tacit.  In the first mode, tacit to tacit, knowledge can be converted through sharing and interaction between individuals.  The key to acquiring tacit knowledge is experience, since it is difficult for humans to convey or explain tacit knowledge.  An example of this is teaching a child to ride a bike.  While the adult can easily show the child how to ride, it is difficult for the adult to put the instructions into words.  Nonaka calls this mode socialization.

            The second mode of knowledge conversion, explicit to explicit, involves social interactions to reconfigure existing information through sorting, categorizing, adding and recontextualizing explicit knowledge.  Nonaka refers to this process as combination.  The third and fourth modes expand over time and through a process of mutual interaction between individuals.  Conversion of tacit knowledge to explicit is called externalization, and explicit knowledge to tacit is called internalization.    Nonaka refers to this as the SECI process, or Socialization, Externalization, Combination, Internalization process (Nonaka, 1994, pp. 17-19).

            Two main areas knowledge management practices focus on are the sharing of existing knowledge and the creation of new knowledge.  The creation of new knowledge often proves to be the most valuable practice in the long run (Skyrme and Amidon, 1999, p. 113).  The process of knowledge creation happens “with the transfer of what’s inside a person’s head (his or her tacit knowledge—thoughts, ideas, actions, and experiences melded with information) to another individual or group in such a way that the recipient’s future actions and decisions are influenced” (Bednar, 1999, p. 211).  Nonaka and Konno (1999) describe knowledge creation as a “spiraling process of interactions between explicit and tacit knowledge” (p. 39).



Figure 1 illustrates how the four nodes of knowledge form a continual cycle that is shaped by series of shifts between the different modes.  Nonaka and Konno (1999) maintain that there are various triggers that induce the shifts, such as interaction, dialogue, use of metaphors, or experimentation (pp. 39-42).  It is important to note that the movement through the four modes is not a circle, but rather a spiral.  This spiral becomes larger as it moves up the ontological levels from individual to group to organization through interorganization.

Figure 2 demonstrates the upward spiral of knowledge creation developed by Nonaka (1994).  He developed this in response to a common knowledge management paradigm that provided a static and passive view of the organizational knowledge agenda.  While it provided for knowledge processing, the model did not take into consideration what knowledge was created by the organization (p. 14).



Figure 2:  Nonaka’s Spiral of Science of Organizational Knowledge Creation

Nonaka (1994) has shown that the organization that deals with the changing environment not only processes information efficiently, it also creates new information (p. 14).  Nonaka’s contribution to the study of knowledge creation and management has served as a foundation for much of the research in this new discipline.

Other Related Concepts

            Closely related to knowledge management is organizational learning.  Levitt and March (1988) explain that experiential lessons in an organization are:

captured by routines in a way that makes the lessons, but not the history, accessible

to organizations and organizational members who have not themselves experienced

the history.  Routines are transmitted through socialization, education, imitation,

professionalization, personnel movement, mergers, and acquisitions.  They are

recorded in a collective memory that is often coherent but is sometimes jumbled,

that often endures but is sometimes lost (p. 320).

Organizational learning and knowledge management are heavily dependent on organizational memory, which emphasizes “the support of the human user by providing, maintaining, and distributing relevant information and knowledge” (Abecker, Bernardi, Hinkelmann, Kuhn, and Sintek, 1999, p. 186).  While organizational memory depends on the individual memories of organization members, the rules, procedures, beliefs, and cultures are preserved over time through socialization and control (Levitt and March, 1988, p. 321).  However, organizational memory should not be a passive information system, but must be an intelligent assistant to the user (Abecker et al., 1999, p. 186).  Abecker et al. (1999) created a model to show how organizational memory assists knowledge-management activities.  Figure 3 illustrates that organizational memory is at the center of all knowledge activities.  Short term knowledge efforts should concentrate on short term knowledge preservation, which is based mostly on tacit knowledge.  This can be facilitated through best practice data bases, lessons-learned archives, or expert systems.  In long-term efforts, organizational memory should support knowledge creation and organizational learning (p. 186).



Another term that is closely related to knowledge management is knowledge packaging.  “Knowledge packaging translates and structures information into usable knowledge” (Myers and Swanborg, 1999, p. 201).  This concept entails filtering, editing or organizing pieces of knowledge.  Knowledge packaging is important, because if the knowledge is not packaged in a manner that promotes easy use, organization members will not use it, and knowledge is less likely to be shared.  Myers and Swanborg (1999) identify six steps to ensure packaging of knowledge will be successful.  First is identifying knowledge.  In this step, one identifies specific topics or general domains and then finds knowledge that addresses those subjects.  The second step is to segment the audience.  This entails identifying target recipients for the knowledge and sorting them in groups by their respective needs.  The third step is to customize the content.  In this step, one selects relevant information from the knowledge base and tailors it with the appropriate level of detail for each segment.  Fourth is to choose the appropriate format, such as paper, electronic, video, or multimedia.  In the fifth step, one organizes the content.  In this step, one lays out the table of contents, index, or search engine.  Finally, the last step is to market-test the format and content.  In this step, one has a pilot group check the knowledge package for clarity, usability and overall value (pp. 202-203).

