Knowledge Transfer in Times of Organizational Crisis

1
Knowledge Transfer in Times of Organizational
Crisis

• Presenter
• Wei-Tsong Wang

2
Overview (1/2)

• Introduction to crisis management
• Introduction to knowledge management and
  organizational learning
• Knowledge management matrix

3
Overview (2/2)

• Introduction to a research project related to
  knowledge transfer during crises
• Knowledge transfer and crisis management
• Research methods (case study and system dynamics)
• Research findings
• Conclusion
• Q A

4
Decay of Organizations

• Average age of a firm is 18 years (Scholl, 2002)
• Why do some organizations manage to survive for
  hundreds of years while some do not?
• Inability of organizations to properly respond to
  the crises encountered is one major reason

5
What is a Crisis (1/2)

• An crisis is a (Pearson Clair, 1998)
• Low frequency event
• Difficult to learn about them
• High consequence event
• Need to make proper strategic choices in order to
  ensure the performance of crisis management, and
  in turn ensure firm survival

6
What is a Crisis (2/2)

• A crisis can be distinguished by
• Its sets of characteristics
• Its types
• Its decomposition into a set of sequential phases

7
Difficulty in Learning about Crises

• Low frequency of crises
• The next crisis is not likely to be similar to
  any of the previous ones.
• Organizations are unwilling to share their crisis
  experiences with others
• Limited opportunities and materials to learn
  about crises

8
Key Learning Mechanisms

• The learning mechanisms organizations need in
  dealing with crises must include
• Structured learning processes
• Continuous learning processes
• Learning from parallels
• Learn from other domain for solutions when short
  of information in the target domain
• Learn from parallels in the area of natural
  hazards (Chengalur-Smith et al., 1999 Mitroff,
  1994)

9
What is a Learning Organization

• Learning organizations are organizations where
  people continually expand their capacity to
  create the results they truly desire, where new
  and expansive patterns of thinking are nurtured,
  where collective aspirations are set free, and
  where people are learning how to learn together.
  (Senge, 1990)

10
Knowledge Management Learning Organizations

• Belardo and Belardo (2002) stated
• Be a learning organization is necessary for
  survival due to the rapidly changing environment
• Protecting and managing an organizations
  intellectual capital is prerequisite to be a
  learning organization
• Knowledge management can be viewed as a process
  to manage intellectual capital

11
Main KM Processes (1/6)

• Belardo and Belardo (2002) identify four main KM
  processes
• Identification
• Elicitation
• Dissemination
• Utilization

12
Main KM Processes (2/6)

• Identification
• Macro perspective
• Micro perspective

13
Main KM Processes (3/6)

• Elicitation
• Someones explicit or tacit knowledge must be
  elicited, represented , and then communicated to
  a receiver who must then accommodate it (Nonaka
  Takeuchi, 1995).
• Codification Personalization (Hansen et al.,
  1999)
• Codification Capture explicit knowledge in
  documents or some forms of repositories.
• Personalization Create yellow pages of
  knowledge owners.

14
Main KM Processes (4/6)

• Dissemination
• As Processes
• Pull Model Knowledge is pulled by the users
• Push Model Knowledge is pushed out to
  prospective users by knowledge owners or
  collectors
• As Portals Personalized single
  points-of-access to multiple information/knowledge
  

15
Main KM Processes (5/6)

• Dissemination
• As Strategies (Hansen et al., 1999)
• Codification
• External knowledge repository
• Structured internal knowledge repository
• Informal internal knowledge repository (Davenport
  et al., 1998)
• Personalization
• Providing access to knowledge or facilitating
  its transfer among individuals.

16
Main KM Processes (6/6)

• Utilization
• Knowledge must be used correctly to be valuable
• Some indicators to evaluate knowledge
  utilization
• Product development
• Customer relationship management
• Operational efficiency

17
The Knowledge Management Enablers (1/4)

• The main knowledge management enablers (KSF)
  include (Belardo and Belardo, 2002 Davenport et
  al., 1998)
• Technology
• Measurement
• Leadership and Culture

17
18
The Knowledge Management Enablers (2/4)

• Technology
• True knowledge management tools are not data or
  information management tools with a new slant
• Must be able to facilitate 4 knowledge processes

18
19
The Knowledge Management Enablers (3/4)

• Measurement
• Traditional accounting methods cannot help
  measuring values of knowledge
• Evaluate knowledge in terms of what is the
  improvement of employees capability to adapt to
  a changing environment

20
The Knowledge Management Enabler (4/4)

• Leadership and culture
• Establish trust among all members within an
  organization through leadership
• Create a culture that supports individual and
  organization-wide learning and knowledge sharing
  through leadership

21
The Knowledge Management Matrix

• Knowledge management Process

Source Belardo and Belardo, 2002
22
Knowledge Transfer (1/2)

• A key to understand (KM) phenomena relies on
  identifying and explaining knowledge manipulation
  activities organizations perform in dealing with
  their knowledge (Holsapple and Joshi, 2002)
• Among these KM processes, knowledge transfer has
  been recognized as one of the most important
  managerial issues of KM (Shin et al., 2001).

