Knowledge Management and Organizational Learning

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Lund Institute of Economic Research Working Paper Series

Knowledge Management and Organizational Learning:
Fundamental Concepts for Theory and Practice

2005/3 Ron Sanchez

Ron Sanchez, Professor of Management Copenhagen Business School, Solbjergvej 3 - 3rd floor, DK-2000 Frederiksberg, Denmark, sanchez@cbs.dk Lindén Visiting Professor in Industrial Analysis, Institute of Economic Research, Lund, Sweden

Abstract
This paper investigates several issues regarding the nature, domain, conceptual foundations, and practical challenges of knowledge management and organizational learning. The paper first identifies and contrasts two fundamental philosophical orientations to knowledge management -- the personal knowledge orientation and the organizational knowledge orientation -- and illustrates the distinctive kinds of knowledge management practices that result from the two orientations. It then summarizes three essential organizational processes in knowledge management: (i) maintaining learning loops in all organizational processes, (ii) systematically disseminating knowledge throughout an organization, and (iii) applying knowledge wherever it can be used in an organization. A general model of organizational learning -- the Five Learning Cycles model -- is introduced to represent how individuals, groups, and the overall organization are linked in an organizational learning process. Key challenges in managing each of the Five Learning Cycles are discussed, and examples of appropriate managerial interventions are proposed for each learning cycle. Concluding comments suggest how knowledge management processes reflect a fundamental shift in management thinking and practice from traditional concepts of command and control to more contemporary concepts of facilitation and empowerment. Jel-codes: M1, M53 Keywords: Knowledge management, Organizational learning, Learning cycles ISSN 1103-3010 ISRN LUSADG/IFEF/WPS-005/3-SE

Introduction
As a growing focus of concern within management, knowledge management is an area of research and practice that is still searching for a stable set of core concepts and practical applications. This paper undertakes to contribute to this search by addressing some fundamental questions about the nature, domain, conceptual foundations, and practical challenges of knowledge management and organizational learning. The first section of the paper considers two fundamental philosophical orientations to knowledge management -- the “tacit” or personal knowledge orientation versus the “explicit” or organizational knowledge orientation. I describe the deep assumptions underlying each orientation, and the resulting differing emphases in knowledge management concepts and practices that each orientation leads to. Examples drawn from current practice in several companies illustrate the distinctive kinds of knowledge management practices that result from the two orientations. The second section proposes that there are three essential organizational processes that must be functioning well in any effective knowledge management system: (i) maintaining learning loops in all organizational processes, (ii) systematically disseminating new and existing knowledge throughout an organization, and (iii) applying knowledge wherever it can be used in an organization. I also argue that an organization that can carry out these processes effectively must develop processes for converting personal knowledge into organizational knowledge, and vice versa, on an ongoing basis. The third section presents the Five Learning Cycles model of organizational learning. In this general model of learning processes in an organization, five kinds of learning cycles are identified that link individuals, groups, and the overall organization in an organizational learning process. The model makes clear how new knowledge developed by individuals in an organization must navigate each of the Five Learning Cycles to become accepted by other people in...
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