Knowledge management within an organisation: A consulting engineering company as a case study

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Knowledge management within an

organisation: A consulting engineering

company as a case study

JC Brink

orcid.org/0000-0003-4290-3753

Mini-dissertation accepted in partial fulfilment of the requirements

for the degree

Master of Engineering in Development and

Management

at the North-West University

Supervisor:

Prof H Wichers

Graduation:

May 2020

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ACKNOWLEDGEMENTS

Hiermee wil ek graag my dank uitspreek aan die volgende persone:

 Dankie Vader vir die verstand, krag en hulpbronne wat U aan my geskenk het om my nagraadse studies te voltooi. Alles is net genade en `n onverdiende groot voorreg.  Marelize. Sonder jou het hierdie verhandeling en gepaardgaande studies nooit gebeur

nie. Ek hoop ek kan na afloop van my studies vir jou dubbel die tyd teruggee wat jy vir my gedurende dié tydperk gegee het. Al jou opofferings was my grootste motivering. Ek is vir ewig in die skuld by jou!

 Aan my vriende, dankie vir die rol wat julle gespeel het om my te motiveer om nagraadse studies aan te pak en te voltooi. Tereg sê ons Lewenshandleiding “Yster slyp yster en so vorm vriende mekaar”.

 Dr. Albert Myburgh, dankie vir die puik taalversorging in hierdie verhandeling. Ek skuld jou ook!

 All the wonderful people who work for Aurecon. You make this organisation a great place to work for. Your friendliness and helpfulness made this study possible. In particular, I want to extend my thanks to JP Nel and Nerine Joubert for their above and beyond support and guidance during this study.

 Lastly, I would like to thank Aurecon as an organisation, for funding my studies and willingness to become the subject of my dissertation.

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ABSTRACT

Knowledge is power. Knowledge management (KM) provides comprehensive means to channel this potential power to the benefit of an organisation. When flourishing in an enterprise, KM offers substantial benefits which includes time and monetary savings for the business, as well as growth in skills, productivity and job satisfaction for employees. Before knowledge could be managed, clear distinction must be made between knowledge and its relatives data and information. This differentiation would enable the KM effort to focus on knowledge only, allowing the KM initiative to be lean. Organisational knowledge must further be dissected to explicit and tacit form, as they both play distinctive roles in KM.

The KM solutions framework provides a means to manage knowledge. This framework offers an all-encompassing and structured means to manage an organisation’s most critical asset, namely its knowledge. The framework provides sound principles, where emphasis is placed on organisational culture and communities of practice. It should be noted that the framework should not be applied blindly, as the application of formalised KM should be tailored uniquely for each organisation. Over application would clutter the organisation, diluting focus, while under application would not grant KM the extensive corporate attention and support it rightly justifies. Regardless of the extent of KM application, KM should always have an 80% people focus with technology making up the remaining 20%, playing a supporting role.

To establish what KM would look like in practice, Aurecon was used as a case study. During the empirical investigation of the study, it was found that various KM foundational elements such as technologies, mechanisms and communities of practice were present in the consulting organisation. The study further revealed that organisational culture enabled people to successfully create and share knowledge in a localised setting. It was however established that KM amongst Aurecon’s people seldomly occurred outside their immediate location. It was thus concluded that Aurecon’s KM foundation is sufficiently equipped to realise the ultimate goal of KM, but its organisational culture is not fully aligned with the initiative yet.

Remedial measures are proposed to improve the status quo and include the fostering of an enabling culture where knowledge creation and sharing occurs beyond the boundaries of an employees’ personal network. This culture must be visibly driven by leadership, where people’s participation in company-wide KM are motivated by incentives and are held accountable by key performance indicators. Through communities of practice, knowledge seekers could be connected to knowledge sharers, and in doing so, granting seekers access to the knowledge of the entire organisation.

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ABBREVIATIONS

3D three-dimensional

ADA Aurecon Design Academy

AIF Aurecon Information Framework

ATLAS Aurecon Talent, Learning and Achievement System

AU Arup University

BIM building information modelling

CDO chief digital officer CEO chief executive officer

CoP communities of practice

CPD continuous professional development ERM Energy, Resources and Manufacturing

IBM International Business Machines Corporation

IT information technology

KC knowledge champion

KIC Knowledge and Information Centre

KM knowledge management

KM² knowledge management monitor

KM³ KM maturity model

KO Knowledge Online

KPIs key performance indicators

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KX Knowledge Xchange

LL lessons learned

MAKE Most Admired Knowledge Enterprise award

PED Project Experience Database

ROI return on investment

R&D research and development

SECI socialisation, externalisation, communication and internalisation

TKM technical knowledge management

TVA Tennessee Valley Authority

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5.1 Introduction ... 123 5.2 Aurecon’s KM initiative ... 123 5.2.1 KM technologies ... 124 5.2.1.1 Intranet ... 124 5.2.1.2 Taxonomy ... 124 5.2.1.3 Corporate library ... 125 5.2.1.4 Skills finder ... 125 5.2.1.5 Knowledge portals ... 125 5.2.1.6 Training repositories ... 126 5.2.2 KM mechanisms ... 126 5.2.2.1 Social media ... 126 5.2.2.2 Future-Ready initiative ... 127 5.2.2.3 Talent development ... 127 5.2.2.4 Aurecon Methodology ... 127 5.2.2.5 Lessons learned ... 128

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5.2.3 Communities of practice ... 128

5.2.3.1 Expertise groups ... 129

5.2.3.2 Technical service line groups ... 129

5.2.3.3 CoP knowledge portals ... 129

5.2.3.4 Yammer groups ... 130

5.2.4 Organisational culture ... 130

5.2.4.1 Employees’ perception of organisation’s KM culture ... 130

5.2.4.2 Utilisation of measures to improve KM engagement ... 132

5.2.4.3 Employees’ involvement in, and experience relating to, key KM aspects ... 133

5.3.1 Foster an enabling organisational culture ... 134

5.3.2 Connect Aurecon’s employees ... 136

5.3.3 Reconfigure existing KM mechanism and technologies ... 139

5.4 Proposed KM model ... 140

CHAPTER 6 – CONCLUSION AND RECOMMENDATIONS ... 143

6.2 Recommendations... 144

6.3 Future study ... 145

BIBLIOGRAPHY ... 146

APPENDIX A – QUESTIONNAIRE ... 158

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LIST OF TABLES

Table 2-1: Information management vs knowledge management (Hajric, 2019) ... 20

Table 2-2: Examples of interaction in a CoP ... 24

Table 2-3: Benefits of a CoP (Fontaine & Millen, 2004) ... 26

Table 2-4: Knowledge management mechanisms and technologies (Becerra-Fernandez & Sabherwal, 2010:49–50) ... 30

