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Int. J. Knowledge and Learning, Vol. 10, No. 3, 2015
Knowledge trade and sharing in knowledge management system Jong Chang Ahn and Soon Ki Jeong* Department of Information Systems, Department of Electronics Computer Engineering, Hanyang University, Industrial Technology Center 208, 222 Wangsimni-ro, Seongdong-gu, Seoul 133-791, Korea Fax: +82-2-2220-4385 Email:
[email protected] Email:
[email protected] *Corresponding author Abstract: The importance of knowledge management (KM) leads many companies to use a knowledge management system (KMS); however, users frequently do not make good use of KMS. There is a new view that knowledge market can be helpful to promote knowledge transfer by knowledge trade. Knowledge transfer could be activated through the items of knowledge organisation, knowledge strategy, KMS and knowledge reward via knowledge sharing culture and knowledge trade market. We have proposed that the framework should be organically related to the above factors in the prior research. This paper examined survey results and various cases to analyse the effects of knowledge trade market and knowledge culture for knowledge transfer. We then considered real case researches of the Korean organisations and global firms to discuss how each factor activates knowledge transfer. This discussion suggests that organisations should harmonise both knowledge culture and knowledge trade market for knowledge transfer. Keywords: knowledge trade market; knowledge transfer; knowledge management; KM; knowledge management system; KMS; case analysis. Reference to this paper should be made as follows: Ahn, J.C. and Jeong, S.K. (2015) ‘Knowledge trade and sharing in knowledge management system’, Int. J. Knowledge and Learning, Vol. 10, No. 3, pp.258–277. Biographical notes: Jong Chang Ahn is a Professor at the Department of Information System in Hanyang University. He received his BS in Economics from Korea University and MS in Software Engineering from Sejong University. He received his PhD in Information System from Hanyang University. He has great interest in knowledge management, social networks and IT philosophy. Soon Ki Jeong, PhD, is at the Department of Electronics and Computer Engineering in Hanyang University. He received his BS and MS in Electronics and Computer Engineering from Hanyang University. He has great interest in knowledge management system and IT convergence. His research interest includes convergence through IT technology and knowledge.
Copyright © 2015 Inderscience Enterprises Ltd.
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This paper is a revised and expanded version of a paper entitled ‘Knowledge trade and sharing in knowledge management system’ presented at ICHL 2015, Wuhan, 27–29 July, 2015.
1
Introduction
Changes in the knowledge-based economy have highlighted the importance of knowledge management (KM) for sustainability and corporate competitiveness (Davenport and Prusak, 1998). KM is defined as, “a systemic and organisationally specified process for acquiring, organising, and communicating both tacit and explicit knowledge of employees so that other employees may make use of it to be more effective and productive in their work” (Alavi and Leidner, 1999). Firms expect to maximise the utilisation and, hence, value creation of knowledge being accumulated in the firm (Nonaka, 1994). As more firms recognise the importance of invisible knowledge assets, they have conducted KM. Firms have invested millions on their KM because knowledge is an essential resource of the enterprise and the factor producing competitiveness (Nonaka, 1994). A knowledge management system (KMS) is defined as “IT-based systems developed to support and enhance the organisational process of knowledge creation, storage/retrieval, transfer, and application” (Alavi and Leidner, 2001). KMS is frequently used in an organisation to deliver and execute knowledge to members of the firm. In traditional KMS, however, there was a tendency that a little knowledge could be transferred to users. Because users were passive being who accepts knowledge. This implies “a hierarchical top-down relationship between the generator of knowledge who holds the resource (knowledge) and the user (receptacle) who is locked into a dependency stance” (Parent et al., 2007). Current KMSs require the commitment of significant resources to their deployment, maintenance and daily operation (Bibikas et al., 2008). A growing amount of information has been developed with the advent of IT. A discrepancy between the complexity of accumulated data and the intention of users who want to find the latest knowledge causes poor KMS use. As IT develops, it is necessary to propagate internal and external knowledge and to maintain the latest knowledge. There are disconnects between disruptive information technologies and relevant knowledge (Malhotra, 2005). For this reason, users tend to have difficulty finding high quality knowledge within their company. Once the sizes of firms are increased, there might be a limit to KM so we have to consider mechanisms to enable knowledge to be exchanged effectively (Benbya and Van Alstyne, 2011). Users want to find the latest knowledge easily. Firms should develop KMS with these users’ requirements so that knowledge transfer can be activated. Recently, there is a new view that knowledge trade takes a good advantage of knowledge transfer (Benbya and Van Alstyne, 2011). Knowledge trade market-based KMS can be a good substitute for traditional KMSs. We have analysed the complementary points of current KMSs and explored the possibility of knowledge transfer activation by knowledge trading. We think that knowledge trading can help transfer knowledge and grow an organisation effectively.