23
Knowledge Transfer (2/2)

• Knowledge transfer occurs, anywhere at anytime,
  on various levels among individuals, groups, and
  organizations
• knowledge transfer is often investigated by
  incorporating the concern of knowledge flows
• Types of knowledge being transferred
• Locations/entities among which the knowledge is
  transferred

24
Knowledge Transfer and Crisis Management (1/2)

• Organizations readiness and/or vulnerability to
  its crises can be examined according to various
  management-related perspectives
• A major challenges in CM is to rapidly identify
  knowledge owners and present the knowledge to
  employees
• The importance of having adequate knowledge
  transfer mechanisms during crises tends to be
  ignored

25
Knowledge Transfer and Crisis Management (2/2)

• Very little systematic investigation into the
  relationships between knowledge transfer and
  organizational crises has so far been attempted
• Lack of such research would hinder organizations
  from making the best use of their knowledge and
  then achieve their desired performance during
  crises
• This study specifically aims to examine this issue

26
Research Methodology (1/3)

• In-depth case study is adopted
• System dynamics modeling is used as a
  supplementary research tool
• A crisis of massive product recall of the
  subsidiary of a leading Japanese motorcycle
  manufacturer in Taiwan was selected as the case
  analyzed

27
Research Methodology (2/3)

• Data for this study was collected from multiple
  sources in order to achieve data triangulation
• Organizational documents
• Newspaper and journal reports
• Archival data from external sources
• Personal interviews
• Pattern matching is used for data analysis to
  ensure internal validity

28
Research Methodology (3/3)

• Three key characteristics of organizational
  crisis are identified to be used as coding
  schemes
• Probability
• The degree to which an organization is exposed to
  a crisis
• Impact
• The scope in which the damage of a specific
  crisis can possibly last either inside or outside
  an organization
• Predictability
• The degree to which a crisis can be anticipated
  by an organization

29
System Dynamics (1/2)

• Originated from the applications of engineering
  control system as well as the theory of
  information feedback systems (Morecroft, 1988).
• In 1956, Forrester (1961) redesigned an
  originally engineering control system approach
  into an analysis methodology for investigating
  the dynamics of social contexts.
• A computer-aided approach to policy development
  and analysis (Richardson, 1996).

30
System Dynamics (2/2)

• Stermans (2000) definition of System Dynamics
• System dynamics is a method to enhance learning
  in complex systems. Just as an airline uses
  flight simulators to help pilots learn, system
  dynamics is, partly, a method for developing
  management flight simulators, often computer
  simulation models, to help us learn about the
  dynamic complexity, understand the sources of
  policy resistance, and design more effective
  policies. (p. 4)

31
Example of System Dynamics Problems

• How can we control the In-migration ratio and
  the Out-migration ratios in order to keep the
  population of a city at a particular level for
  the next 10 years?

32
Key Concepts of System Dynamics

• Policy/Decision Making analysis for complex
  social systems.
• System Thinking
• Feedback (Causal-loop) Structure
• Stock and Flow Structure

33
Policy/Decision Making Analysis

• What options/policies do we have on dealing with
  a particular social problem?
• What is the result of the social system of
  interest in response to a particular policy and
  why? Is it the result we are expecting?
• What would be the best policy we can employ in
  the social system of interest?

34
Systems Thinking

• A social context is a system with components
  (influencing factors) and sub-systems
• Seeing interrelationships among systems
  rather than linear cause-and-effect chains when
  events occur
• Seeing processes of change among systems
  rather than discrete snapshots of change,
  whenever change occurs.

35
Feedback/Causal-loop Structure (1/4)

• Represented by causal-loop structures inside a
  system
• A causal-loop structure implies a set of circular
  cause and effect relationships among a set of
  factors (Weick, 1979)
• Two types of causal-loop structures
• Reinforcing loops (a.k.a R or positive loops)
• Balancing loops (a.k.a. B or negative loops)

36
Feedback/Causal-loop Structure (2/4)

• Reinforcing loops Destabilizing,
  disequilibrating, growth producing, or
  self-reinforcing (Richardson Pugh, 1981, p. 4)

37
Feedback/Causal-loop Structure (3/4)

• Balancing loops Self-governing,
  self-regulating, self-equilibrating.. all
  implying the presence of a goal.. (Goodman
  1989, p. 37)

38
Feedback/Causal-loop Structure (4/4)
39
Stock and Flow Structure (1/4)

• Stocks are accumulations
• e.g. Inventory of a product Number of people
  employed by a company
• A stock is altered by its inflow(s) and
  outflow(s)
• Inflows add to the accumulation of a stock
• Outflows reduce to the accumulation of a stock