Table 2-5: KM maturity stages (Minonne & Turner, 2009:586)... 42

Table 2-6: KM related KPIs (Minonne & Turner, 2009:590–591) ... 45

Table 3-1: Global employee distribution ... 63

Table 4-1: KM inception plan ... 73

Table 4-2: Enabler activity in early 2014 ... 75

Table 4-3: Portal activity in early 2014 ... 76

Table 4-4: Expertise groups portal visits ... 101

Table 4-5: Interactions in communities ... 102

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LIST OF FIGURES

Figure 1-1: Definitions of “data”, “knowledge” and “information” (Hajric, 2019) ... 2

Figure 1-2: Definition of KM ... 4

Figure 1-3: The Lesotho Highlands water project (top left), the Gabbro terminal expansion (top right), the Global Switch data center (bottom right), and the Kaikoura Earthquake recovery programme (bottom left). ... 7

Figure 2-1: The SECI model (Nonaka & Takeuchi, 1995) ... 13

Figure 2-2: Overview of KM solutions and foundation (Becerra-Fernandez & Sabherwal, 2010:42) ... 15

Figure 2-3: KM solutions framework (Becerra-Fernandez & Sabherwal, 2010:68) ... 16

Figure 2-4: CoP life cycle (Wenger et al., 2002) ... 28

Figure 2-5: KM tools integrated in Nonaka and Takeuchi’s knowledge spiral (Sjöström & Svedberg, 2010) ... 32

Figure 2-6: KM processes (Becerra-Fernandez & Sabherwal 2010:57) ... 33

Figure 2-7: Buckminster Fuller’s knowledge doubling curve, with IBM’s post-1982 addition .... 39

Figure 2-8: Level of KM maturity in organisations ... 41

Figure 2-9: Knowledge management monitor (KM²) ... 45

Figure 3-1: Job level distribution ... 64

Figure 4-1: Unique knowledge portal hits recorded in November 2013 ... 76

Figure 4-2: Conversations per knowledge portal recorded in November 2013 ... 77

Figure 4-3: Aurecon’s KM foundation ... 79

Figure 4-4: Aurecon’s main KM technologies ... 80

Figure 4-5: Global technical training repository ... 86

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Figure 4-7: Aurecon’s main KM mechanisms ... 89

Figure 4-8: The “Future-Ready” model ... 91

Figure 4-9: Sources consulted for LL ... 98

Figure 4-10: Overview of Aurecon’s communities of practice ... 99

Figure 4-11: Building electricals knowledge portal (Aurecon intranet, 2019) ... 104

Figure 4-12: The core of the Durban Electrical & Control CoP ... 106

Figure 4-13: The expanded CoP ... 107

Figure 4-14: In-program screenshot of the substation design software package ... 110

Figure 4-15: Region participation in the survey (Question 1) ... 114

Figure 4-16: Business unit representation (Question 2) ... 114

Figure 4-17: Role representation (Question 3) ... 115

Figure 4-18: Leveraging knowledge for the benefit of the entire organisation ... 116

Figure 4-19: Job role influence on opinion ... 116

Figure 4-20: Aurecon’s KM focus: People vs technology ... 117

Figure 4-21: KM Driver in Aurecon: People vs technology ... 118

Figure 4-22: Incentives for the creation and sharing of knowledge ... 119

Figure 4-23: Awareness of knowledge leaders ... 120

Figure 4-24: Methods to find subject matter experts ... 120

Figure 5-1: Workings of the Roads CoP ... 138

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CHAPTER 1 – INTRODUCTION

The famous aphorism “scientia potestas est” is believed to have been coined by Sir Francis Bacon in 1597. When translated from Latin into modern English, it means “knowledge is power” (Garcia, 2001). This statement still holds true today. In fact, in today’s economy, this aphorism might be more relevant to businesses than ever before.

As Schilling (2013) reported that the knowledge available to businesses in this modern age keeps on growing exponentially, according to the stated aphorism, the power available to enterprises keeps on growing exponentially too. However, knowledge can only provide an organisation with power if it is managed and applied to influence the outcome of a situation favourably.

In order to manage and apply knowledge properly, organisations must firstly recognise the value of knowledge as a resource that provides access to other, traditional resources. Drucker explains that “traditional production elements have not disappeared – soil (i.e. natural resources), labour, capital. But they have become second-rate. They can be acquired, and it is not difficult to do if you have the knowledge” (1993:42). Parzyszek (2011) further asserts that knowledge affords organisations highly competitive positions in the market only when it is valuable to the organisations at a given time, and when it is central to the organisation’s business practices.

In addition to recognising the value of knowledge, organisations should create an environment in which they can manage and apply knowledge easily and effectively. Generally speaking, such an environment encompasses the following:

The creation of opportunities and rights to use knowledge for innovation purposes, having a clear mission and a clear business strategy comprehensible for its employees, appropriate incentive policies, a good organisation of work, the existence of a system for communicating knowledge of experienced workers to younger ones, a favourable atmosphere in the company (far from “unhealthy” competition), creating possibilities and development opportunities, flexible rules, fighting routine in the organisation, emphasis on long-term benefits (Parzyszek, 2011).

Clearly, the managing of knowledge can be a complex task. Nevertheless, it’s an important activity that needs to happen if organisations wish to become and remain powerful. The remainder of this chapter will discuss how data, information and knowledge are differentiated from each other. Different types of knowledge that are present in organisations are also briefly discussed. Subsequently, knowledge management (KM) is defined, and benefits of proper knowledge management to companies in today’s economy are considered. The scope of this study, as well

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as the research aim and objectives, are then indicated. Lastly, an outline of the chapters that follow is given.