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Although there have been theoretical discussions on the topic of knowledge trade in knowledge markets (Davenport and Prusak, 1998; Benbya and Van Alstyne, 2011), there is little empirical research to date. Jeong et al. (2013) empirically proved that knowledge transfer can be activated through knowledge trade in knowledge markets. This study explores how a knowledge transfer activation mechanism interacts organically in real cases. The framework for knowledge transfer activation is based on: •
knowledge organisation
•
knowledge strategy
•
KMS
•
knowledge rewards
•
knowledge sharing culture and knowledge trade market (Jeong et al., 2013).
We want to examine potential gaps between evidence and practice in knowledge transfer framework. This study explores how a knowledge transfer mechanism interacts organically in real cases. In the next section of this paper, we will review traditional KMSs and knowledgetrading KMSs. We then provide an overview of our research methodology and analyse it with quantitative and qualitative data. Multiple case analyses of various organisations provide implications supporting our systematic framework. Lastly, we outline discussions for readers and future research.
2
KMS review
2.1 Supplementations of KMS in traditional KM Generally, scholars have regarded KMSs as a key enabler for KM. KMSs support the creation, transfer and application of knowledge in organisations (Alavi and Leidner, 2001). This is also the system supporting successful knowledge transfer within the KM process. Information technology (IT) is an important enabler for supporting knowledge transfer. KMSs have three common applications: •
the coding and sharing of best practices
•
the creation of corporate knowledge directories
•
the creation of knowledge networks (Alavi and Leidner, 2001).
There has been some criticism of traditional technology-push KM models. Workers may not know if the available data, information and decision models are indeed up to speed with the radical discontinuous changes in the business environment. In this model, incomplete and often outdated data, information and decision models drive the realisation of the strategic execution, but with diminishing effectiveness (Wiig, 2002; Malhotra, 2005). Current KMSs represent mainly centralised repositories, which are organised and structured around pre-defined company functions and workflow (Antonova and Nikolov, 2011). Davenport and Glaser (2002) asserted that we have to invest over two-thirds of the effort to the process of maintaining KM than establishing a KMS. Many efforts are
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necessary for maintenance of the latest knowledge and good quality knowledge in current KMS (Wiig, 2002). He also emphasised that the success of KM is based mostly on the people behind the technology because social issues appear to be significant in ensuring the knowledge transfer process. KM should be tightly related to objectives and business strategies of the organisation (Davenport and Prusak, 1998; Greiner et al., 2007; Saito et al., 2007). Appropriate KM strategies for maintaining KMS require: •
the balance between competition and collaboration
•
the balance between social (intrinsic) rewards and economic (extrinsic) rewards (Bock et al., 2005)
•
knowledge diffusion strategies that meet organisational goals (Yu et al., 2007).
If only competition is emphasised on uploading knowledge in KMS, individuals may hoard information for personal advantage (Benbya and Van Alstyne, 2011). A culture of trust and collaboration improves knowledge sharing and organisational effectiveness (Sveiby and Simons, 2002). In the early stage KM, there was a tendency firms give only economic rewards to individuals. Though economic rewards are helpful to share knowledge, they are not primary motivators within knowledge sharing initiatives (Bock et al., 2005). Organisations choose the KM strategy and objective in accordance with the business strategy and objective. The KM objectives and strategy need to concur with the company’s/business unit’s objectives (Greiner et al., 2007). According to Saito et al. (2007), appropriate KM strategies for maintaining KMS require: •
senior management support with strategy and business requirements
•
consideration of organisational dynamics and culture
•
a series of KM initiatives designed to support knowledge process.
We should emphasise knowledge culture, organisations structure, technology and management as key elements for successful KM (Yu et al., 2007). In management, the balance between rewards and assessment is very important for a user’s participation in knowledge transfer, because users want to obtain recognition and reputation through their contribution to knowledge transfer.
2.2 Supplementary mechanism for traditional KMS: knowledge trade perspective Knowledge trade can address the difficulties in managing the hesitation of knowledge transfer in traditional KMSs. Traditional KMSs are repository systems to manage and accumulate knowledge. KMSs established from a knowledge trade perspective, however, support the process to connect people seeking answers with people who have the answers. The architecture of a traditionally centralised IT system is designed with a top-down approach; that of a knowledge market, by contrast, is designed as a way of connecting peer-to-peer. The peer-to-peer approach can connect directly knowledge producers (possessors) to knowledge consumers (seekers) (Benbya and Van Alstyne, 2011). On the other hand, the centralised management of a top-down approach cannot manage all the information; it is also difficult to maintain the latest information. As old knowledge is
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accumulated in the KMS, users tend to ignore it. Figure 1 explains the differences between traditional knowledge management and knowledge trade market (see Figure 1). The autonomous transaction of knowledge can remedy disadvantages. A knowledge market is the space in which knowledge can be traded by price mechanism. An internal knowledge market is a forum within an organisation that matches knowledge seekers with knowledge sources – for example, branch offices and headquarters, or novices and experts – and that includes material or social incentives to encourage information sharing (Benbya and Van Alstyne, 2011). Individuals can exchange their knowledge for other goods in the knowledge market (Davenport and Prusak, 1998). The concept of a knowledge trade market implies that knowledge exchange and transfer within a KMS is worked out via price mechanisms (Benbya and Van Alstyne, 2011). Providers produce knowledge products to obtain economic compensation and social prestige while consumers pay the stated price or points to buy the goods. Price mechanisms of knowledge trade between knowledge producers and knowledge consumers lead to the self-equilibrium between quality and quantity in the knowledge market. Figure 1
Differences between traditional knowledge management and knowledge trade market
Source: How to find answers within your company (Benbya and Van Alstyne, 2011)
2.3 Platform and Technology supporting knowledge market Vorakulpipat and Rezgui (2008) classified KM as three stages: 1
knowledge sharing
2
knowledge creation
3
value creation.
