Organizational Impacts of

Knowledge Management

Chapter 4Presented by Kefaya Abdullah Sanarsquoa Nsour

11-april-2011

Chapter ObjectivesKey Questions

What various kinds of impact does knowledge

management have on organizations and organizational performancebull At what levels does the impact occur 1048714 People 1048714 Processes 1048714 Products 1048714 Overall performance

introduction

KM can impact organizations and organizational performance at several levels people processes product and the overall organization performance

Two main ways that KM processes can impact organization at theses four

levels

KM can help create knowledge which can then contribute to improved performance of organizations along these four dimensions

KM can directly cause improvement along these four dimensions

The impact at three of these dimensions individuals product and the organization

How Knowledge ManagementImpacts Organizations

Why Firms adopt KM

Retaining expertise of employees Enhancing customersrsquo satisfaction

with thecompanyrsquos products Increasing profits or revenues

Dimensions of OrganizationalImpacts of KM

People Processes Products Organizational Performance

Impact on People

bull KM can facilitate employee learning

bull KM also causes employees to become more

bull flexible and enhances their job satisfaction

How KM Impacts People

Employee Learning

Employee Adaptability

Employee Job Satisfaction

Impact on Employee Learning

This can be accomplished through

1 Externalization as the process of converting tacit knowledge in to explicit forms

eg writing a report on lessons learned from a projecthellip

Impact on Employee Learning

2 Internalization as the conversion of explicit knowledge into tacit knowledge

eg when employees preparing for a later project read it

Externalization and Internalization preparing a report on lessons learned from a project

Impact on Employee Learning

3 Socialization also helps individuals acquire knowledge but usually through joint activities such as meetings and informal conversations

eg through joint activities such as

meetings or informal chats

Impact on Employee Learning

4 Communities of practice as an organic and self-organized group of individuals

ie (recall) an organic and self-organized

group of individuals who are dispersed geographically or organizationally but

communicate regularly to discuss issues of mutual interest

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Chapter ObjectivesKey Questions

What various kinds of impact does knowledge

management have on organizations and organizational performancebull At what levels does the impact occur 1048714 People 1048714 Processes 1048714 Products 1048714 Overall performance

introduction

KM can impact organizations and organizational performance at several levels people processes product and the overall organization performance

Two main ways that KM processes can impact organization at theses four

levels

KM can help create knowledge which can then contribute to improved performance of organizations along these four dimensions

KM can directly cause improvement along these four dimensions

The impact at three of these dimensions individuals product and the organization

How Knowledge ManagementImpacts Organizations

Why Firms adopt KM

Retaining expertise of employees Enhancing customersrsquo satisfaction

with thecompanyrsquos products Increasing profits or revenues

Dimensions of OrganizationalImpacts of KM

People Processes Products Organizational Performance

Impact on People

bull KM can facilitate employee learning

bull KM also causes employees to become more

bull flexible and enhances their job satisfaction

How KM Impacts People

Employee Learning

Employee Adaptability

Employee Job Satisfaction

Impact on Employee Learning

This can be accomplished through

1 Externalization as the process of converting tacit knowledge in to explicit forms

eg writing a report on lessons learned from a projecthellip

Impact on Employee Learning

2 Internalization as the conversion of explicit knowledge into tacit knowledge

eg when employees preparing for a later project read it

Externalization and Internalization preparing a report on lessons learned from a project

Impact on Employee Learning

3 Socialization also helps individuals acquire knowledge but usually through joint activities such as meetings and informal conversations

eg through joint activities such as

meetings or informal chats

Impact on Employee Learning

4 Communities of practice as an organic and self-organized group of individuals

ie (recall) an organic and self-organized

group of individuals who are dispersed geographically or organizationally but

communicate regularly to discuss issues of mutual interest

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

introduction

KM can impact organizations and organizational performance at several levels people processes product and the overall organization performance

Two main ways that KM processes can impact organization at theses four

levels

KM can help create knowledge which can then contribute to improved performance of organizations along these four dimensions

