Knowledge Management at SMEs

1
Knowledge Management at SMEs

• Yukika Awazu1
• Kevin C. Desouza1,2
• Institute for Engaged Business Research, The
  Engaged Enterprise1
• Dept. of Information Decision Sciences,
  University of Illinois at Chicago2

2
Introduction

• Managing knowledge is a critical capability for
  SMEs to master because it helps them leverage
  their most critical resource.
• Organizational knowledge is the most salient
  resource at the disposal of SMEs in terms of
  availability, access, and depth.
• Successful SMEs are those who can leverage their
  knowledge in an effective and efficient manner,
  so as to make up for deficiencies in traditional
  resources, like land, labor, and capital.
• In our research, we discovered that SMEs do not
  manage knowledge the same way as larger
  organizations.
• We draw our findings from a nine month
  investigation of knowledge management practices
  at 25 SMEs.

3
1 Dominance of Socialization in the SECI Cycle

• SECI Cycle (Nonaka et al. 1995 )
• Knowledge creating cycle comprises of four
  activities socialization, externalization,
  combination, and internalization (SECI).
• In SMEs we found the presence of SECI model - a
  variant of the SECI model
• Socialization was the predominant way through
  which knowledge transfer occurred from owner to
  employees and between employees.

4
2 Common Knowledge

• In SMEs, each employee is given a deep
  introduction into the way the SME conducts
  business.
• Facilitates ease of communication and
  sensemaking.
• Forms a shared context for interpretation and
  communication.
• Emphasized by training initiatives
• Results in each employee had very similar
  foundation and grounding in organizational
  matters.
• In larger organizations, for the most part,
  employees have scant common knowledge due to
  excessive specialization of duties and
  distributed nature of work assignments.

5
3 Knowledge Loss Not a Problem

• SMEs never considered it a real problem or issue.
• The core knowledge is held by the owner/managers
  of the organization.
• Deliberate mechanisms in place to prevent
  knowledge loss from becoming a problem.
• Promotions from within the Organization
• Backups in terms of Knowledge Work
• Presence of Common Knowledge

6
4 Exploitation of External Sources of Knowledge

• Appetite and ability to exploit foreign sources
  of knowledge
• Utilization of ready-made knowledge of external
  sources
• Well-connected to local communities
• Reason SMEs cannot afford to invest resources in
  the creation of new knowledge, as they are
  starved for resources, especially during the
  initial conception and growth stages.

7
5 People Centered Knowledge Management

• Technology is almost never used as a central
  means to manage knowledge.
• Knowledge is created, shared, transferred, and
  applied via people based mechanisms such as
  face-to-face meetings, observations,
  apprenticeship, etc.
• Knowledge generated is immediately put into
  practice, rather than being stored in some
  obscure technology artifact, like an electronic
  repository, e.g. Intranet Portal.

8
6 Managing Ignorance

• SMEs are normally quick to admit ignorance areas
  they lack competency in.
• Not afraid to call experts to help them gain
  knowledge in areas of ignorance.
• This is important as SMEs cannot afford to spare
  resources on risky, unknown, or futile
  projects. They do extensive homework before
  committing, one aspect being checking if they
  have the requisite knowledge.

9
7 Knowledge Management or Management by
Knowledge

• Focus on management by knowledge, i.e.
  knowledge guides all management efforts.
• Unlike with larger organizations, knowledge is
  the key asset that drives most actions, the
  weight placed on other assets, like financial
  capital, is significantly lower.

10
Conclusion

• Viewing SME knowledge management practices as
  scaled down versions of the practices found in
  larger organizations is incorrect.
• SMEs have understandable resource constraints,
  and hence have to be creative in working around
  these limitations in order to manage knowledge.
• Our goal of this presentation is to shed a light
  on peculiarities in SME knowledge management
  practices, with the hope of enticing scholars and
  practitioners to follow-up with more detailed
  research undertakings.
• Future Research Avenues 1 Write-up detailed
  case studies, 2 Link SME knowledge capabilities
  with organizational success outcomes, 3 Develop
  a metric to study knowledge process maturity in
  SMEs and use it to conduct gap analyses, and
  4 Data permitting, study how knowledge programs
  get transformed as SMEs expand or transform
  themselves to larger organizations.

11
Questions?

• Contact Information
• Yukika Awazu
• Research Fellow
• Institute for Engaged Business Research
• The Engaged Enterprise
• E-mail awazu_at_engagedenterprise.com
• Website www.engagedenterprise.com
• Please email us for a copy of the research paper.