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Programme Title: MBA University of South Wales Programme Course Title: ST4S39-V1 Strategic Systems Thinking Summative Assessment Essay 2 Student Name: Ekebo Udo Ituk Student ID Number: 74107156 Lecturer: Bernardo Batiz Lazo Submission Date: March 2019.
Task: “ Before we measure something we must ask whether we understand what it is we are trying to measure.” (Gray et al, 2015). Critically discuss the above statement in relation to effectively developing the strategic knowledge base in your organization.
Table of Contents
Introduction...................................................................................................................... 3
Knowledge Management/Environment............................................................................ 4
Communities of Practice/Interest..................................................................................... 9
Intellectual Capital and Social Networks.........................................................................
Performance Measurement............................................................................................
Conclusion..................................................................................................................... 16
References.....................................................................................................................
Introduction
There is a common saying that 'knowledge is power'. This is relative to every facet of life and living because where knowledge is absent, there is no growth. A firm's learning process is made up of acquiring, distributing, interpreting, and memorizing of knowledge. This knowledge is contingent on its in-house learning activities in addition to the learning activities of different external players. Strategic systems thinking would be deficient without a Strategic Knowledge base. Numerous frameworks have emerged to the advantage of knowledge systems, albeit a small number have really strived to put this knowledge management in the bigger scene of strategic systems thinking. The objective of this paper is to discuss an organization’s outlook to strategic management
It is considered “a valuable intangible resource and potential source of capabilities and competencies for innovations and new product development, it consists of information, technology, know-how, and skills. Value and sustainability are created from the integration of these resources better than competitors". It is an esteemed position in which a person is in cognitive connection with reality. It is, therefore, an interconnection. This definition clearly shows that knowledge is not just an unassertive exercise but created through activity. Knowledge is more intricate than data or information; it is personalized, usually founded on experience, and very inferential. It is seen as the basis of creating value (Rastogi, 2002). There are two main types of knowledge i.e. Tacit Knowledge and Explicit/Codified Knowledge. Dalkir (2005) explains that tacit knowledge is the knowledge that borders on expertise, know-how, know-why, and care-why. It involves the ability to adapt, to deal with new and unusual situations. Tacit knowledge can integrate, share a vision, pass on a culture and it involves tutoring and mentoring to transfer experiential knowledge on a one-on-one face-to-face basis. Kogut and Zander (1992) further explains that it is uncodified, slow to transfer, though can be acquired via observation and emulation, it shows only when it is applied, requiring a degree of closeness and perpetuity, and as stated by Choo (2002) it is expensive, needing complex interactive structures. It is difficult to communicate and also difficult to put into words, text, or drawings. On the other hand, explicit or codified knowledge represents content that has been expressed in some material form such as words, audio recordings, or images bothering on observability and information that can be transferred without integrity loss (Kogut and Zander, 1992). It involves the ability to promulgate, to replicate, to ingress, to teach, to train and to reapply all through the organization. Explicit or codified knowledge also involves the ability to arrange, to classify; to express and convert a vision into a mission statement, into operational guidelines as well as transfer of knowledge via products,
services, and documented processes (Dalkir, 2005). It is also inexpensive to convey and disseminate. In summary, tacit knowledge has the propensity to live “within the heads of knowers,” whilst explicit knowledge is typically contained within material or concrete media. Van den Berg (2013) argues that there is a third type of knowledge - Encapsulated knowledge. He claims that encapsulated knowledge is neither tacit nor explicit, because it is externalized and implicit. For people and organizations to survive and grow in our ever-changing society, new knowledge is required to get work done. Firms cannot rely on their previous knowledge as it becomes obsolete and ineffective in handling the new situation caused by change. This is where the role of Knowledge Management (KM) comes into play. The aim of KM is seen as the commitment to reproduce, as a matter of fact to create the information environment that is sound, abundant and unbarred communication and information access as well as establish the potential for the organization to create outstanding situational awareness and therefore to make the right decisions. "The utilization of knowledge and knowledge management (KM) is being highly considered as an organizational capability and a potential source of sustainable competitive advantage (SCA)" (Mahdi, Almsafir and Yao, 2011). In summary, KM is the business activity and research discipline centered on anchoring knowledge for organizational competitive advantage. There is no widely recognized definition of knowledge and knowledge management (KM), but most experts and practitioners agree that KM uses both tacit and explicit knowledge with the purpose of adding worth to the organization. Dalkir (2005) defines Knowledge management as "the deliberate and systematic coordination of an organization’s people, technology, processes, and organizational structure in order to add value through reuse and innovation. This coordination is achieved through creating, sharing, and applying knowledge as well as through feeding the valuable lessons
can be formed. Here, they developed explicit knowledge by providing links to internal and external knowledge information interchanges i.e. databases, benchmarking data and past studies, and creation of “Global Refining Networks” which makes possible swift interrelation between curious and interested staff and those with appropriate competence and knowledge. Similarly, tacit knowledge is started by facilitating and expediting the suitable and efficient adoption of latest technologies, value-adding practices and lessons learnt and network metrics. Chevron has a ‘Technology Rapid Execution’ (TRex) networks. These transports tacit knowledge between technical and operations staff for cost-effective and performance-improving technology development (Stemke, 2004). Relating knowledge management to the case study of the Essex Police’s ‘Plan on a Page’, Marr and Creelman (2015) explains that innovation starts with the creation of a novelty approach to knowledge management within the organization. With the knowledge of ‘desperation for a change’ and furnishing the workforce with both explicit and tacit knowledge, there was an unprecedented change in the police force. Conversely, with Spacepointe Limited, despite being an IT/Payments Solutions firm that should be a knowledge-creating organization, it can be said that they do not have a well-built knowledge base although they are an organization that strongly requires it. In Spacepointe, knowledge is more of explicit/codified form than of tacit despite possessing the knowledge vision because the staff are not intellectually inspired to create knowledge as top management does not do enough to encourage this. Even though there is interactivity and training, it is predominantly ‘information’ that is been made obtainable to the staff.