KM can directly cause improvement along these four dimensions

The impact at three of these dimensions individuals product and the organization

How Knowledge ManagementImpacts Organizations

Why Firms adopt KM

Retaining expertise of employees Enhancing customersrsquo satisfaction

with thecompanyrsquos products Increasing profits or revenues

Dimensions of OrganizationalImpacts of KM

People Processes Products Organizational Performance

Impact on People

bull KM can facilitate employee learning

bull KM also causes employees to become more

bull flexible and enhances their job satisfaction

How KM Impacts People

Employee Learning

Employee Adaptability

Employee Job Satisfaction

Impact on Employee Learning

This can be accomplished through

1 Externalization as the process of converting tacit knowledge in to explicit forms

eg writing a report on lessons learned from a projecthellip

Impact on Employee Learning

2 Internalization as the conversion of explicit knowledge into tacit knowledge

eg when employees preparing for a later project read it

Externalization and Internalization preparing a report on lessons learned from a project

Impact on Employee Learning

3 Socialization also helps individuals acquire knowledge but usually through joint activities such as meetings and informal conversations

eg through joint activities such as

meetings or informal chats

Impact on Employee Learning

4 Communities of practice as an organic and self-organized group of individuals

ie (recall) an organic and self-organized

group of individuals who are dispersed geographically or organizationally but

communicate regularly to discuss issues of mutual interest

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Two main ways that KM processes can impact organization at theses four

levels

KM can help create knowledge which can then contribute to improved performance of organizations along these four dimensions

KM can directly cause improvement along these four dimensions

The impact at three of these dimensions individuals product and the organization

How Knowledge ManagementImpacts Organizations

Why Firms adopt KM

Retaining expertise of employees Enhancing customersrsquo satisfaction

with thecompanyrsquos products Increasing profits or revenues

Dimensions of OrganizationalImpacts of KM

People Processes Products Organizational Performance

Impact on People

bull KM can facilitate employee learning

bull KM also causes employees to become more

bull flexible and enhances their job satisfaction

How KM Impacts People

Employee Learning

Employee Adaptability

Employee Job Satisfaction

Impact on Employee Learning

This can be accomplished through

1 Externalization as the process of converting tacit knowledge in to explicit forms

eg writing a report on lessons learned from a projecthellip

Impact on Employee Learning

2 Internalization as the conversion of explicit knowledge into tacit knowledge

eg when employees preparing for a later project read it

Externalization and Internalization preparing a report on lessons learned from a project

Impact on Employee Learning

3 Socialization also helps individuals acquire knowledge but usually through joint activities such as meetings and informal conversations

eg through joint activities such as

meetings or informal chats

Impact on Employee Learning

4 Communities of practice as an organic and self-organized group of individuals

ie (recall) an organic and self-organized

group of individuals who are dispersed geographically or organizationally but

communicate regularly to discuss issues of mutual interest

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

How Knowledge ManagementImpacts Organizations

Why Firms adopt KM

Retaining expertise of employees Enhancing customersrsquo satisfaction

with thecompanyrsquos products Increasing profits or revenues

Dimensions of OrganizationalImpacts of KM

People Processes Products Organizational Performance

Impact on People

bull KM can facilitate employee learning

bull KM also causes employees to become more

bull flexible and enhances their job satisfaction

How KM Impacts People

Employee Learning

Employee Adaptability

Employee Job Satisfaction

Impact on Employee Learning

This can be accomplished through

1 Externalization as the process of converting tacit knowledge in to explicit forms

eg writing a report on lessons learned from a projecthellip

Impact on Employee Learning

2 Internalization as the conversion of explicit knowledge into tacit knowledge

eg when employees preparing for a later project read it

Externalization and Internalization preparing a report on lessons learned from a project

Impact on Employee Learning

3 Socialization also helps individuals acquire knowledge but usually through joint activities such as meetings and informal conversations

eg through joint activities such as

meetings or informal chats

Impact on Employee Learning

4 Communities of practice as an organic and self-organized group of individuals

ie (recall) an organic and self-organized

group of individuals who are dispersed geographically or organizationally but

communicate regularly to discuss issues of mutual interest

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Why Firms adopt KM

Retaining expertise of employees Enhancing customersrsquo satisfaction

with thecompanyrsquos products Increasing profits or revenues

Dimensions of OrganizationalImpacts of KM

People Processes Products Organizational Performance

Impact on People

bull KM can facilitate employee learning

bull KM also causes employees to become more

bull flexible and enhances their job satisfaction

How KM Impacts People

Employee Learning

Employee Adaptability

Employee Job Satisfaction

Impact on Employee Learning

This can be accomplished through

1 Externalization as the process of converting tacit knowledge in to explicit forms

eg writing a report on lessons learned from a projecthellip

Impact on Employee Learning

2 Internalization as the conversion of explicit knowledge into tacit knowledge

eg when employees preparing for a later project read it

Externalization and Internalization preparing a report on lessons learned from a project