The first stage is supply-side KM, and the second stage is demand-side KM. In supplyside KM, people can acquire supplied knowledge through knowledge-sharing systems. In demand-side KM, people seek to enhance the capacity to satisfy ‘demands’ for new knowledge (Firestone and McElroy, 2003). Vorakulpipat and Rezgui (2008) emphasised that an extension of knowledge sharing and creation is not the future of KM. The third stage of KM will focus and revolve on value creation. “KM processes could impact
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positively on product and service development to promote values that would achieve higher order of human and societal impacts than merely sharing or creating knowledge” (Vorakulpipat and Rezgui, 2008). The third stage of KM is based on a knowledge trade market that successfully supports value creation. Values are created by mutual interaction between supplier and customer. Business relationships between suppliers and customers imply that the two exchange partners coordinate a number of exchange and production activities in a way that increases their interdependence (Holm et al., 2012). Knowledge trade in KMSs based on knowledge markets could act as a broad socio-technical system. Socio-technical systems are composed of both technological and social parts (Cummings, 1978). Knowledge trade is a social act composed of selling, buying and mediating. KMSs in large organisations can be viewed as socio-technical, multidimensional and intertwined knowledge-based activities, such as generation, codification and utilisation (Davenport and Prusak, 1998). Small organisations can obtain most of the information sharing they need through cultural norms and generalised reciprocity, but large organisations stand to benefit more from virtual currencies. Even in large organisations, however, ‘currency’ can be any social benefit that people value (Benbya and Van Alstyne, 2011). Organisations can function properly currency for the mutual benefits between organisations and individuals. Currency leads to a state of stable equilibrium between quantity and quality in organisations. Individuals try to get economic rewards and social rewards. Currency consists of as follows: virtual points, a fee, a favour, a ‘thank you’ and recognition. Socio-technology can be applied to many organisations (Vorakulpipat and Rezgui, 2008). In addition, it is efficient to accept and transfer knowledge from the outside. There are social networks such as wikis, blogs, communities of practice (CoP) and online forums. These social networks support a variety of knowledge activities and play a role as a little knowledge market in the firm. Collective self-esteem and group identification are positively correlated with peer group communication via social networks (Barker, 2009). Two-sided networks can expand business-to-business knowledge trading at the boundary of firms. Two-sided networks match each market, with distinct networks of users providing mutual benefits to each other. Examples include buyers and sellers on eBay, and listeners and musicians on iTunes. Successful market launches of two-sided networks rely on two important strategies: seed and subsidy (Benbya and Van Alstyne, 2011). It is necessary for firms to provide a two-sided network platform for the mutual benefit of knowledge producers and knowledge consumers. Internal and external twosided networks need to be separated. In other words, firms have to provide two-sided platforms internally and provide another type of two-sided platform at the boundary of the firms. Sharing and trading between internal knowledge and external knowledge should be classified.
3
Research method and results
3.1 Research method Traditionally, firms or managed groups have invested in KMS to create value-added business opportunities by sharing and using their knowledge assets. Especially, IT organisations are big investors in KMS because they chase the fast change of trend
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and environment. In addition, the public sector is over 25% of the total KMS market in Korea (Trends of KMS Market, 2001). On the basis of these two reasons, the investigation was conducted by choosing leading organisations operating KMS actively from large IT enterprises with over 3000 employees (cellular-phone manufacturing, IT service and telecommunications) and public organisations (research, IT promotion agency) with over 200 employees. Respondents attending these organisations were randomly gathered for the survey. For this study, we conducted a questionnaire survey from more than 20 Korean organisations using a KMS successfully. The purpose of this paper is to examine how Korean organisations make use of a KMS based on knowledge trade market perspectives and to investigate what organisational factors support knowledge transfer activation. Knowledge transfer can be defined as follows: “it is the process through which one unit is affected by the experience of another” (Argote and Ingram, 2000). Knowledge is converted from tacit knowledge to explicit knowledge for knowledge transfer (Nonaka, 1994). The process of knowledge transfer is dynamically organised between internal mechanism (knowledge sharing culture) and external mechanism (knowledge trade market). Many researchers have found that organisational culture is a key factor of KM (Nonaka, 1994; Davenport and Prusak, 1998). Oliver and Kandadi (2006) defined knowledge sharing culture as “a way of organisational life that enables and motivates people to create, share and utilise knowledge for the benefit and enduring success of the organisation”. Knowledge in an organisation is transformed on a social and cultural basis. A knowledge organisation has its own culture based on trust and communication. Davenport and Prusak (1998) argued that knowledge transfer in the knowledge market is improved by the power of the market. The market is a space where producers and consumers trade goods using prices. The market mechanism can serve as an incentive scheme because producers can differentiate the goods in the market (Benbya and Van Alstyne, 2011). As previously mentioned, the research (Jeong et al., 2013) conducted by survey and structured equation model (with partial least squares) empirically proved that knowledge transfer could be activated through knowledge sharing culture and trade in knowledge markets. As the prior research (Jeong et al., 2013) has shown, knowledge-sharing culture and knowledge trade markets are supporting mechanisms for knowledge transfer activation. Knowledge organisation and strategy are positive factors for knowledge sharing; KMSs and knowledge rewards are positive factors for knowledge trade markets (Jeong et al., 2013). Figure 2 shows how factors affect the empirically proved knowledge transfer platform (see Figure 2). To investigate how knowledge transfer factors are activated in real cases, we did multiple researches on the knowledge-transfer activation factors: knowledge organisation, knowledge strategy, KMS, knowledge rewards, knowledge sharing culture and knowledge trade market. We did collect real-case evidences that substantiate each latent variable to knowledge transfer framework. Especially, we do want to introduce the best practices of the utilisation of knowledge trade mechanism in real cases. In the next section, we will examine our proposed mechanism through statistics results and explain it by giving specific real cases.
