MGMT630 Official Handouts

Lesson · TOPICS · Page

Forces shaping the future and mega trends of knowledge economy …………………… Managerial Considerations for Internet Customers and K-Based Marketing Framework with New Structure, Strategies and Levers of Strategy Historical Shifts in World Economies and the Role of Knowledge and Intelligence Strategic Corporate Assets of 3rd Millennium Organization; Knowledge Characteristics Perspectives of Knowledge Management and the Forces Driving KM Knowledge Hierarchy …From Data and Information to Knowledge and Wisdom Extracting Gold From Data; Understanding Conversion of Data into Knowledge Understanding Data for Analysis and Decision/Policy Making Knowledge Hierarchy… Individual vs. Organization Dimensions of Human Knowledge, Tree of Knowledge Dimensions of And Multiple Views of KM in Organizations How KM Impacts Organizations? Three Schools of Thought and Approaches to KM; Economic School and KVA Economic School: Management and Knowledge Metrics Measures of Intellectual Capital Knowledge Market Model and KVA Case Study Sveiby’s Intelligent Capital Management Strategic Perspective of Knowledge and Strategic School Approach in KM Strategic School: Stock, Flow, and Growth Strategy in KM The Organizational School of Thought in KM Importance of Tacit and Explicit Knowledge SECI Process and BA for K. Creation Knowledge Spiral and Sustained Organizational Advantages Through SECI Process Enablers of SECI Process Process Approach to KM and Info-Com Technology (ICT) in KM Systems Organizational Issues in Managing Knowledge Worker Overview of KM Solutions and Processes KM Systems, Solutions, and Infrastructure Knowledge Architecture, Internet and E-World Corporate Intranet, Extranet, and Portal KM Systems and Technical Layers KM System and Life Cycle Approach: Conventional vs. KM KM System Justification and Feasibility Issues, Implementation Issues and Resistance Capturing Tacit Knowledge and Expert’s Evaluation Knowledge Elicitation: Data Mining and Knowledge Codification Methods Knowledge Sharing and Transfer Systems Corporate Memory; Types of Knowledge Repositories Knowledge Sharing Structure and Services, Culture and Knowledge Communities Knowledge Application Systems and CRM Role of Communities in Learning and Product Development Learning Organization The Future of Knowledge Management Knowing ignorance is strength Ignoring knowledge is sickness – L.TSU

The Growing Importance of Knowledge and Knowledge Workers

Tangible resources like rupees, land/buildings, motors/machinery and manual/physical labors are no doubt important to run a farm or a factory but all of these tangible resources can be bought or borrowed. On the other hand, brand image, reputation, information, talent, and knowledge are some of the intangible resources required for a modern organization to survive and thrive in the 21st century global markets and these intangible resources cannot be bought or borrowed.

The rise of information and knowledge based work has been foreseen for many years. Automation in factories and farms in developed economies for more than a century ago freed most of the workforce from having to perform physical labor. Over the last half-century, the advent of computers and the pervasive presence of information created a demand for workers who could produce the information in the first place, extract meaning from it, and take action on it.

Organizations with a high proportion of knowledge workers – let’s call them knowledge intensive organizations – are the fastest-growing and most successful in the United States, Singapore Finland, Sweden and other leading economies, and have generated most of these economies’ growth in the past couple of decades. The market value of many knowledge-intensive companies – which includes the market’s perception of the value of knowledge and knowledge workers – dwarfs their book values, which includes only tangible assets. Even in so-called “industrial” companies, knowledge is increasingly used to differentiate physical goods and to fuel diversification into product-related service. As Prof. Quinn has pointed out, high proportions of workers in manufacturing firms (roughly 90 percent in semiconductors, for example) never touch the manufacturing process, but instead provide knowledgebased services such as marketing, distribution, or customer service.

It’s already apparent that the firms with the highest degree and quality of knowledge work tend to be the fastest-growing and most profitable. Microsoft, for example, is one of the most profitable organizations in the history of the planet. Pharmaceutical firms not only produce sophisticated and lifesaving drug treatments, they also tend to have high profit margins. Growth industries generally tend to be those with a high proportion of knowledge workers.

Following categories of work can be placed into the knowledge workers camp:

Business and financial operations Soft/Hard ware and electronic engineer Architecture engineering Life, physical, and social scientists Legal personnel Health care practitioners Community and social services Education, training, and library staff Arts, design, entertainment, sports, media. System Manager/Analyst, Project Manager

The classification above yields about 36 million knowledge workers in the United States alone, or 28 percent of the labor force. While no classification scheme is perfect (for example, professional athletes are included in the knowledge worker group. Because the U.S government data lumps them in with arts, design, entertainment, and media workers), it’s clear that most people in these jobs think to earn prospects. Knowledge workers in management roles come up with new strategies. Knowledge workers in R&D and engineering create new products. Knowledge workers in marketing package products and services in ways that appeals to customers. Without knowledge workers there would be no new products and services, and no growth.

Knowledge Workers and the World Economy

Prof. Dr.Peter Drucker, who was the first person to describe knowledge workers to any substantial degree (in his 1959 book Landmarks of Tomorrow), said as far back as 1969 that:

“To make knowledge work productive will be the great management task of 21st century, just as to make manual work productive was the great management task of the 20th century.

Then in 1997 Drucker went even further out along the knowledge worker limb:

“The productivity of knowledge and knowledge workers will not be the only competitive factor in the world economy. It is, however, likely to become the decisive factor, at least for most industries in the developed/developing countries.

Why did Drucker – and why should we – believe that knowledge workers and their productivity were so important to the world economy? There are a variety of reasons. First, they are large and growing category of workers. If we can’t figure out how to make more than a quarter of the labor force more productive, we’re going to have problems with our economy overall. Second, they are comparatively expensive type of worker that organizations employ, so it’s doubly shameful if they’re not as productive as they could be. Third, they are key to the growth of many economies. Agricultural and manufacturing work has generally become commoditized, and is moving to the economies where they can be performed at the lowest cost. The only forms of agricultural or industrial work that survive in sophisticated economies are those in which a high degree of knowledge has been injected – for example, in biotechnology manufacturing, or in “precision farming,” in which the fertilizer and pesticides administered to a given crop are carefully monitored using GPS devices in tractors. If agriculture and manufacturing are moving to countries with low labor costs (China is a particularly good example), the jobs that remain in the so-called knowledge-based economies are particularly critical to these countries’ economic survival. It’s not clear exactly what workers in the United States, Western Europe, and Japan are going to do for a living in the future, but it is clear that if these economies are to prosper, the jobs of many of the workers must be particularly knowledge –intensive.

Yet despite the importance of knowledge workers to the economic success of countries, companies, and other groups, they haven’t received sufficient attention. We know little about how to improve knowledge workers’ performance, which is very unfortunate, because no less an authority than Peter Drucker has said that improving knowledge worker performance is the most important economic issue of the age.

What is a Knowledge Worker?

Knowledge workers have high degrees of expertise, education, and/or experience, and the primary purpose of their jobs involves the innovation/creation, sharing/distribution, or application of knowledge.

Knowledge workers think for a living. They live by their wits-and heavy lifting on the job is intellectual, not physical. They solve problems, they understand and meet the needs of customers they make decisions, and they collaborate and communicate with other people in the course of doing their own work.