Technological Aspects of Knowledge Management.

            Many organizations rely heavily on computers, intranets, and the internet for knowledge packaging.  In fact, much of the credit for the widespread use of knowledge management theories and practices must go to the development of the worldwide web because the internet has made the world increasingly smaller in its short history.  The internet began in 1969 as a Pentagon-sponsored program called the Advanced Research Projects Agency (Albert and Bradley, 1997, p. 144).  It began as a loose confederation of interconnected computer networks to help military contractors share large sets of data.  By the early 1980’s, universities and research laboratories were using it as well.  With the transition from mainframe computers to personal computers in the mid to late 1980’s, businesses began to use the internet too.  By 1997, there were more than 35 million users (Albert and Bradley, 1997, p. 146).  The surge in information flow and connectivity has allowed individuals and organizations to share a great volume of information and knowledge in a manner that had never been possible. 

            Information technology has become a key in the implementation of knowledge management.  “IT’s role is emerging as an integrator of communications technology, rather than solely a keeper of information.  The critical role for IT lies in its ability to support communication, collaboration, and those searching for knowledge and information” (McCampbell et al., 1999, 178).  Information technology and the advent of the personal computer have greatly enhanced organizational effectiveness, interorganizational deployment, and cognitive advance (Grover and Davenport, 2001, p. 6).  Another area of communication that information technology has drastically impacted is social activity.  Computer networks provide a means to break down stovepipes, or hierarchical barriers, that often inhibit the flow of free thinking, knowledge, and innovation, or the creation of knowledge.

            There are, however, some difficulties caused by the use of information technology in knowledge management practices.  First of all, information technology leads to misconceptions about the differences between information and knowledge.  Organizations often store heavy loads of information or data and mistakenly think they are fostering the flow of knowledge.  “Quite a few of these projects include work focused on data warehousing, installation of Lotus Notes, building intranets and developing document and intellectual capital applications—all of which bear a definite but somewhat distant relationship to knowledge” (Prusak, 1999, pp. 3-4).  A second challenge occurs when organizations view knowledge work as done once the information technology application becomes technologically operational.  In reality, this is just the beginning of the knowledge project.  Constructing an information technology infrastructure for knowledge does not, in itself, guarantee that organization members will use the system.  Finally, some organizations rely too heavily on information technology and not enough on the social aspects of sharing knowledge.

            Swan et al. (1999) illustrate this point with a study they performed on two business firms which were each making an effort to capitalize on its organization’s knowledge.  Each firm had a central office with other offices spread out over a large geographic area.  One firm relied solely on information technology in establishing an intranet.  The company paid very little attention to the social networks of the organization and basically left it up to individual offices to create their own intranet and link to the others.  As a result, the firm created an incompatible series of individual intranets, and there was no evidence that the intranet had promoted any sharing of knowledge.  In contrast to the first firm, the second firm sought wide representation from the various sub-organizations and social networks in its organization.  The organization members created a system that met their needs and was easy for them to use.  Plus, the second firm’s intranet augmented already existing social networks.  This effort did result in knowledge sharing.  The mistake of the first firm was in not recognizing the need for creating shared understanding through networking and social coordination.

Social Aspect of Knowledge Management

            The example above leads to the importance of the social aspect of knowledge sharing to an organization’s knowledge management program.  It is important to remember that ideas form in the minds of individuals, and the interaction between individuals is a key to developing further ideas or knowledge.  “The tradition is that knowledge is transferred in a social context” (Sveiby, 1999, p. 25).  Examples of this are the language people speak or the tone in which they speak to another individual.  The social context often times dictates meaning.  Without face-to-face, social contact, some knowledge might not be shared because it can only be conveyed in person.    Skyrme and Amidon (1999) shed more light on this notion by explaining that knowledge management is not a systematic discipline and takes into consideration “people, management, and organizational culture as well as technology infrastructure.  In fact, our research shows that it is the approach to the human and organizational factors…that is the determining factor in achieving a successful outcome from a knowledge program” (p. 109).  Echeverri-Carroll (1999) found interorganizational social networking to be particularly beneficial for organizations.  Specifically, she discovered that “firms that establish partnership relationships involving frequent exchange of information…tend to develop products and processes faster than their competitors who do not establish these types of relationships” (p. 303).  Weik and Roberts (1993) go to great lengths to point out that organizations are collections of individuals, and therefore socially oriented.  In their study of flight deck operations, they use the term collective mind instead of the commonly-used term organizational mind to illustrate the point (p. 374).

In the short tradition of knowledge management practice, organizations typically address knowledge management from a social or technological point of view.  Managers tend to look at the management of knowledge from the point of view that employees are their best asset, whereas those who favor the technological approach deal with what information technology is needed to support knowledge management.  Abecker et al. (1999) found that “effective knowledge management requires a hybrid solution, one that involves both people and technology…our long term vision is a corporate or organizational memory, at the core of a learning organization, supporting sharing and reuse of individual and corporate knowledge”

(p. 185).