Knowledge trade and sharing in knowledge management system Figure 2
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Knowledge transfer activation mechanism
Source: Knowledge Transfer Activation Analysis: Knowledge Trade Perspective (Jeong et al., 2013)
3.2 Statistic results In January 2012, we conducted a survey of employees in enterprises, whose responsibilities include some degree of KM. The questionnaire was also posted on a website with an online survey program, and was taken offline after the two-week survey period. For our study, 223 valid respondents answered from various enterprises. As previously mentioned in the research method section, ICT firms make a good utilisation of KMS. Over 84.7% of respondents said that they work for ICT related organisations (see Table 1). KMSs were usually introduced in the early 2000s in Korea and more than 64% of the respondents said that their company or organisation has operated the KMS for at least five years. Thus, we might say that KMS operations for the organisations in our survey are in a stabilisation phase (see Table 1). The results of our survey revealed that only 33.2% (‘agree’: 31.8%, ‘strongly agree’: 1.4%) of the respondents answered that the KMS of their organisation has been conducted well; the policy like uniform and quantitative assessment was unable to satisfy their members highly. In accordance with the survey results, members in the organisation felt uncomfortable about how to find knowledge in spite of the amount of knowledge accumulated. It is necessary to develop easy search and retrieval systems as the amount of information increases. We need semantic searching technology for the ease of information retrieval linked to a KMS. The operation of a KMS frequently failed to accumulate knowledge effectively because of the assessment by a management hierarchy or a dedicated team. The survey results said that the evaluation systems are still being formalised. Formal evaluations are likely to fail to reflect the needs of the users, because there is the possibility that the assessment of the management leads to screen the knowledge that high-level managers want. As shown in Table 1, only about 33.2% of the users were satisfied with the
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knowledge strategy of their organisations, and 46.2% of the respondents answered with the average level. Though knowledge is an asset in a traditional top-down management approach, knowledge in a knowledge market is a set of goods traded autonomously. Prices or virtual points in traditional KMSs are fixed, but prices in a knowledge market are flexible. If the market price is flexible, a knowledge market ecosystem can be selfcleaned, i.e., returned to equilibrium. In accordance with the results of our survey, most Korean firms used fixed prices in their KMS. Specifically, the respondents answered: a little flexible (11.7%), normal (56.9%), or more or less fixed (31.4%) on the price of knowledge. It means that many organisations still centralise KM (see Table 2). Table 1
Present conditions of enterprises using KMS
Item
Response
Type of business
ICT manufacturing Information Technology (SI, Telecommunications) Service (research, public IT promotion) Financing (insurance) Etc.