Impact on Employee Learning

3 Socialization also helps individuals acquire knowledge but usually through joint activities such as meetings and informal conversations

eg through joint activities such as

meetings or informal chats

Impact on Employee Learning

4 Communities of practice as an organic and self-organized group of individuals

ie (recall) an organic and self-organized

group of individuals who are dispersed geographically or organizationally but

communicate regularly to discuss issues of mutual interest

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Dimensions of OrganizationalImpacts of KM

People Processes Products Organizational Performance

Impact on People

bull KM can facilitate employee learning

bull KM also causes employees to become more

bull flexible and enhances their job satisfaction

How KM Impacts People

Employee Learning

Employee Adaptability

Employee Job Satisfaction

Impact on Employee Learning

This can be accomplished through

1 Externalization as the process of converting tacit knowledge in to explicit forms

eg writing a report on lessons learned from a projecthellip

Impact on Employee Learning

2 Internalization as the conversion of explicit knowledge into tacit knowledge

eg when employees preparing for a later project read it

Externalization and Internalization preparing a report on lessons learned from a project

Impact on Employee Learning

3 Socialization also helps individuals acquire knowledge but usually through joint activities such as meetings and informal conversations

eg through joint activities such as

meetings or informal chats

Impact on Employee Learning

4 Communities of practice as an organic and self-organized group of individuals

ie (recall) an organic and self-organized

group of individuals who are dispersed geographically or organizationally but

communicate regularly to discuss issues of mutual interest

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact on People

bull KM can facilitate employee learning

bull KM also causes employees to become more

bull flexible and enhances their job satisfaction

How KM Impacts People

Employee Learning

Employee Adaptability

Employee Job Satisfaction

Impact on Employee Learning

This can be accomplished through

1 Externalization as the process of converting tacit knowledge in to explicit forms

eg writing a report on lessons learned from a projecthellip

Impact on Employee Learning

2 Internalization as the conversion of explicit knowledge into tacit knowledge

eg when employees preparing for a later project read it

Externalization and Internalization preparing a report on lessons learned from a project

Impact on Employee Learning

3 Socialization also helps individuals acquire knowledge but usually through joint activities such as meetings and informal conversations

eg through joint activities such as

meetings or informal chats

Impact on Employee Learning

4 Communities of practice as an organic and self-organized group of individuals

ie (recall) an organic and self-organized

group of individuals who are dispersed geographically or organizationally but

communicate regularly to discuss issues of mutual interest

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

How KM Impacts People

Employee Learning

Employee Adaptability

Employee Job Satisfaction

Impact on Employee Learning

This can be accomplished through

1 Externalization as the process of converting tacit knowledge in to explicit forms

eg writing a report on lessons learned from a projecthellip

Impact on Employee Learning

2 Internalization as the conversion of explicit knowledge into tacit knowledge

eg when employees preparing for a later project read it

Externalization and Internalization preparing a report on lessons learned from a project

Impact on Employee Learning

3 Socialization also helps individuals acquire knowledge but usually through joint activities such as meetings and informal conversations

eg through joint activities such as

meetings or informal chats

Impact on Employee Learning

4 Communities of practice as an organic and self-organized group of individuals

ie (recall) an organic and self-organized

group of individuals who are dispersed geographically or organizationally but

communicate regularly to discuss issues of mutual interest

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact on Employee Learning

This can be accomplished through

1 Externalization as the process of converting tacit knowledge in to explicit forms

eg writing a report on lessons learned from a projecthellip

Impact on Employee Learning

2 Internalization as the conversion of explicit knowledge into tacit knowledge

eg when employees preparing for a later project read it

Externalization and Internalization preparing a report on lessons learned from a project

Impact on Employee Learning

3 Socialization also helps individuals acquire knowledge but usually through joint activities such as meetings and informal conversations

eg through joint activities such as

meetings or informal chats

Impact on Employee Learning

4 Communities of practice as an organic and self-organized group of individuals

ie (recall) an organic and self-organized

group of individuals who are dispersed geographically or organizationally but

communicate regularly to discuss issues of mutual interest

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact on Employee Learning

2 Internalization as the conversion of explicit knowledge into tacit knowledge

eg when employees preparing for a later project read it

Externalization and Internalization preparing a report on lessons learned from a project