Knowledge Management Practices

Knowledge management is a concept rooted in practicality and chiefly used in the business world. According to Wiig (1997), people and organizations practice knowledge management to achieve two main objectives.  The first is to make the enterprise act as intelligently as possible to secure its viability and overall success.  The second objective is to gain understanding of the best value of knowledge assets (p. 8).   While the primary users of knowledge management reside in the corporate community, other organizations can benefit greatly from the practice.

Davenport et al. (1999, pp. 90-103) identify four types of knowledge management projects.  Creating knowledge repositories focuses on establishing databases or files of external knowledge, structured internal knowledge such as research reports, and informal internal knowledge like lessons learned.   The second type of project is improving knowledge access.  The third is to enhance the knowledge environment.  The final type of project is managing knowledge as an asset.

Skyrme and Amidon (1999) declare that any knowledge management project requires a “systematic and holistic view of the knowledge agenda” (p. 113).  This means the team undertaking the project must understand the strategic role of the knowledge they are managing, how that knowledge is linked to key management decisions and processes, and how to improve knowledge creation, sharing, and use.  Skyrme and Amidon (1999) point out seven critical factors to a successful knowledge management effort:

1.  Strong link to a business imperative.

2.  Compelling vision and architecture.

            3.  Knowledge leadership—the support of top management.

            4.  Knowledge-creating and sharing culture.

            5.  Continuous learning at all levels and among individuals and teams.

6.  Well developed technology infrastructure.

7.  Systematic organizational knowledge process (pp. 117-118).

Along the same line, McCampbell et al. (1999) state in their study that teams, relationships, and networks are the basis for effective knowledge transfer and sharing (p. 174).  As a contrast, Lucier and Torsilieri (1999) conducted studies on several knowledge projects and discovered four common traits in the less successful programs:

            1.  No specific business objective, but only general aspirations.

2.  Incomplete program architecture that applies some principles of effective learning but                                                                              
                 does not build on the linked natural dynamics of organization change and knowledge

     creation and use.

            3.  Insufficient focus on one or two strategic priorities.

            4.  Top management sponsorship without active, ongoing involvement (p. 278).

Similarly, Snowden (1999) states that the less successful programs “fail to articulate which type(s) of activity is/are their objective, an omission that can easily lead to mismatched expectation.  For example, they may assume that by providing technology to share explicit knowledge, tacit knowledge will automatically be shared” (p. 54).

Future Considerations for Knowledge Management

            In spite of a number of people viewing knowledge management as a passing business fad, the concept is an emerging discipline, which arose from a need for businesses to stay competitive in an information age post-capitalist society.  As the field matures, knowledge management compels one to examine all approaches to sharing information and knowledge, informal and formal, social and technological.  It fosters creativity and innovation.  As technology develops even further, organizations will make new advances in transferring, sharing, and creating knowledge.  Even today, businesses are improving artificial intelligence systems in order to capture and provide access to problem resolution, legal knowledge, and new concept development (Grover and Davenport, 2001, p. 10). Nevertheless, knowledge management requires attention and discipline.  It requires considerable effort on the part of workers and managers alike, but the positive effects of knowledge management are “evident by an internal and external awareness of collective strength and the ability to respond and instantly organize to meet…demands and opportunities” (McCampbell et al., 1999, p. 177).

Rationale and Hypotheses

            Based upon the literature noted in the preceding pages, one can argue that there is a need for all business firms to enhance individual and organizational knowledge.  This enhancement is thought to lead to a competitive advantage in the marketplace.  One could also argue that the same practices can lead to competitive advantages for all organizations, not just businesses.  For instance, will the adoption of knowledge management practices benefit government organizations such as the Department of Defense?  By applying the principles of knowledge management and, specifically, the six steps of knowledge packaging (Myers and Swanborg, 1999, pp. 202-203), the authors aim to prove the following hypothesis:

H1:  The establishment of a knowledge-based system in which public affairs professionals throughout the Department of Defense can share knowledge and information will help public affairs professionals solve public affairs problems and challenges.

            Further, one must note that organizations are made up of individuals.  One has learned from review of the literature that knowledge is transferred and shared between individuals in an organization.  Following from the first hypothesis, the authors aim to prove through Nonaka’s spiral of knowledge (Nonaka, 1994, p. 14) the following hypothesis:

H2:  The establishment of a knowledge-based system in which public affairs professionals throughout the Department of Defense can share knowledge and information will create better performance of both individual public affairs professionals and the entire public affairs organization as a whole.

What constitutes better performance?  While that term is somewhat subjective, in the public affairs discipline, there are numerous indicators of better performance.  It can be illustrated by faster response time, greater accuracy in response, better delivery of command messages, proactive planning instead of passive reaction, more thorough research, and sounder decision-making.