Years of KMS used
Methods of content assessment
Employee satisfaction of knowledge asset strategy
Under 1 year
Frequency
Percentage (%)
27
12.1
130
58.3
32
15.3
9
4.0
25
10.3
8
3.5
1~3 years
18
8.1
3~5 years
54
24.2
5~10 years
88
39.5
10 over years
55
24.7
Regular judgement
75
33.6
Number of comment
34
15.3
Popularity vote
8
3.6
No judgement
39
17.5
Unfamiliarity
67
30.0
Strongly disagree
10
4.5
Disagree
36
16.1
Normal
103
46.2
71
31.8
3
1.4
Agree Strongly agree
Source: Knowledge Transfer Activation Analysis: Knowledge Trade Perspective (Jeong et al., 2013)
Furthermore, economic activity between producers (possessors) and consumers (seekers) can be managed by virtual currency in the market. In addition, the policy of changing virtual currency into real goods can establish adequate measures when the market is saturated. Prices control currency liquidity in knowledge markets. As the survey results show, 27.4% (‘agree’ or ‘strongly agree’) of organisations are using virtual currency to some extent, while few of the leading organisations in KM actually adopt a olicy that the
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goods can be exchanged from virtual currency (15.7% responded ‘agree’ or ‘strongly agree’). In terms of pricing mechanisms, the fact that firms still utilise fixed prices shows that they need currency liquidity. In other words, the introduction of the knowledge market concept causes the activation of exchange and transfer of knowledge (see Table 2). Although the present condition of the knowledge trade market is in the early stage of knowledge trade market with virtual currency, we need to consider how knowledge trade market activates knowledge transfer. In the next section, we will introduce how each factor activates the knowledge transfer mechanism through real cases. Table 2
Present condition of the knowledge market
Item
Response
Price of knowledge
Percentage (%)
Fixed
31
13.9
Little fixed
39
17.5
Normal Little flexible Use of virtual currency
Frequency
127
56.9
26
11.7
Strongly disagree
47
21.1
Disagree
68
30.5
Normal
47
21.1
Agree
58
26.0
Strongly agree
3
1.4
73
32.7
Disagree
60
26.9
Normal
55
24.7
Agree
31
13.9
4
1.8
Actual exchange of goods by virtual currency Strongly disagree
Strongly agree
Source: Knowledge Transfer Activation Analysis: Knowledge Trade Perspective (Jeong et al., 2013)
4
Case analysis
Case study is commensurate with investigating research question related ‘how’ and ‘why’. The qualitative data are particularly useful for understanding why or why not emergent relationships hold (Eisenhardt, 1989). Construction strategy of case study needs an analytic generalisation method, which compares developed theory and empirical results of case research (Yin, 2002). This paper attempts to test how the latent variables of logical model (knowledge transfer framework) are supported in real cases. We researched real cases of KM organisations that successfully organise knowledge transfer from various literatures. In the preceding section, we conceptualised the knowledge transfer activation framework and gave the statistical results for KMSs based on a knowledge trade market in Korea. In this section, we analyse how factors including knowledge trade market for knowledge transfer operate in real cases. We investigated the real cases for the combination practice with the framework of the prior research and showed the best
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practice of each latent variable from literatures. Especially, we interviewed five persons who work for Samsung SDS that knowledge trade market is active for the in-depth analysis in July 2012.
4.1 Knowledge trade in knowledge market-based KMS Internal knowledge markets are protected environments where users trade their knowledge via price mechanisms. They facilitate reuse of existing information, cause new information to be created when needed and efficiently regulate use of resources, including people’s time (Benbya and Van Alstyne, 2011). Knowledge trade interacts with knowledge sharing culture to raise the value of knowledge assets. Infosys Technologies, a global India software services company, has received both the Asian and the Global MAKE (Most Admired Knowledge Enterprise) awards. Infosys has launched a central knowledge portal, KShop, in 2000. A knowledge currency units (KCU) incentive scheme was launched to jumpstart contributions to KShop. “Under the scheme, Infosys employees who contributed or reviewed contributions to KShop would be awarded KCUs, which they could accumulate and exchange for monetary rewards or prizes. Additionally, employees’ cumulative KCU scores world is displayed on a scoreboard on KShop, thereby is increased the visibility and standing of prolific contributors” (Garud, 2005). Samsung SDS is the largest Korean company that provides SI (system integration) and IT consulting with US$ 4.1 billion revenue and 10,000 employees in 2011. Samsung SDS is a representative KM enterprise that has held MAKE in Asia for nine years straight and received MAKE in Global in 2010. More than 60% of their 10,000 workers possess IT professional certificates. Generally, best practices are important to IT service firms. This company has operated a knowledge portal named ‘Arisaem’ since 2000. The company encourages knowledge trade through an internal knowledge market by paying virtual currency. Colleagues evaluate the quality of knowledge traded and there are three degrees of being satisfied: strong satisfaction, satisfaction and normal. The price level from the evaluation of colleagues is differentially graded by a dedicated team and there are differential rates of virtual currency for knowledge sharing contribution. The following example is a real case in which Samsung SDS used virtual currency. “A manager in Samsung SDS had a difficulty finding a solution during the project. He had to change a computer operating system from UNIX to Windows, but he did not know where to start. He immediately threw a question to ‘Arisaem’ and finished his work within two days. That would be four work-weeks if he had to work alone. He, of course, gave ‘Aar’ (virtual currency) to solution finders” (Kim, 2002). The person concerned KM(S) of Samsung SDS evaluates that they could save nearly 50 hours on every knowledge trade event. Since market flow could control prices, the floating exchange rate (currency) is helpful to control effectively a knowledge trade market (Benbya and Van Alstyne, 2011). Samsung SDS applies the floating exchange rate to control an internal knowledge trade market. According to a quarterly KM budget, the more knowledge being shared, the more the exchange rates fall and vice versa. This corresponds to the characteristics of demand–supply curves in markets. The utilisation of virtual currency could be the opportunity to use rewards for knowledge sharing and measure indirectly the value of knowledge being shared.