Impact on Employee Learning

3 Socialization also helps individuals acquire knowledge but usually through joint activities such as meetings and informal conversations

eg through joint activities such as

meetings or informal chats

Impact on Employee Learning

4 Communities of practice as an organic and self-organized group of individuals

ie (recall) an organic and self-organized

group of individuals who are dispersed geographically or organizationally but

communicate regularly to discuss issues of mutual interest

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact on Employee Learning

3 Socialization also helps individuals acquire knowledge but usually through joint activities such as meetings and informal conversations

eg through joint activities such as

meetings or informal chats

Impact on Employee Learning

4 Communities of practice as an organic and self-organized group of individuals

ie (recall) an organic and self-organized

group of individuals who are dispersed geographically or organizationally but

communicate regularly to discuss issues of mutual interest

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact on Employee Learning

4 Communities of practice as an organic and self-organized group of individuals

ie (recall) an organic and self-organized

group of individuals who are dispersed geographically or organizationally but

communicate regularly to discuss issues of mutual interest

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Xerox case studyCommunities of Practice

The corporation accomplished such individual learning through a strategic community of practice

The corporation included geographically distributed individuals from the head office as well as business units

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Case study Communities of Practice on Xerox (cont)

This group was somewhat different from a traditional community of practice because it was not voluntarily formed by the individuals but was instead deliberately established by top management at company with the goal of providing strategic benefits through knowledge sharing

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

bull Focus area management of technology infrastructure

bull Membership large group of IT professionals1048714 Provided leading-edge solutions1048714 Addressed unstructured problems1048714 Stayed in touch with latest developments

bull About 23 of the COPrsquos value resulted from face-to-face networking at the grouprsquos meetings

This attention to KM by focusing on informal groups of employees has helped Xerox in its global services push

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Case study Communities of Practice on Xerox (cont)

ldquoIt is about understanding where knowledge is and how it is found By working with human elements of this there are real things you can do to help people embrace the technology and incorporate it into the workflowrdquo

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Case study Communities of Practice on Xerox (cont)

ldquoAt the core of Xeroxrsquos heritage of innovation is a deep understanding of how people processes and technology interact with each other in the creation of great work

As a result our practical results-oriented knowledge management solutions can help businesses streamline work processes enable better customer service and grow revenuerdquo

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact on EmployeeAdaptability

When the KM process at an organization encourages its employees to continually learn from each other

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

bull Employees are likely to adapt when they interact

with each otherbull They are more likely to accept changebull They are more prepared to respond to

changehellip1048714 hellip and less likely to be caught by

surprise

Impact on Employee Adaptability

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact on Employee JobSatisfaction (1)

Two benefits of KM that accrue directly to individual employees have been discussed above

1 They are able to learn better than employees in firms that are lacking in KM

2 They are better prepared for change

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact on Employee JobSatisfaction (1)

bull Recent study found that in organizations havingmore employees sharing knowledge with oneanother turnover rates were reduced therebypositively affecting revenue and profit

bull Employees feel better because of theirknowledge acquisition and skill enhancement

bull Employeesrsquo market value is enhanced relative to

other organizationsrsquo employees

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact on Employee JobSatisfaction (2)

bull KM also provides employees with solutions toproblems they face in case those sameproblems have been encountered earlier andeffectively addressed

bull Providing tried-and-tested solutions (eg via thedirection mechanism) amplifies employeesrsquoeffectiveness in performing their jobs

bull Also helps keep employees motivated1048714 Employees facing problems in performing their jobrapidly become de motivated

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact on Employee JobSatisfaction (3)

bull Additional increases in employee job satisfaction

derive from KM practices

1048714 Mentoring and training are excellent motivators

1048714 Communities of Practice provide intimate and socially validated control over their own work practices

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Dimensions of organizational impact of KM

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact on process

Knowledge management is an important factor to the effectiveness of organizational process such as marketing manufacturing accounting engineering public relations etc

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

1- what three dimensions are relevant for examining the impact of KM on business process

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

The impact of KM can be seen along

through major dimensions

Effectiveness is performing the most suitable

processes and making the best possible Decisions

Efficiency is performing the processes quicklyand in a low-cost fashion

Innovation is performing the processes in a creative and novel fashion that improves effectiveness and efficiency

