From Information Management to Knowledge Management

1. From Information Management to Knowledge Management Yale BraunsteinJune 2004

2. Background - 1 • Information management is central: • to the collaboration of groups of individuals • to the mission of organizations of all types (businesses, education, and government) • to geographically centralized and distributed communities • and to society as a whole. • While this predates modern information technology, computing and especially networking have vastly expanded the importance of information to these social contexts.

3. Background - 2 • Largely as a result of these technologies, information has become: • less centralized • more widely distributed • chaotically organized • overwhelmingly plentiful. • This places a premium on ways to distribute the management of information, to turn chaos into organization, to identify targeted or useful information.

4. Background - 3 • While IT is responsible for creating problems, it is also a major hope for solutions. • Both centralized and distributed information collections can be much more effectively organized. • This allows individuals, groups, organizations, communities and society to leverage their information assets.

5. Putting this into Historical Perspective • Complete autonomy • Self-sufficiency • Serfs & guilds • Role of trade • necessary for improved standard of living • Hanseatic league as early form of decentralization • Mass production • Multi-plant / multi-market mass production • Decentralization • Virtual offices • Virtual organizations TIME         

6. Where to firms come from? (Modern theories) • Coase: “Theory of the Firm” • Role of transactions costs • Stigler: “Economies of Scale is Limited by the Extent of the Market” • Interplay of production technology and mass market possibilities

7. Markets vs. Hierarchies • Internal production • External production (out-sourcing) Role of information and IT

8. Information Management: Themes and Challenges 1. Digital networks and organization 2. Information management and knowledge management. 3. Business planning for the introduction of IT to organizations 4. Managing change

9. 1. Digital Networks • How are digital networks changing the organization and management of systems (e.g., information flows and publication) and enterprises (e.g., for-profit business and non-profit organizations—NGOs)? • Case study: Howdoes decision making by groups meeting face-to-face differ from decision making by virtual groups?

10. 2. IT and Organization • How is information technology changing: • information management = the basic information process of organizations (e.g., budget, inventory, personnel, etc.)? • knowledge management = the basic human skills and social relationships of organizations (e.g., collaborative work, career management, communication with customers)? • the structure of organizations, and relations between them?

11. 3. Business Planning • The introduction of IT to organizations implies change, therefore the need for strategic planning, management and communication. • New business models for organizations • Methods for gathering information • Building for-profit & non-profit budgets • Creating business plans

12. 4. Managing Change • How can the implementation of information technologies be managed: • To avoid stress and conflict? • To encourage innovation? • To optimize career development?

13. Information Management As Part of Management • Venkatraman’s postulate: Management is evolving from a command paradigm to the communications paradigm. This leads to: • flatter organizations • more local autonomy • management by coordination rather than command and control • Information management has rationalized the organization, but real time network communication is changing it fundamentally: • from hierarchy to enterprise (networks of self managed enterprises that operate like an internal market system).

14. Networks Are Strategic • Walter Powell’s argument: • Networks are changing the firm and its environment, such as from from EDI to B2B • Different ways to focus on the network: • Rosegger: strategic alliances • Powell: networks and firms • Cisco: “web enterprises”

15. New Models of Management • All of the above has led to the design and analysis of new approaches to management

16. The Firm As an Experimental Machine. • Eliasson: Key knowledge is “know how,” tacit knowledge that cannot be communicated, but is based upon experimentation in the marketplace. • The organization of this experimental learning is the key to innovation: • “the competent team” is the key • the market is being continuously reinvented • Rosegger: knowledge acquisition has become the heart of enterprises

17. Eliasson’s Entrepreneurial Model of Decision Making • Strategic selection by top competent team, answering “What?,” based on career experience knowledge • Control & coordination by executive staff, answering “In what order?,” based upon expertise from professional education • Operations, by managers, answering “How?,” based upon training and experience.

18. Competency (Eliasson) • The competency of organizations is a function of knowledge management, e.g., entrepreneurial vision, experimental attitude towards markets, career management • Sense of direction (intuition) • Daring (risk-willingness) • Efficiency in identifying mistakes (analysis) • Effectiveness in correcting mistakes (activity) • Effectiveness in managing (coordinating) successful experiments • Effectiveness in feeding acquired experience back into a sense of direction.

19. “The Career” • Eliasson’s model of the firm requires a theory of the career, since tacit knowledge acquired by experience is the basis of entrepreneurship. • One of the key tasks of management is to provide a logical sequence of jobs to develop this capability.

20. Fahey: Three Dimensions of Strategic Management Competitive environment = Marketplace strategy Managing the organization = Making & executing choices Strategic Management = Balancing the two

21. Investment • IT involves investment. Understand the business model, culture, and decision making process of your organization to figure out the politics of IT investment. (a) internal reallocation (b) loans (c) venture capital formation

22. KM is broader than IM • Relation to "flows" and "stocks" ? • IM = managing flow of information • KM = managing stock of knowledge • KM is "the task of developing and exploiting an organization's tangible and intangible knowledge resources" (J. McCune, 1999) • Tangible assets = patents, licenses, customer lists, competitive info, etc. • Intangible assets = knowledge possessed by employees (experiential, etc.) (Others distinguish between explicit and tacit knowledge)