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Two-sided market platform is efficient to connect and match different markets, where distinct networks of users provide each other with mutual benefits. Global firm P&G commercialises more than 50% external ideas from their social site ‘yet2.com’ with knowledge trade. The company arranges knowledge trade between small businesses with creative and innovative technology and P&Gs clients (Grean and Shaw, 2002). The process joining the community of P&G is costless for a small business. The expense of commercialising their projects is due to P&Gs clients and P&G acts as a go-between to connect an agenda. P&G says that “no fee commitment is required or implied to join our community: our clients pay fees so we can find and screen you”. Yet2.com is a good example of activating knowledge transfer by the use of a two-sided knowledge market.
4.2 KMS Accenture is one of the leading global management-consulting firms. It is the largest of the pure consultancies with 246,000 consultants in 120 countries. Accenture has been a pioneer in KM (Paik and Choi, 2005). The KMS of Accenture is an essential asset for maintaining virtual teams and various projects in many countries. Formerly known as Anderson Consulting, Accenture proposed the strategies for prevention of degradation using KMS as follows: •
efficient categorisation of information
•
continual supply of valuable knowledge
•
maintenance of repository cleanness by professionals.
The Anderson Consulting KMS maintained continuously valuable knowledge and had been managed by more than 400 professionals (Jarrar and Zairi, 2010). It is very difficult to maintain knowledge effectively. We need developing platforms by users’ participation rather than managing knowledge. Fjeldstad et al. (2012) proposed that we should need actor-oriented organisational structures and architecture for collaboration. Actor-oriented architecture is composed of three main elements: •
actors who have the capability and values to self-organise
•
commons where actors can accumulate and share resources
•
protocols, processes and infrastructures that enable multi-actor collaboration.
Knowledge trade could be a self-organising system that maintains the latest knowledge and establishes relationships (collaboration) by users’ participation (Benbya and Van Alstyne, 2011).
4.3 Knowledge rewards Rewards systems offer people fairness in relation to their contribution and the value they add to the organisation (Armstrong, 2006). Social, i.e., intrinsic rewards are viewed as more effective than economic, i.e. extrinsic rewards (Bock et al., 2005; Huff, 2006). Recognition is the representative variable of social rewards and encourages people to
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promote individual and organisational knowledge sharing rather than individual knowing (Riege, 2007). IDEO has been ranked in the top 25 most innovative companies. IDEO shares their employees’ profiles containing capability and outcomes. The profile is classified with tags; the number of tags with profiles acknowledges who is the professional in the concerned project. The company easily finds out the professionals who lead new projects. Profiles work on raising employees’ reputation in the company and are helpful to spread knowledge sharing to all members. Employees gain recognition and reputation from colleagues and grow as professionals. Profile sharing lets the company dig out hidden talents and motivate employees to share their knowledge (Brown, 2008). Balancing between company’s recognition and personal reputation as proper knowledge rewards, IDEO kills two birds with one stone: training professionals and sharing knowledge. The right social recognition program leverages an organisation’s people and their knowledge to share the corporate culture. Incentives to collaborate are essential but they need to take three forms – spendable currency, recognition for expertise and the opportunity to have a positive influence (Benbya and Van Alstyne, 2011). Kelly Services is a Fortune 500 company offering services that include temporary staffing, outsourcing and vendor on-site and full-time placement. Kelly has been recognised for its quality processes, management practices, supplier diversity and community involvement (Jenero and Mark, 1995). Kelly operates a reward program named Kudos for increasing an individual’s productivity and encouraging participation. Whenever employees get recognition from customers or managers, the company presents 10~100 Kudos points with the level of contributions. Each Kudos point is equal to US$ 1. Employees’ contributions are classified into three categories. First, ‘individual records’ (when employees receive recognition from managers or customers): manager recognition, customer recognition, building their learning record, record breaker, improving their record and submitting an idea for productivity. Second, ‘making someone better’ (when employees refer their colleagues or participate in an activity): referral bonus, making a difference, peer recognition. Third, ‘bang your dream’ (when employees write articles): newsletter recognition. Employees who contribute to the company are also in the spotlight in their newsletter. Kelly’s Kudos program is a good example that balances between individual effort to obtain social and economic rewards and the recommendation of colleagues. It is possible to enhance the divergence of knowledge through the balance between social rewards and economic rewards.
4.4 Knowledge sharing culture Culture acts as a social control mechanism that manages community members and sanctions those who deviate from norms (Lee and Cole, 2003). Organisational culture can be defined as the shared basic assumptions that an organisation learned while coping with the environment and solving problems of external adaptation and internal integration that are taught to new members as the correct way to solve those problems (Park et al., 2004). Al-Alawi et al. (2007) classified the relationships between organisation culture and knowledge sharing as follows: trust, communication among staffs, information systems, reward system and organisation structure. LEGO Mindstorms NXT is now being developed with consumers every year. It is a programmable robotics kit developed by LEGO and MIT. The LEGO Mindstorm
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series of kits contain software and hardware to create small, customisable and programmable robots. Currently, there are a number of YouTube video clips about creative and customisable robots. The early version of Mindstorms had been hacked. LEGO considered litigation; however, they accepted this situation as a reflection of the customer’s point of view. There is a strong community of professionals and hobbyists of all ages involved in the sharing of designs, programming techniques, creating third-party software and hardware, and contributing of other ideas associated with LEGO Mindstorms (Vallance et al., 2009). Its system/website is organised much like a wiki, harnessing the creative potential and collaborative efforts of participants. LEGO also encourages sharing and peering by making software code available for downloading and by holding various contests and events. In addition, LEGO invites outside specialists who give directions besides inside experts from strong communities. Though LEGO currently has a culture that respects its customers, LEGO previously had a vertical closed structure. If LEGO had not been able to adapt its culture with customers’ communications, then there would be no LEGO.