1.1 Data, information and knowledge

It is important that “knowledge” be recognised and appreciated as being different from “data” and “information”, as knowledge presents an organisation with far more power as opposed to data and information. “Data” refers to raw facts such as raw numbers or assertions. It may be given without context, meaning or intent. Moreover, it can be captured, stored and communicated easily. “Information” is a subset of data, and includes data that possesses context, relevance and purpose. It involves the analysis of raw data to obtain insights and reveal meaningful patterns and trends in the data. “Knowledge” can be distinguished from data and information, as it is essentially rich information in the sense that it facilitates action (Beccerra & Sabherwal, 2010:18–19). Beccerra and Sabherwal define knowledge in an area as “justified beliefs about relationships among concepts relevant to that particular area” (2010:19). Definitions of “data”, “information” and “knowledge” are given in Figure 2-1.

Figure 2-1: Definitions of “data”, “knowledge” and “information” (Hajric, 2019)

1.2 Knowledge reservoirs

Knowledge exists in all organisations and is found in many different locations. It can be found in “knowledge reservoirs” such as people, artefacts and organisational entities (Beccerra & Sabherwal, 2010:33).

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In professional services firms, such as consulting engineering companies, knowledge resides predominately in the minds of individual members of the enterprise (Argote & Ingram, 2000). Due to professional relationships between members of a firm, knowledge can be found in groups too (Felin & Hesterly, 2007), as members who have worked together as part of a team for a long time know the strengths and the weaknesses of their peers. They gain a good understanding of how their colleagues prefer to approach and solve problems (Skyrme, 2000).

Knowledge can also be found in artefacts, as organisations attempt to guide future behaviour. These artefacts are developed through experience over time (Levitt & March, 1988). Typically, it can be found in organisational practices, mechanisms, technologies and repositories (Beccerra & Sabherwal, 2010:33).

Organisational entities can be knowledge reservoirs too, where knowledge is stored in interorganisational networks and business units of the organisation.

1.3 Knowledge types

Regardless whether knowledge is located in people, artefacts or organisational entities, knowledge can usually either be tacit or explicit (Nonaka, 1994; Polanyi, 1966).

1.3.1 Explicit knowledge

Explicit knowledge typically refers to knowledge that has been expressed into words and numbers (Beccerra & Sabherwal, 2010:24). It is normally the easiest to manage, as it is formalised and codified and can be identified, stored and retrieved easily (Wellman, 2009). Typically, this type of knowledge can be found in databases, memos, notes and documents, with technology playing an important role in how it is captured, shared and distributed (Botha, Kourie & Snyman, 2008). Explicit knowledge lacks the rich experience-based know-how that typically provides companies with a competitive advantage (Hajric, 2019). Consequently, theoreticians have argued that it is unsophisticated and thus a less important kind of knowledge (Brown & Duguid 1991, Cook & Brown 1999, Bukowitz & Williams 1999). The challenge in managing explicit knowledge, however, lies in the way in which organisations should best act as custodians of this knowledge, ensuring that it is properly stored, reviewed, updated or discarded (Hajric, 2019).

1.3.2 Tacit knowledge

Tacit knowledge is considered the know-how of an organisation (Brown & Duguid, 1998) and is largely based on personal experience and intuition. It can be difficult to define and communicate, given that it is founded in action, commitment and involvement (Nonaka, 1994). In contrast to explicit knowledge, tacit knowledge is difficult to manage, as the codification of such knowledge

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is very challenging for the tacit knowledge holder. Up to 95% of the knowledge in an organisation is tacit (Bair, 2004). This type of knowledge often provides organisations with the cutting edge it requires to sustain its competitiveness. It is very valuable and often leads to breakthroughs in an organisation (Wellman, 2009). It is paramount that an organisation focusses on tacit knowledge by focusing on people and their processes, as the knowledge resides in people’s minds, and includes people’s skills, capabilities, expertise, cultural beliefs, values, attitudes and mental models (Botha, Kourie & Snyman, 2008). This type of knowledge can be harvested though qualitative and quantitative practices such as knowledge surveys, questionnaires, individual interviews, group interviews, focus groups, network analyses and observations.

1.4 Definition of knowledge management

“I wish we knew what we know at HP.” – former Hewlett-Packard CEO Lew Platt

An informal survey revealed more than a hundred definitions of “knowledge management” (O’Dell & Grayson, 1998). This vast number of definitions can be attributed to the fact that KM is a multidisciplinary field that forms an important part of any productive activity, and that its definition depends on the perspective from which it is looked at. Nonetheless, most definitions draw attention to a need in KM to supply the correct knowledge to the correct people by gathering, packaging, sharing and storing knowledge. This defining characteristic of KM is presented graphically in Figure 1-2 (KMI, 2019).

Right

Knowledge Right Context and Format Right People Right Time

Enable Right Action

in the to the at the to

Gather Package Share Store

Figure 2-2: Definition of KM

In addition to enabling the supply of the correct knowledge to the correct people, KM in a company should allow that organisation’s members to create and share knowledge, as such creation and sharing will lead to acts that measurably improve the organisation’s performance (NASA, 2017) and thus provide the company with the competitive advantage it needs to stay in business. In view of these requirements, and for the purposes of this particular study, the following KM definition proposed by Butler (2000) is the most relevant:

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KM is a discipline that encourages a unified approach to identifying, managing, sharing and applying all of an organisation’s knowledge assets. These assets may include databases, documents, policies and procedures as well as previously unarticulated expertise and experience present in individual workers. KM encompasses the development, implementing and maintaining of the appropriate technical and organisational infrastructures to enable knowledge sharing.

1.5 Benefits of knowledge management

Intangible assets such as intellectual capital and knowledge assets are created over time as a company learns. In most sectors of industry, companies have realised that they increasingly depend on their intangible assets. In the 1990s, corporate giant Microsoft earned 94% of its market capitalisation value ($119 billion) from intangible assets. Intel attributed 85% of their $113 billion to intangible assets, while Coca-Cola credited 96% of their $148 million to intangible assets (Roos & Roos, 1997).

