1. What is a knowledge-based business?What are some advantages of making a business knowledge-based?

2. The Six Elements of Knowledge-based Business • The more you use knowledge-based offerings, the smarter they get • Ritz-Carlton • Citibank’s detection of credit card fraud • The more you use knowledge-based offerings, the smarter you get • GM’s car maintenance system • Knowledge-based products and services adjust to changing circumstances • CloudGel on windows • Micro-PCM ski jackets

3. The Six Elements of Knowledge-based Business (contd.) • Knowledge-based business can customize their offering • Ringtones from friends • Knowledge-based products and sercvices have short life-cycles • Knowledge-based business offer products that respond to customers in real-time • Otis elevators’ maintenance scheme

4. Three KM Strategies: Knowledge Hierarchies, Knowledge Markets, and Knowledge Communities Lecture notes prepared from Dennis and Vessey (2005)

5. What are Knowledge Hierarchies? Knowledge is managed as an organizational research In other words, managed by someone who has a formal authority to achieve a particular goal Supports knowledge within one area whether it is a traditional functional unit or a unit organized around a product (such a business unit) or a project (such as a shuttle launch)

6. Knowledge Hierarchies (contd.) • Supports a defined set of users with specific requirements • Usually supports the knowledge requirements of a single unit • A set of individuals are charged with the responsibility of creating the knowledge • Often have dedicated KMS staff • Contains specific knowledge customized for a target set of users • By reusing knowledge, it creates economies of scale and scope

7. Knowledge Hierarchies (contd.) Cost in a knowledge hierarchy is high due to the maintenance of a large pool of KMS staff Staff often work with “experts” outside the knowledge organization Can often promote the usage of organizational routines and best practices by blending them within the KMS Uses a combination of codification and personalization strategies

8. Knowledge Markets Knowledge is viewed as a decentralized individual resource Focus is on knowledge capture and not on creation or development Very little validation or formalization of the knowledge No one is formally responsible for managing the knowledge

9. Knowledge Markets (contd.) • Knowledge is not specific to a functional unit though it may be organized around a specific area of interest • Three problems in knowledge reuse • Quality is questionable since no specific guideline to manage it • Search costs are higher since no systematic techniques to store it • Contextualization costs are higher

10. Knowledge Markets (contd.) Knowledge markets are suitable for knowledge augmentation Appropriate where knowledge has a long life span

11. Knowledge Communities Lies between a knowledge hierarchy and knowledge market. The organization chooses to manage the knowledge for a specific knowledge need as a communal resource that is shared among members of communities within the firm. The firm treats the exchange of knowledge as a trust-based process. Individual users decide how knowledge is to be developed and used, but those decisions are heavily shaped by the community members’ norms and active involvement.

12. Knowledge Communities (contd.) • In such communities, individual users are the source for knowledge creation, development, and reuse. • These individuals seek and contribute knowledge as they desire, but they do so as members within a community of similar minded members. • The community is around a specific issue or set of issues of interest to its members. • For example, a firm may have a number of IT professionals who are interested in Web services, and who are spread across many organizational units. • Some members of the community serve as coordinators • Ensures that knowledge structure is maintained • May have some control over knowledge creation but not to the extent of the managers in a knowledge hierarchy

13. Knowledge Communities (contd.) Knowledge reuse costs are lower than a knowledge market but higher than in a hierarchy Used mostly for knowledge augmentation and where knowledge has a medium to long life span Knowledge coordinators have to play an active role in managing the knowledge