Communities of Practice/Interest
Communities of Practice started and developed from informal networks (Wenger and Trayner, 2011). As stated by Wenger and Snyder (2000), it is a recent organizational disposition composed of an unofficial group brought together by shared competence and passion for consolidated enterprise. They have different names such as learning networks, thematic groups, or tech clubs. Wenger (no date) defines communities of practice as "groups of people who share a concern or a passion for something they do and learn how to do it better as they interact regularly". There is a shared area of interest and expertise in chasing their interest in their field, members engage in common activities and discourses, assist and aid each other, and share information. They build a shared collection of resources: insights, stories, contrivances, ways of handling recurring difficulties. Few CoPs are a bit compact; while others are exceptionally large, usually with a nucleus group and numerous outlying secondary constituents. Some are domestic, and others are world over. Some meet mostly face-to-face, others usually online. Few are inside an organization and others include constituents from different organizations. Some are officially certified, usually funded; and some are totally unofficial and surprisingly unnoticeable. Communities of practice can be seen in organizations, in the government, in education (schools), associations, social sector, international development as well as the web. As a matter of fact, communities of practice are all over. They are a well- known experience, so near maybe that people don't take notice of them (Wenger, no date). Communities of practice specifically, lets us to look beyond more apparent official structures such as classrooms, organizations or nations, and consider the constructs determined by meeting in practice and the informal learning that accompanies it. Practitioners can address the tacit and dynamic aspects of knowledge creation and sharing, as well as the more explicit aspects. Things that can be addressed include but
the entity’s identifiable assets is defined as “goodwill.” Goodwill is also known as “intangible assets.” Citing Marr and Schium (2001), Kamukama, Ahiauzu and Ntayi (2011) argues that "intellectual capital is the group of invisible assets that are ascribed to an organization and most significantly influence the firm’s competitive position and performance". Kamukama, Ahiauzu and Ntayi (2011) further buttress their point on the pricelessness of intellectual capital by citing Wang and Changa (2005) that "intellectual capital is a fundamental determinant of a firm's current and future competitiveness as well as a firm's value growth." Intellectual Capital also comprises of the skills or knowledge that a company owns through its staff, chiefly the staff skill sets, aptitudes, outlooks – human knowledge that is not possessed by the organization, but can be harnessed and conveyed to add value to the organization (Choong, 2008).It is the duty of the organization to take advantage of the extensive knowledge staff have obtained on the job by harnessing and transferring the knowledge to current and prospective workers. The knowledge management nexus of a firm consists of a dense, dynamic, and mutually supportive interactive pattern of its social capital (social network), human capital, structural capital and customer capital and knowledge management. Intellectual capital (IC) of the firm is the resultant from this nexus (Rastogi, 2002). Nahapiet and Ghoshal (1998) views a Social Network as a ‘Social Collectivity’, because it involves people- in an organization, firm or even an ‘Intellectual Community’. In such context, connections and relationships are formed both internally and externally which is termed ‘Social Capital’: the main definition being that networks of relationships create a valuable resource for the management of social proceedings. It consists of structural, relational and cognitive dimensions. It creates new intellectual capital (IC)through a combination and exchange of various other components of intellectual capital. It is one of the leading categories that produce stability in Intellectual Capital.