Organisations’ failure to manage their knowledge assets effectively can be a major drawback for them, given the time they end up wasting. In a study conducted in the steel manufacturing sector, thirty identical continuous casters were commissioned at different steelmaking plants. Time was measured from when a unit poured its first steel to when it was operating at optimum design capacity. All the plants took a different amount of time to reach optimum production. The shortest period was recorded at seven and a half months, while the longest period exceeded six years. The average time required was two years (Garvin, 2000:5–8). Clearly, the plant who achieved the optimum casting rate the quickest, gained tacit operational knowledge faster than the rest. If this plant was to share this knowledge with the other plants, enabling the other plants to optimize their individual operations, the overall average time would have potentially been brought down to seven and a half months, resulting in a significant time saving throughout. Another example is that of financial services company Skandia. They managed to reduce the time it took them to open a new office in a new country from seven years to seven months. Skandia was able to achieve this as they developed a particular set of standard systems and processes that could be implemented in any of their new offices, regardless of location (Robinson et al., 2005). This standard set meant that Skandia didn’t have to launch a new office from scratch but could employ these location-neutral systems and processes repeatedly, kick-starting the establishment.

In addition to time, a substantial amount of money can be saved through effective organisational KM too. At the turn of the century, the International Data Corporation estimated that the Fortune 500 companies collectively could have saved $31.5 billion per annum if they had managed their knowledge assets efficiently (Babcock, 2004:46). In the same period, an oil company recorded a

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saving of $150 million per annum in their fuel and energy expenses as a result of avidly sharing their energy management knowledge in-house (Robinson et al., 2005).

Both time and money are linked to the efficiency dimension of measurable benefits (Pfeffer, 1997). By means of good KM, organisations can save time and money, ensure faster and more efficient problem solving, improve the quality of deliverables, and enable informed decision-making that prevents the repetition of mistakes.

1.6 About Aurecon

This study is focused on KM within Aurecon. As an organisation, Aurecon is an international engineering and infrastructure advisory company that has offices and clients across the globe. The company is privately owned by employees and was formed in 2009 following a merger of Africon, Ninham Shand and Connell Wagner, which combined to form a new global group. At the time of the merger, Africon was South Africa’s largest privately-owned infrastructure consultancy, while Ninham Shand was one of South Africa’s most recognised engineering and environmental consultants. Connell Wagner was one of Asia Pacific’s largest and most experienced multidisciplinary infrastructure consulting companies. Prior to the merger, all three legacy companies had individually been in the industry for more than half a century. Being established in 1932, Ninham Shand was the oldest of the three (Aurecon group, 2019).

Since the merger, Aurecon has continued to expand through the acquisition of several other companies, broadening its service offering to its clients. Aurecon now boasts an impressive portfolio of diverse projects it had been involved in all over the globe. Some of these projects include the Highlands Water Project in Lesotho, the Gabbro terminal expansion in Qatar, the Global Switch data centre in Hong Kong and the Kaikoura Earthquake recovery programme in New Zealand. Snapshots of these projects are provided in Figure 1-3 (Aurecon group, 2019):

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Figure 2-3: The Lesotho Highlands water project (top left), the Gabbro terminal expansion (top right), the Global Switch data center (bottom right), and the Kaikoura Earthquake

recovery programme (bottom left).

1.7 Knowledge management in Aurecon

Considering the history and stature of Aurecon, it is obvious that the organisation is collectively rich in knowledge. The enterprise is in a position to achieve its goal of drawing on its global pool of specialist knowledge to deliver vital experience, technical capability and design expertise to its clients (Aurecon group, 2019). As evident in the various amount of KM enabling mechanisms, technologies and initiatives currently present in the organisation, it is clear that the organisation has invested into KM in the past to achieve this goal.

As a pilot to this study, employees’ opinion on Aurecon’s current KM approach were gathered in informal discussions. Results from these discussions revealed thought-provoking responses.

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Generally, participants felt that KM is not considered to be a main driver within the enterprise, as it is only loosely linked to business processes, targets and needs. Participants also described the current knowledge sharing culture as a neutral behaviour, where it occurs randomly in some areas of the organisation, but not others. When learning culture before, during and after projects were investigated, survey participants indicated that they generally do not consult Aurecon’s knowledge base before they engage with new projects. They did however indicate that considerable learning takes place locally while they are working on projects. Unfortunately, when projects conclude, project learnings are rarely formally shared with the wider Aurecon, as it was indicated that learnings are not commonly fed back into the organisation’s knowledge base. Reasons for the lack of knowledge feedback into the system, might be the difficulty associated in doing so, as most of the people included in the discussions were of the opinion that the capability to share knowledge companywide remains a challenge.

1.8 Problem statement

As a global company, Aurecon boasts a collective wealth of knowledge, built up through decades of engineering practice. The organisation should be able to enjoy the various advantages that KM offers by leveraging them fully for themselves and their clients. As revealed by the informal internal discussions, however, achieving this consolidated effort in practice is a challenge. Observations made from these discussions seem to be that KM is applied to different extents throughout the enterprise, with adoption rates varying among teams. Knowledge sharing is mostly limited to the extent of personal networks, and not commonly fed back into the wider business. These observations prompted a conversation with the Aurecon KM manager. Upon enquiry, it was found that the KM manager shared the views of discussion participants. He further said that, as an organisation, Aurecon had invested in KM in the past and, as a result, could solicit and leverage some of its knowledge, but could generally do much better. The KM manager further stated that the organisation’s KM strategy is old and outdated, however. Based on the observations made from these informal internal discussions, and the conversation with the Aurecon KM manager, it was concluded that it was necessary to critically evaluate KM in Aurecon, demonstrate to what extent KM supports organisational goals and what employees’ attraction to it involves.

1.9 Research aim and objectives

The purpose of this study is to critically evaluate KM in Aurecon. This critical evaluation will enable an understanding of the organisation’s stance on and approach to KM. Furthermore, the critical evaluation would shed light on the organisation’s employees’ attitude towards and level of engagement with KM. This information will then be employed to determine how the company can

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improve its KM standing so that it can leverage its knowledge better and thereby improve its processes that involve individual learning, collective learning and collaborative decision-making, and innovation. The objectives of the study are as follows:

 Conduct an extensive literature review of KM in organisations to identify:  KM principles

 A KM framework

 Key factors that affect the successful implementation of KM in organisations  Explore Aurecon’s KM initiative and how it is perceived by Aurecon employees  Identify Aurecon’s use of measures to increase KM engagement among employees  Assess Aurecon employees’ engagement with key KM aspects

 Provide recommendations to address shortcomings in the organisation’s KM approach and to increase employees’ engagement with KM.

1.10 Scope and limitations of study

Primary sources of information were obtained mostly from business units and sources available in Aurecon internationally. Comprehensive statistics about KM in the organisation are not actively tracked or documented. Consequently, a questionnaire as well as and interviews were conducted to capture the opinions of Aurecon employees on the matter. Participating employees ranged from graduates to executive leadership, and covered all of the company’s geographical regions and business units.