40
Stock and Flow Structure (2/4)

• Stocks are represented by rectangles
• Inflows are represented by a pipe (arrow)
  pointing into (adding to) a stock
• Outflows are represented by a pipe (arrow)
  pointing out of (subtracting from) a stock
• Valves regulates amount flowing in or out
• Clouds represent the sources and sinks of the
  flows

41
Stock and Flow Structure (3/4)
42
Stock and Flow Structure (4/4)
43
Stock Flow Structure v.s. Feedback Structure

• Feedback Structure
• Maps the causal relationships among factors in a
  system
• Stock Flow Structure
• Not only maps the causal relationships among
  factors, but also display the concept of
  accumulation of key factors, which are referred
  as stocks, in a system
• The full model that are used to actually perform
  computer simulations

44
Background of the Crisis

• A subsidiary of a Japanese motorcycle
  manufacturer in Taiwan (UMTC)
• The recall event regarding an UMTCs moped model
  called RTG
• The deformed handles and bottom frames of RTGs
  due to design flaws of UMTC
• UMTCs public image was suffered, and the company
  frequently receiving complaints from its key
  stakeholders

45
Research Results

• Identify 3 main paths through which knowledge was
  transferred among individuals during the crisis
• Communities of practice
• Documentation
• Apprenticeship (Mentoring system)

46
Research Propositions (1/10)

• Proposition 1
• The functioning of communities of practice
  enables organizations to identify and resolve
  organizational threats, and, in turn, reduces the
  probability of the occurrence of organizational
  crises

47
Research Propositions (2/10)
48
Research Propositions (3/10)

• Proposition 2
• The functioning of communities of practice
  enables organizations to identify and resolve
  organizational problems in a more efficient
  manner, and, in turn, reduces the impact of
  organizational crises

49
Research Propositions (4/10)
50
Research Propositions (5/10)

• Proposition 3
• The use of documentation enables organizations to
  detect the warning signals of potential crises in
  a timely manner and, in turn, increase the
  predictability of organizational crises

51
Research Propositions (6/10)
52
Research Propositions (7/10)

• Proposition 4
• The use of documentation enables organizations to
  minimize the time needed to resolve the problems
  and minimize the negative effects caused by
  organizational crises, and, in turn, reduces the
  impact of them

53
Research Propositions (8/10)
54
Research Propositions (9/10)

• Proposition 5
• The application of the mentoring system enables
  organizations to minimize the time needed to
  resolve the problems and minimize the negative
  effects caused by organizational crises, and, in
  turn, reduces the impact of them

55
Research Propositions (10/10)
56
Research Implications (1/2)
57
Research Implications (2/2)
58
Future Research Directions

• More cases, or even empirical studies, in order
  to improve the generalizability of the findings
• What the factors that drive the knowledge
  transfer practices during crises
• How are these knowledge transfer practices
  affected by managerial behaviors (e.g.,
  leadership)

59
Successful KM

• Let go of the past
• Prepare people for even more change
• Keep the system in a constant state of tension
• Manage both the long term as well as the short
  term order as well as disorder
• Create and maintain a learning culture

60
Reference (1/2)

• Chengalur-Smith, I., Belardo, S., Pazer, H.
  (1999). Adopting a disaster-management-based
  contingency model to the problem of ad hoc
  forecasting Toward information technology-based
  strategies. IEEE Transactions on Engineering
  Management, 46(2), 210-220.
• Davenport, T. H., De Long, D. W., Beers, M. C.
  (1998). Successful knowledge management projects.
  MIT Sloan Management Review, 39(2), 43-57.
• Hansen, M. T., Nohria, N., Tierney, T. (1999).
  What's your strategy for managing knowledge?
  Harvard Business Review, 77(2), 106 - 116.
• Holsapple, C. W. Joshi, K. D. (2002). Knowledge
  management A threefold framework. The
  Information Society, 18(1), 47-64.
• Mitroff, I. I. (1994). Crisis management and
  environmentalism A natural fit. California
  Management Review, 36(2), 101 113.
• Nonaka, I. Takeuchi, (1995). The knowledge
  creation company. Oxford, UK Oxford University
  Press.
• Pearson, C. M. Clair, J. A. (1998). Reframing
  crisis management. Academy of Management Review,
  23(1), 59-76.

61
Reference (2/2)

• Scholl, J. (2002). Firm survival A theory
  integration study. Unpublished Dissertation,
  University at Albany, SUNY, Albany, NY, USA.
• Senge, P. (1990). The leader's new work Building
  learning organizations. MIT Sloan Management
  Review, 32(1), 7-23.
• Shin, M., Holden, T., Schmidt, R. A. (2001).
  From knowledge theory to management practice
  Towards an integrated approach. Information
  Processing and Management, 37(2), 335-355.