Human Capital: Citing (Halim, 2010; Bontis, 2002), Kamukama, Ahiauzu and Ntayi (2011) argues that human capital is a principal component of intellectual capital which refers to the human factor in the organization, the people and what an employee brings into the value adding processes and encompasses combined intelligence, skills, learning ability, quality management, core competencies, knowledge base, professional competence, social competence, employee motivation, and leadership ability which gives the organization its distinctive character. Structural Capital talks about the processes and operations of the organization, cultural set up and the innovativeness in its operations. Kamukama, Ahiauzu and Ntayi (2011) argues further by referring to the definition of structural capital by Halim (2010) that states that it is “what happens among the people, how the people are connected within the company, and what stays when the employee leaves the company”. It is a stock of knowledge that is possessed by the firm and includes corporate culture, information technology and explicit knowledge, product innovation, process optimization, and innovation among others. Customer Capital: This refers to relational capital. It is the value of external relationships, and how customers are treated and valued in the organization: ‘Goodwill’.
Choong (2008) listed seven schools of thought by various other researchers in modeling and measuring intellectual capital. They are Skandia Navigator by Edvinsson (1997) and Edvinsson and Malone (1997), Intangible asset monitor by Sveiby (1997), Calculated intangible value by Stewart (1997) and Luthy (1998), Balance scorecard by Kaplan and Norton (1996, 2000), Technology broker by Brooking (1996), Value Explorer by Andriessen and Tiessen (2000) and Value Chain Scoreboard by Lev (2001, 2002b). Kaplan and Norton’s (1996, 2000) balanced scorecard method, is one of the widely instituted techniques. This was how the indicators (Human, Customer and Structural
be clearly defined objectives, critical success factors (CSFs) for each objective must be identified, and key performance indicators (KPIs) for each CSF must be defined and targets set for each defined KPI. The whole process of measurement and target setting works when the targets fit the context and the management of the business and there is a clear understanding of the type of target being used. Properly designed KPIs supplies the crucial navigation tools that provides a clear understanding of present levels of performance and the wrong KPIs may drive a company to financial ruin (Worth, 2016). An example of effective application of performance measurement is the Essex Police Force' ‘Plan on a Page’ where they unanimously reached an agreement on strategic goals, and a clear communication of their priorities.
Conclusion
For Spacepointe Limited to grow their strategic knowledge base, every player must support knowledge management, not just top executives. They must become self- organized with matching purpose, reorganizing their objectives, having a precise mission and direction. They must also engender a shared perception of concepts that will aid a diversity of knowledge. They should eradicate limitations and be devoted to members. Questions like 'What is their IC? Have they measured performance? Would they advocate CoPs both internally and externally? Are they ready for new beginnings?' must be asked and answered. Everyone needs to function together as an efficient system should. In conclusion, new knowledge creation must be encouraged, and it should be a continuous process. This is the only way Spacepointe Limited will remain relevant in our ever-changing society.
References Choo, C.W. (2002) Information Management for the Intelligent Organization: The Art of Scanning the Environment. 3rd edn. Medford, NJ: American Society for Information Science and Technology.
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Dalkir, K. (2005) Knowledge Management in Theory and Practice. Oxford, UK: Elsevier Butterworth–Heinemann.
Dasgupta, M. and Gupta, R.K. (2009) 'Innovation in Organizations: A Review of the Role of Organizational Learning and Knowledge Management', Global Business Review , 10(203) [Online]. Available at: http://gbr.sagepub.com/cgi/content/abstract/10/2/ (Accessed: 26 March 2019).
Kamukama, N., Ahiauzu, A., and Ntayi J.M. (2011) 'Competitive Advantage: Mediator of Intellectual Capital and Performance' , Journal of Intellectual Capital , 12(1), pp.152-164, Emerald Group Publishing Limited [Online]. Available at: https://doi.org/ 10.1108/14691931111097953 (Accessed: 27 March 2019).
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Stemke, J. (2004) 'Driving operational excellence through Communities of Practice: The Case of ChevronTexaco', Communities of Practice Lessons from Leading Collaborative Enterprises , pp. 1-7. Ark Group [Online]. Available at: https://vle-usw.unicaf.org/course/ view.php?id=712#section-8 (Accessed: 23 March 2019).
Van den Berg, H.A. (2013) ‘Three Shapes of Organizational Knowledge’, Journal of Knowledge Management , 17(2). pp.159-174. Emerald Group Publishing Limited [Online]. Available at: https://vle-usw.unicaf.org/mod/folder/view.php?id= (Accessed: 23 March 2019).
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Wenger, E. and Snyder, W. (2000) ‘Communities of Practice: The Organizational Frontier’ Harvard business review , 78(1), pp.139-146. [Online] Available at https:// hbr.org/2000/01/communities-of-practice-the-organizational-frontier (Accessed: 24 March 2019).
Wenger, E. and Trayner, B. (2011) 'Communities versus networks'. [Online] Available at: www. wenger-trayner.com/ (Accessed: 24 March 2019).
Worth, J. (2016) 'The best way to track your company's performance'. Available at: https://www.entrepreneur.com/article/273484 (Accessed: 19 March 2019)