Secondary information was obtained from Aurecon’s intranet and relevant documentation made available by the organisation. Supplementary secondary information was obtained from sources such as books, websites, theses and other reliable written works.

The implementation of recommendations proposed to address the shortcomings of the organisation’s KM approach would require a significant amount of resources and time. Further, the evaluation of the long-term effects of these recommendations on the organisation’s KM initiative would only be possible after a considerable amount of time has elapsed post implementation. As this study is confined by time and resource restrictions, the effects of the implementation of these recommendations could unfortunately not be assessed as part of this study.

1.11 Chapter outline

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Chapter 2: Literature review

This chapter contains a literature study, where focus is placed on knowledge conversion theory and knowledge management principles and aspects. These aspects include KM mechanisms and technologies as well as traditional KM mainstays such as organisational culture and communities of practice. Studies of other organisations’ approaches to key KM aspects are also discussed.

Chapter 3: Empirical investigation

In this chapter, the empirical design and objectives of this study are discussed in greater detail. A comprehensive plan that is aimed at answering the research question is included. The design of the questionnaire is also discussed. The process of analysing the data, including the verification and validation of the data process, is also described.

Chapter 4: Empirical results

Primary and secondary data harvested by means of the survey and literature are presented and summarised. The secondary data provides an overview of the organisation’s KM history and highlights current KM practices. The primary data reveals the sample group of the experiment, and the subsequent results of the questionnaire are categorised. This categorisation aids in forming arguments that are presented in the succeeding chapter.

Chapter 5: Discussion and interpretation

The data presented in the previous chapter is critically analysed and discussed. Based on findings relating to the research objectives, a KM improvement plan is drawn on. This plan is a step-by-step plan for the practical alignment of the organisation and its employees in terms of KM.

Chapter 6: Conclusions and recommendations

Finally, based on the research results, conclusions are drawn, and recommendations made. The research objectives are briefly assessed, and the research question answered.

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CHAPTER 2 – LITERATURE REVIEW

In this chapter, the fundamentals of KM in an organisation are considered. The theory around KM is presented, where a learning organisation is defined, and the dynamics of knowledge conversion theory are elaborated on. A specific method to manage knowledge in an organisation is presented, by following the guidelines provided by the knowledge management solutions framework. Emphasis is placed on key components of this framework, namely organisational culture and communities of practice. Critical success factors, as well as barriers to success, are described throughout. Lastly, studies of KM in other organisations are presented to understand how KM theory is applied in practice.

2.1 A learning organisation

The cornerstone of KM in an organisation is the power of learning, with technology being merely a tool to make the process more efficient. A knowledge-sharing system is said to be crucial in a learning organisation, as the system supports the sharing and reuse of individual and organisational knowledge (Becerra-Fernandez & Sabherwal, 2010:152). Learning leads to knowledge creation, which, in turn, propels continuous improvement. Knowledge creation is at the heart of a company’s competitive edge. It is imperative that an organisation learn from its experience if it hopes to stay dynamic and competitive. Such learning is achieved through continuously re-evaluating the company’s operating environments, internal skills and competencies, and tracking the progress of current strategic objectives. By means of this process, learnings are made. These are fed back into the system, which can prompt a strategy refresh, or even initiate a new cycle of strategy (University of Leicester, 2008). Successful KM can be implemented only in a learning organisation.

In a learning organisation, knowledge creation and sharing must not be generated and sustained by senior management alone. Rather, an environment that enables the whole company to do all the thinking collectively must be created. Employees should not be passive participants in the equation; they must be encouraged to apply their own knowledge for the greater benefit of the company (Mason, 2018). Employees must be skilled at exploiting, appraising, sharing and contributing to the knowledge base. To achieve this, it is critical that an organisation have effective leadership, not just in the traditional top tier of the hierarchy, but in all the levels of its system, so as to promote and cultivate a culture of learning.

A learning organisation contributes towards a healthier place of employment, as quality is improved, more commitment from the workforce is enjoyed and perceived limits are stretched

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(Karash, 1995). Senge asserts that five characteristics must be evident in an organisation for that company to be considered a learning organisation (1990:10–13):

1. Systems thinking: Organisations must be able to see patterns amongst events, rather than considering them to be isolated incidents. Organisations should also always firstly look internally to find the source of their adversities they experience on projects, as opposed to searching for the source externally.

2. Individual mastery: All employees must be committed to lifelong learning and must be encouraged to achieve their full potential. Employees must believe that, through learning, they have the inherent power to find solutions to problems the organisation faces. 3. Mental models: A good understanding of the company’s thought process is required,

along with being open to establish how it may prevent new insights and organisational practices from being implemented. Openness and real change cannot take place until this realisation is made.

4. Forming shared visions: A strong vision that binds the organisation together is needed. The buy-in of all employees is key to eliciting commitment in good and bad times.

5. Team learning: Collective learning is important, as projects are rarely executed entirely by a single employee. Modern organisations are built on teamwork, where a common goal exists and working and learning together are required to attain it.

According to Senge, if these characteristics are found in an organisation, “people can continually expand their capacity to create the results they truly desire, where expansive patterns of thinking are nurtured, where collective aspirations are set free, and where people are continually learning how to learn together” (1990:8).

2.2 Knowledge conversion theory

The socialisation, externalisation, communication and internalisation (SECI) model is a well-known conceptual model of cyclical knowledge conversion. Nonaka and Takeuchi (1995) presented the model, where the model is focused on ways in which knowledge is created and transferred in a continuous cycle as interaction between knowledge types occurs. As shown in Figure 2-1, the model depicts how explicit and tacit knowledge are generated, transferred and recreated in organisations. It contains four modes of knowledge conversion: socialisation (tacit to tacit), externalisation (tacit to explicit), combination (explicit to explicit) and internalisation (explicit to tacit). In this model, knowledge is continuously converted and created as users of knowledge practise, collaborate, interact and learn. It is thus not a static model but a continuous and dynamic one (Hajric, 2019).