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

process effectiveness

KM can enable organizations to become more effective by helping them to select and perform the most appropriate processes

Process effectiveness poor KM can result in mistakes by the organization because they risk repeating past mistakes or not foreseeing otherwise obvious problems

Organizations lacking in KM find it difficult to maintain process effectiveness when faced with turnover of experienced and new employees

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Process efficiency

KM can enable organizations to be more productive and efficient The ability to effectively create and manage network-level knowledge sharing processes results in productivity advantages enjoyed by the organization

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Processes Innovation

bull Organizations can increasingly rely on knowledgeshared across individuals to produce innovative

solutionsto problems as well as to develop more innovativeorganizational processes

bull KM has been found to enable riskier brainstorming thus enhancing process innovation

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

3- describe how KM can contribute to an organizationrsquos products

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact onValue-Added Products

With the aid of KM processes organizations can offer new products or improved products that provide a significant additional value as compared to earlier products

value-added products also benefit from KM due to the effect the latter has on organizational process innovation

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact onKnowledge-Based Products

bull KM can have a significant impact on products that are knowledge based eg

consulting software development

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impact onKnowledge-Based Products

bull Knowledge based products can sometimes play a significant role in traditional manufacturing firms too

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

How Knowledge Management Impacts Organizational Performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Impacts on OrganizationalPerformance

bull ldquoIdeas are capital The rest is just moneyrdquo

Reflects the belief that investments in KM should be viewed as capital investments ndash to produce long-term benefits to the entire organization ndashinstead of assets providing value only at the present time

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

4- How can we assess the direct impact of KM on organizational performance

Occurs when Knowledge is used to create innovative products that generate revenue and profit

In theory relatively straightforward to measure in terms of improvements in ROI (return on investment)

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

5- Describe the ways in which the indirect impacts of KM in an org may

be observed

Use of KM to demonstrate intellectual leadershipwithin the industry which in turn might enhancecustomer loyalty Use of knowledge to gain an advantageousnegotiating position with respect to competitors orpartner organizations Unlike direct impact cannot be directly associated with

transactions and therefore cannot be easily measured

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Economy of Scalebull A companyrsquos output is said to exhibit economy of

scale if the average cost of production per unit decreases with increase in output

bull Reasons

Large setup cost making low-scale productionuneconomic Possibilities for specialization invrease as productionincreases Greater likelihood of discounts from suppliers whenproduction is large-scale

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Economy of Scopebull A companyrsquos output is said to exhibit economy of scope

when the total cost of that same company producing two or more different products is less than the sum of the costs that would be incurred

if each product had been produced separately by a different company

Reasons1048714 Joint use of production facilities1048714 Joint use of marketing1048714 Joint use of administration1048714 Joint use of distribution channels

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Indirect Impacts on Economyof Scale and Scope

bull KM can contribute to economies of scale and scope 1048714 By improving the organizationrsquos ability to create and leverageknowledge related to products customers and managerial resources

across businesses

1048714 By enabling sharing of products designs components manufacturing processes and expertise across businesses ndashthus reducing development and manufacturing costs accelerating new product development and supporting quick response to new market opportunities

1048714 By enabling cross-selling of existing products or development ofnew products by sharing knowledge of customer preferencesneeds and buying behaviors

1048714 By enabling the deployment of general marketing skills and salesforces across businesses

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Indirect Impacts on SustainableCompetitive Advantage

bull Knowledge can enable an organization to develop and exploit other tangible and intangible resources better than the competitors can

1048714 Even when the resources might not be uniquebull Knowledge (especially context-specific tacit knowledge)tends to be unique and therefore difficult to imitate

1048714 Unlike most traditional resources knowledge cannot easily bepurchased in a ready-to-use formbull To obtain similar knowledge competitors have toengage in similar experiences

1048714 But obtaining knowledge through experience takes timebull So competitors are limited in the extent to which theycan accelerate their learning through greater investment

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

How Knowledge ManagementImpacts Organizations

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance

Exercises Identify the possible ways in which KM in your

academic institution affects your learning and job satisfaction

You are a CEO who considers implementing KM system to your company You have to decide one option out of two

1) our KM system can be accessed by customers 2) our KM system cannot be accessed by

customers Describe your decision and provide the reason in terms of organizational performance