4.5 Knowledge organisation Information is a flow of messages, while knowledge is created and organised by the very flow of information (Nonaka, 1994). Knowledge creation is the widescoped process of cooperative relationships among members within an organisation. A horizontal organisation structure is suitable for knowledge transfer by making cooperative relationships. That is why horizontal organisation activates teamwork-based communications among members (Goh, 2002). A horizontal organisational structure not only implies enhanced communication but also the decentralisation of the decisionmaking process (Claver-Cortés et al., 2007). Cheil Worldwide is Korea’s leading and the world’s 19th-largest advertising agency with sales of US$ 0.61 billion and 1000 employees in 2011. Cheil Worldwide uses the avatars of members for communication and idea sharing. Their avatars do not represent personal information such as position, gender, etc. The use of virtual avatars is one way the company tries to make the structure of the organisation flat. Recently, organisations use actively social network services (SNSs) to ensure horizontal in-company communications. There are two types of companies using SNSs: companies that use commercial SNSs and companies that use self-developed SNSs. LG electronics and DAUM Communications (Daum) use commercial SNSs. LG Electronics is a Korean multinational electronics company with sales of US$ 45 billion and 125,000 employees in 2011. Daum is an internet services company in Korea, which has sales of US$ 0.35 billion and 1000 employees in 2011. The HRD team of LG uses social media ‘Yammer’ to collect ideas and to discuss opinions. Daum uses Yammer more specifically; it is composed of a community for company-wide communications and 48 in-house communities. Communities are composed of teams, services, concerns and clubs. People talk and discuss opinions in their communities. Daum evaluates Yammer use as a movement to initiate in-house horizontal communication. Though SNS promotes an organisation for supporting horizontal communication, companies block outside SNS messages because of security issues. Shinsegae and Lotte Data Communication Company (LDCC) uses closed-end and self-developed SNSs. Shinsegae is a Korean department store franchise with sales of US$ 9.3 billion and
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16,000 employees in 2011. LDCC is a Korean IT-service company with sales of US$ 0.34 billion and 1000 employees in 2011. Shinsegae has developed intra-social system named ‘Blossom’ to strengthen communications among people. In Blossom, people can check all posting messages from all members in real time and use most of the features as SNS. All messages from outside flow into LDCC SNS, but messages from inside to outside are blocked. Key features are as follows: micro blog (Twitter) operation, searchable personal profiles with personal career goals and projects, proposed ideas evaluated with comments and surveys, and places for storing content. Generally, horizontal organisations have more communication uses than vertical organisations. Activation of communication is, however, efficient for knowledge transfer even in vertical organisations like the army. ‘Companycommand,’ a forum of the US army, has as its motto, “Connecting in conversation, becoming more effective”. Lessons learned from various battlefields are shared and discussed and enhance operating quality. The case of Companycommand (www.companycommand.com) says that communication is useful to enhance the efficiency of operation in a vertical organisation (Baum, 2005).
4.6 Knowledge strategy KM should be tightly related to objectives and business strategies of the organisation or sub-unit. The strategic direction of the organisation should determine the direction of the KM activity (Greiner et al., 2007). On the basis of the strategy, KM will determine the processes for managing knowledge. KM processes define methods for managing knowledge at a macro (organisational) and micro (individual and group) level (Sherif, 2006). According to Lettieri et al. (2004), “A KM strategy must be coherent and integrated with a comprehensive strategy whose goal is to pursue excellence”. Samsung Life Insurance is the largest Korean insurance company with US$ 22 billion in revenue and 6500 employees and is a Fortune global 500 company. The company makes the best use of a two-track strategy for knowledge transfer. Insurance companies need both actuaries and life insurance planners. Professional knowledge is actively shared in the forum in their KMS. People share and adopt their ‘Learning and Growth’ knowledge in the ‘Infor YOU’ team room. Knowledge sharing site in Infor YOU is composed of field CoP and an essential certificate-learning club. Knowledge capable of being shared and transferred includes business operation materials, learning materials, club activities and headquarters materials. In addition, Samsung Life Insurance efficiently transfers its knowledge assets (lessons learned and information from field, best practices) to life insurance planners through a satellite broadcast. Knowledge strategies have to be appropriately adapted to organisational structures and business strategies like Samsung Life Insurance. Doosan E&C is global infra-solutions company that provides civil works, architecture and plants with US$ 1.9 billion revenue and 1700 employees. Doosan E&C has successfully modified their knowledge strategy to suit the construction industry. Though in general KM tries to transfer best practices, conversely Doosan E&C shares failures. In the construction industry, delays raise costs. The company allows voluntary posting of failures to spread lessons, and eventually influence production growth. Doosan E&C has changed their knowledge strategy to optimise organisation structures within industry category.