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Figure 2-1: The SECI model (Nonaka & Takeuchi, 1995)

To demonstrate the workings of the SECI model, the Matsushita Electric Industrial Company (now Panasonic) and their inability to get their bread-baking machine to work properly will be discussed. The organisation faced a problem: their appliance could not bake bread successfully. Whenever the machine baked bread, the crust was overcooked, while the bread was still raw on the inside. Even after examining volumes of historical data, they were still unable to solve the problem. The company then decided to send software developer Ikuko Tanaka to consult with the renowned head baker at the Osaka International Hotel. Upon consultation, the head baker revealed what method he followed when baking bread. He showed Tanaka that the hotel stretched the dough in a specific way before they proceeded to bake it, something that the bread-baking machine did not do. Tanaka shared the knowledge he had acquired with the company’s engineers. Subsequently, the engineers modified their machine, enabling it to stretch the dough automatically before baking the bread, thereby solving the problem. Thus, effective KM led the company to make an innovative bread-making appliance that went on to break sales records in its first year on the market (Nonaka & Takeuchi, 1995).

2.2.1 Socialisation

Socialisation involves the transfer of tacit knowledge from one person to another, usually two at a time. The knowledge is passed on through practice, guidance, imitation and observation (Hajric, 2019). It often occurs informally during unrecorded team meetings and briefings, for example, or

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through apprenticeship training where a student learns by shadowing an old hand. Socialisation occurred when Tanaka was told what baking methods the head baker of the hotel used.

2.2.2 Externalisation

Externalisation involves the conversion of tacit knowledge to explicit knowledge through translation of the tacit knowledge into some type of easily understandable format. It could happen when a person talks about his tacit knowledge in metaphors or analogies, thus translating it into an understandable form. Dialogue is important, as it creates a means for both the speaker and the listener to externalise their knowledge. The direct interaction and readily available feedback enable people to better explain their thinking to one another. The codification of tacit knowledge into documents, manuals, etc. can be particularly difficult to achieve successfully. It is vital that this be done, though, as it allows for knowledge to be shared more easily throughout an organisation (Hajric, 2019). Externalisation took place when Tanaka shared what he had learned from the head baker with the Matsushita Electric Industrial Company’s engineers.

2.2.3 Combination

Combination occurs when knowledge is transferred but remains in explicit form throughout the process (i.e. explicit knowledge to explicit knowledge). It is only here in the knowledge creation cycle that information technology becomes particularly relevant to accelerate the process. Knowledge that was explicitly captured through externalisation can subsequently be mass-shared during meetings or briefings. It is crucial for this process that only relevant knowledge be shared. Therefore, knowledge should be audited, edited and processed before it is disseminated. Combination could occur from machine to machine, such as capturing the design of the bread-baking machine on detailed drawings and reports and subsequently sharing it with other factories linked to the corporation. By doing so, codified knowledge sources are combined to create new knowledge (Hajric, 2019).

2.2.4 Internalisation

Internalisation happens when people transform explicit knowledge into tacit knowledge. In the case of the engineers who were to build bread-baking machines at other factories from drawings received, it is the process where the explicit sources (machine drawings) are merely followed as if they were a recipe. Over time, the engineering behind the machine drawings is understood due to the repetitive execution of the same routine. During this process, deductions are made. These, in turn, amount to new knowledge. By using and learning explicit knowledge over time, knowledge is internalised, and one’s own existing tacit knowledge is improved (Hajric, 2019).

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2.3 Management of organisational knowledge

The requirements that are stipulated in Clause 7.1.6 of ISO 9001:2015 compel an organisation to recognise the knowledge it needs, and to identify ways to obtain and maintain it. According to Clause 7.1.6, organisational knowledge is the “specific knowledge of the organisation coming either from its collective experience or from the individual experience of its persons”. Any organisation needs this knowledge to sustain the operation of its processes and to achieve conformity in its products and services. Therefore, this knowledge must be managed properly. The acquisition of new knowledge is also needed and must be based on changing needs and trends. People and their experiences are at the centre of organisational knowledge. Their experiences must be captured and shared to create synergies that lead to the creation of updated or new organisational knowledge. By managing existing and new knowledge, an organisation recognises this knowledge as a valuable resource and can align itself to meet current and future needs. Clause 7.1.6 concludes by recommending that complex organisations implement a formalised knowledge management framework that will aid them in managing this valuable asset. Upon appreciation by an organisation that knowledge is a vital resource, the desire to leverage it exists. To gain the full benefit of knowledge, that knowledge must be managed. The effective management of knowledge requires the interaction of several components, all of which are individually important to KM. These components could be grouped into two broad categories: KM solutions and the KM foundation. KM solutions refer to ways in which certain processes and systems of KM (discovery, capture, sharing and application) can be achieved. The KM foundation refers to the organisational components (mechanisms, technologies and infrastructure) that support KM as a whole in the short and long term. As illustrated in Figure 2-2, the existence and effectiveness of the solutions depend heavily on the foundation, which means that the foundation must be sound (Becerra-Fernandez & Sabherwal, 2010:41).

KM Solutions KM Foundation KM Processes KM Systems KM Mechanisms KM Technologies KM Infrastructure

Figure 2-2: Overview of KM solutions and foundation (Becerra-Fernandez & Sabherwal, 2010:42)

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2.4 Knowledge management solutions framework

The KM solutions framework is shown in Figure 2-3. The figure provides a summary of the various components present in the KM foundation and KM solutions. There are four overall KM processes that generally outline KM. These are built on seven sub-processes. Complementary to these, there are also four KM systems and various KM mechanisms and technologies. Lastly, the five elements of KM infrastructure that work together to facilitate KM in an organisation are also shown.

Organizational

Culture Organizational Structure IT Infrastructure Common Knowledge Physical Environment Analogies and metaphors

Brainstorming retreats On-the-job training Face-to-face meetings Apprenticeships Employee rotation Learning by observation Etc.

Decision support systems Web-based discussion groups Repositories of best practices Artificial intelligence systems Case-based reasoning Groupware Web pages Etc. Knowledge Capture In te rn al iz at io n E xt er na liz a tio n Knowledge Discovery C om bi n at io n S oc ia liz at io n Knowledge Sharing S oc ia liz at io n E xc h an ge Knowledge Application D ire ct io n R ou tin e s Knowledge Discovery Systems Knowledge Capture Systems Knowledge Sharing Systems Knowledge Application Systems K M P ro ce ss es K M S ys te m s K M M ec ha ni sm s K M In fr as tr uc tu re K M T ec h no lo gi es KM Solutions KM Foundation

Figure 2-3: KM solutions framework (Becerra-Fernandez & Sabherwal, 2010:68)

Although some KM processes and their corresponding KM systems would be more appropriate than others in terms of different companies’ business strategies, organisations should endeavour to employ a combination of the four types of KM processes and systems. It is unwise to focus exclusively on one type of KM process, as the processes work together, serving specific purposes to meet overall objectives (Becerra-Fernandez & Sabherwal, 2010:65). The various components of the KM solutions framework are discussed in more detail in the sections that follow.

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2.5 Knowledge management infrastructure

In the foundation, both KM mechanisms and KM technologies are enablers for the solutions and are built on KM infrastructure. In an organisational context, KM infrastructure includes five components: organisational culture, organisational structure, information technology infrastructure, common knowledge, and the physical environment (Becerra-Fernandez & Sabherwal, 2010:42).

2.5.1 Organisational culture

Organisational culture could be defined as “the underlying beliefs, values and principles that serve as a foundation for an organisation’s management system as well as the set of management practices and behaviours that both exemplify and reinforce those basic principles” (Denison, 1990). Another, more people-orientated definition describes organisational culture as a “monotonous set of values, beliefs, customs, traditions and stable methods transmitted by the members” (Huczynski & Buchanan, 2001) that affects these members’ behaviour.

Culture is a complex form of tacit knowledge, as it is determined by rarely discussed assumptions that guide employees’ actions (Rumizen, 2002). If it can be visually observed in an organisation, it is referred to as artefacts. Examples of artefacts include the content of bulletin boards, how people dress, how meetings are run, and how people greet each other. Another component of organisational culture is an organisation’s promoted values – i.e. the company’s declaration of what it believes. This may include its corporate vision and mission statements, strategies, code of conduct and content highlighted in advertising brochures (Schein, 2004).

Organisational culture affects all aspects of an organisation. This influence is seen in “individual behaviours, organisational performances, motivation, job satisfaction, creativity and innovation” (Robins & Judge, 2013). Jones (2005) believes that organisations need a formal KM programme to reach necessary profitability and require an enabling organisational culture to co-ordinate an effective KM effort. Thus, positive organisational culture is a key element in effective KM. Delong and Fahey (2000) found that about 80% of KM involves people and organisational culture, while the remaining 20% encompasses technologies. Many studies have shown that an organisation could not reach its purpose without an enabling organisational culture, even if its sole purpose was only to be profitable (Rahimnia & Alizade, 2009). It is thus vital to understand in what manner organisational culture influences KM. Shafee, Qaderzade and Lavee (2010) indicated the following four manners in which organisational culture can influence KM:

1. The role organisational culture plays in relation to knowledge identity and its importance for organisational management.

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2. The role played by culture to create a link between organisational knowledge and people. 3. Cultural patterns that dictate how knowledge is used in certain situations.

4. Process-making, legitimating and the spread of knowledge throughout an organisation. Despite the major influence of culture on organisational knowledge, it is commonly acknowledged that, of all organisations that attempt to implement KM, fewer than 10% succeed in incorporating it into their culture (Koudsi, 2000). In a KM practices survey, it was found that there are three significant barriers encountered in relation to KM in organisations: employees feel that there is no time for KM, the current organisational culture does not encourage knowledge sharing, and the importance of KM for an organisation is poorly understood (Dyer & McDonough, 2001). All these barriers can be traced back to organisational culture (Becerra-Fernandez & Sabherwal, 2010:43). The results of this survey reinforce the view that getting the members of an organisation to actively participate in KM is the hardest part of KM. This is detrimental, as an organisation that fails to create an enabling culture is destined to have its KM programme fail altogether (McDermott & O’Dell, 2001).

Organisational cultures, good or bad, are extremely stable. Changing even one single aspect of culture can be incredibly tough (Rumizen, 2002). It should therefore be the primary task of organisational leaders to develop, and actively reinforce, a strong and enabling organisational culture (Schein, 1983, 2004). It must be emphasised that organisational leaders are not restricted to executives but include all supervisors as well. An employee’s immediate supervisor has a substantial effect on that employee’s job satisfaction, and the supervisor must thus be part of the driving force behind an enabling culture (Rumizen, 2002). Characteristics that are found in enabling organisational cultures include: an understanding of the value of KM practices on all levels of the organisation, management endorsement of KM at all levels, and encouragement to collaborate so as to create and share knowledge (Armbrecht et al., 2001). Ahmady, Nikooravesh and Mehrpour (2016:394) suggest the following to cultivate an enabling organisational culture:

 Get management to acknowledge the critical role knowledge plays.

 Incentivise employees who demonstrate good performance and who are innovative and willing to take risks.

 Incentivise employees who actively share knowledge. This is important as Willmott (1993:515-516) believes that productivity and quality flow directly from corporate cultures that recognise and reward individuals materialistically and symbolically. Incentives must be awarded to knowledge sharers who were involved either directly or indirectly in a project, thereby stimulating cross-organisational knowledge sharing.

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 Encourage employees who possess vital knowledge to transfer their knowledge to others. Instil confidence in the organisation, thus putting at ease employees who fear that transferring their knowledge will make them less valuable to the organisation.

 Promote a supportive and friendly environment.  Emphasise the value of group work.

 Create a sense of loyalty to employees who possess critical knowledge to deter them from leaving the organisation.

 Acknowledge the activities and work of employees.

Incentivising should be practiced with caution, though, because organisations that emphasise individual performance excessively will encourage limited employee interaction. It will further result in business units’ hoarding information, where employees become afraid to ask questions, because their ignorance will then be revealed (Koudsi, 2000).

2.5.2 Organisational structure

The KM foundation also depends on the organisational structure. In the Business Dictionary, it is stated that organisational structure determines “the manner and extent to which roles, power, and responsibilities are delegated, controlled, and coordinated, and how information flows between levels of management”. According to the KM solutions framework, relevant aspects of the organisational structure include the hierarchical structure of the enterprise, specialised structures and roles and communities of practice (Becerra-Fernandez & Sabherwal, 2010:45). Because communities of practice are critical to the success of KM, they are discussed in greater detail later in this chapter.