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Table 3 describes briefly the characteristics of the above cases. Characteristics of constructs from case organisations present main points for knowledge transfer activation. Table 3
Characteristics of case organisations
Construct
Case organisations
Knowledge Trade (in Infosys Technologies, Knowledge Market) Samsung SDS, P&G
KMS
Accenture
Characteristics •
Virtual currency based knowledge trade market affected external mechanism for knowledge transfer
•
Knowledge trade by price led to autonomous dispersal of knowledge
•
Traditional KMS needed a lot of effort for maintenance
•
Autonomous development of knowledge market in KMS by knowledge trade
Knowledge reward
IDEO, Kelly Services
•
Knowledge rewards balanced between economic reward and social reward (recognition, reputation)
Knowledge sharing (in Knowledge Culture)
LEGO mindstorm NXT
•
Trust based knowledge culture affected internal mechanism for knowledge transfer
•
Knowledge culture derived a sharing environment from user participation
Knowledge organisation
Cheil Worldwide, LG electronics, Daum, LDCC, Shinsegae, Companycommand
•
Horizontal and flexible organisation structure
•
Animated communication in knowledge organisation
Knowledge strategy
Samsung Life • Insurance, Doosan E&C •
5
Aligned knowledge strategy with organisation target Knowledge strategy modified within environment around organisation (industrial category)
Discussion
Our study explains how knowledge transfer mechanisms could be activated through knowledge trade markets and sharing cultures by the multiple case researches. There are many enterprises that operate KM. There are, however, a few enterprises that increase productivity with KM. KM is a real, complex ecosystem organised by a number of factors; knowledge organisation, knowledge strategy, KMS, knowledge rewards, knowledge sharing culture and knowledge trade in markets. Especially, knowledge trade in a market could be organically implemented for knowledge transfer activation with the other factors. Why is knowledge market a useful mechanism for knowledge transfer activation? Market mechanisms can control the cycle of knowledge creation and extinction in the knowledge market. Knowledge trade in markets can be controlled autonomously by flexible prices. Currency liquidity can vitalise the knowledge market. Though some companies utilise virtual currency policy, the exchange of real goods can manage the market appropriately as with Samsung SDS.
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The result of our survey showed that 33.2% of users are satisfied with the use of KMSs of their own. This implies that we need significant KMS improvements. Though KMSs had been developed by traditional KM, knowledge market-based KMSs could have synergic effects. We can find meanings of the development of knowledge marketbased KMSs from the results of our survey and multiple case researches. Companies and organisations have to develop KMSs that users can promote autonomously by active adoption of trade in the knowledge market mechanism. We need to adjust market mechanisms on KMSs via flexible prices and balance economic rewards and social rewards rather than favouring only economic rewards. It is necessary to balance open and closed platforms like two-sided markets for harmony between internal and external knowledge markets. Firms or organisations should consider various aspects for the placement of a knowledge market within the organisation. First, KMSs should provide a way to improve and sustain the relations among communities. The system also provides a way for each community to make explicit its own interpretation schemas. Second, firms need to change their organisational structure to be flexible. Flexible organisational structure can improve the social relations of the members. Decentralisation and social interaction are particularly important on encouraging knowledge flows among organisational units that compete with each other in the marketplace (Tsai, 2002). Third, we should harmonise the economic and social rewards for the balance between competition and cooperation. Though economic rewards can be helpful for the quantitative growth of knowledge creation, it is important to improve the quality of knowledge by reputation and social rewards. Fourth, compensation should be accompanied by a fair assessment. As a result of our survey, the percentage of evaluation methods with democratic assessment was low as the number of comments was 15.3% and the popularity vote was 3.6%. In addition, 33.6% of the respondents answered about a regular judgement as a one-way evaluation method (see Table 1). Evaluation methods need to leave a uniform measurement and they should be promoted and managed so that employees feel judgements of their knowledge transfer are fair. If members do not feel fairness in evaluations, then that impacts knowledge sharing negatively among members. The methods should be accompanied by a qualitative assessment by users rather than an evaluation by board of directors or dedicated team. We hope that our results can give a stage as theoretical and empirical framework for a future research on the knowledge trade KMS (in knowledge market), which enhance KM initiative with the other accelerator: knowledge organisation, knowledge strategy and knowledge sharing culture. In particular, a consideration of limitation in this study suggests that further studies should be made by in-depth case studies for knowledge trade market. Though we investigated multiple cases across different conditions for knowledge transfer, we do not explain deeply how each factor harmonises organically with the knowledge transfer of knowledge market in a real case. We could also obtain more generalised research results if we do study deeply one or two cases through a traditional case-study methodology (Yin, 2002). For future work, we suggest that a knowledge market analysis based on SNS should be added by setting the framework of a knowledge market and knowledge sharing culture for knowledge transfer activation.
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