2.5.2.1 Hierarchical structure

The hierarchical structure of any organisation affects the people with whom individuals frequently interact. The structure thus has a direct influence on the sharing of knowledge among employees of that organisation. It can therefore be said that reporting relationships influence the sharing and creation of knowledge. Organisations must therefore aim to be structurally decentralised or flat. The Business Dictionary explains that a decentralised structure is one where the decision-making power is distributed and business units and divisions have varying degrees of autonomy. This will ensure that more responsibility resides with each experienced leader, thus increasing the size of groups reporting to that individual. An emphasis on leadership, rather than management, will also stimulate knowledge sharing by blurring the traditional departmental boundaries (Becerra-Fernandez & Sabherwal, 2010:45).

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2.5.2.2 Specialised structures and roles

Organisational structures can also facilitate KM through official specialised structures and roles. A chief knowledge officer could be appointed to exclusively drive knowledge management in an organisation, or a dedicated KM department could be established. Another example of such a department is an organisation’s R&D department, which manages the enterprise’s latest knowledge. A corporate library is another example where the library supports business units by facilitating knowledge-sharing activities through ensuring that employees have access to curated knowledge repositories (Becerra-Fernandez & Sabherwal, 2010:46).

2.5.3 Information technology management and infrastructure

Organisations that are in the infant phase of KM may easily confuse KM with information management (IM). These organisations wrongly approach KM by heavily focusing their KM effort on information technology (IT). They see the structuring of data through capturing, codifying and storing it (Wilson, 2002) as a sufficient KM approach, thereby disregarding the value of human interaction completely. Even though IM is excluded from this study, understanding the differences between IM and KM is important to ensure that organisations spend their KM effort in the right areas. These main differences are highlighted in Table 2-1.

Table 2-1: Information management vs knowledge management (Hajric, 2019)

Information management Knowledge management

Data and information: Numbers and facts are structured and unstructured

Knowledge: Structured information, understanding wisdom

Technology: Driven by technology People: People-, process- and management-driven

Explicit: Articulated, well defined, easy to

identify and share Tacit: Unarticulated, hard to identify and share

Know what: Facts, statistics, etc. Know how: Action, experience and innovation

Easy to copy: Useful, but easy to replicate and with less substance

Hard to copy: More likely to lead to innovation, competitive advantage, etc.

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IT is required to successfully implement and sustain KM, however, and remains a crucial enabler. IT infrastructure includes data processing, storage and communication technologies and systems. The organisation is generally the IT department’s sole client. The department should therefore have a good understanding of what the organisations does and how that relates to its vision, business strategy, goals, competitors, customers, suppliers, partners, internal users and culture. The department must see itself as a key KM partner, providing a platform for KM to be implemented, used and sustained (Rumizen, 2002). IT enables KM by enhancing common knowledge and facilitating the four KM processes. This is achieved by providing KM technologies and mechanisms such as enterprise resource planning systems, intranets, artificial intelligence, expertise locator systems and other searchable knowledge repositories (Becerra-Fernandez & Sabherwal, 2010:47–48).

2.5.4 Common knowledge

Common knowledge is an organisation’s “cumulative experiences in comprehending a category of knowledge and activities and the organising principles that support communication and coordination” (Zander & Kogut, 1995). It provides unity and identity to individuals and their organisation, and includes a common language and vocabulary, recognition of individual knowledge domains, common cognitive schema, shared norms, and elements of specialised knowledge that are common across individuals sharing knowledge (Grant, 1996; Nahapiet & Ghoshal, 1998). It is that unique knowledge that was developed internally by the organisation for the organisation and is subsequently available only to the organisation. It trumps traditional knowledge sources such as books, courses or external expert knowledge, because all outside competitors have access to that knowledge. KM expert Nancy Dixon believes that common knowledge provides an organisation with a valuable competitive edge (Gehl, 2000). The transfer of this knowledge to individuals outside the organisation is detrimental to the company’s competitive edge and should therefore be avoided (Argote & Ingram, 2000).

2.5.5 Physical environment

Physical environments in the organisation must be structured in such a way that favourable conditions for KM is created. Facilities such as open-plan offices or meeting rooms must be available in the workspace for people to meet and share knowledge (Becerra-Fernandez & Sabherwal, 2010:49). Attention to the physical environment is not limited to the physical area where work is done alone: a study has shown that “most employees thought they gained most of their work-related knowledge, from informal conversations around water coolers or over meals rather than from formal training or manuals” (Wensley, 1998). Design practice firm Geyer undertook a study to better understand the role physical environment plays in KM. It was found

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that physical environmental elements must have purposeful thinking behind it (Chevez & Aznavoorian, 2014):

1. Time-saving: Spaces that foster learning by observation, such as open-plan layouts, create learning opportunities for co-employees. Colleagues can thus learn by observing those who do not necessarily have time to instruct them.

2. Organisational structure: Within the groupings of people connected through hierarchical structure, naturally constructed structures are formed. Knowledge is more easily transferred through naturally constructed structures, as opposed to top-down defined structures. To encourage the growth of natural structures, sufficient space and freedom must be given.

3. Mentoring: Found to be one of the primary vehicles of knowledge transfer, most mentor– learner relationships grew out of naturally growing relationships instead of deliberate pairing. Open physical spaces can help make these natural relationships occur more regularly.

4. Social environment: Knowledge was found to be far more likely to be transferred through social interaction than through technology. Technology is felt to be mostly a means to store data, although platforms such as blogs, social networking and videos were cited as emerging means to transfer knowledge. In cases where people are not physically in the same space, technology plays a crucial role in connecting people.

5. Trust: Research has shown that trust is a key element in KM. It helps to transform information into knowledge and enables the willingness to transfer knowledge. Casual spaces, such as the water cooler, remove formality and expectations and allow people to connect in a more relaxed manner, thus enabling them to gradually come to trust one another.

2.6 Communities of practice

In an organisation, knowledge must be recognised as a critical asset before it can be managed. In the past, the management of this critical asset was attempted primarily through the use of information systems (Gurteen, 2012). Organisations came to realise that simply structuring knowledge by capturing, codifying and storing it held little learning benefit (Wilson, 2002). Over time, they learned that a practical approach is needed to nurture, share and sustain knowledge as well (Hildreth & Kimble, 2002). Communities of practice (CoPs) allow for a new approach that highlights the importance of people and their social structures by placing them at the centre of learning.

Knowledge management within an organisation: A consulting engineering company as a case study