2004/12/12 OASIS 2004 Workshop 1

Knowledge Management at SMEs

Yukika Awazu1

Kevin C. Desouza1,2

Institute for Engaged Business Research, The Engaged Enterprise1 Dept. of Information & Decision Sciences, University of Illinois at Chicago2

2004/12/12 OASIS 2004 Workshop 2

Introduction Managing knowledge is a critical capability for SMEs to master

because it helps them leverage their most critical resource. Organizational knowledge is the most salient resource at the

disposal of SMEs in terms of availability, access, and depth. Successful SMEs are those who can leverage their knowledge in

an effective and efficient manner, so as to make up for deficiencies in traditional resources, like land, labor, and capital.

In our research, we discovered that SMEs do not manage knowledge the same way as larger organizations.

We draw our findings from a nine month investigation of knowledge management practices at 25 SMEs.

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1: Dominance of Socialization in the SECI Cycle

SECI Cycle – (Nonaka et al. 1995 )

Knowledge creating cycle comprises of four activities: socialization, externalization, combination, and internalization (SECI).

In SMEs we found the presence of SECI model - a variant of the SECI model

Socialization was the predominant way through which knowledge transfer occurred from owner to employees and between employees.

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2: Common Knowledge In SMEs, each employee is given a deep introduction

into the way the SME conducts business. Facilitates ease of communication and sensemaking. Forms a shared context for interpretation and

communication. Emphasized by training initiatives Results in each employee had very similar foundation

and grounding in organizational matters. In larger organizations, for the most part, employees

have scant “common knowledge” due to excessive specialization of duties and distributed nature of work assignments.

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3: Knowledge Loss – Not a Problem

SMEs never considered it a real problem or issue.

The core knowledge is held by the owner/managers of the organization.

Deliberate mechanisms in place to prevent knowledge loss from becoming a problem. Promotions from within the Organization Backups in terms of Knowledge Work Presence of Common Knowledge

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4: Exploitation of External Sources of Knowledge

Appetite and ability to exploit foreign sources of knowledge

Utilization of ready-made knowledge of external sources

Well-connected to local communities Reason: SMEs cannot afford to invest resources in

the creation of new knowledge, as they are starved for resources, especially during the initial conception and growth stages.

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5: People Centered Knowledge Management

Technology is almost never used as a central means to manage knowledge.

Knowledge is created, shared, transferred, and applied via people based mechanisms such as face-to-face meetings, observations, apprenticeship, etc.

Knowledge generated is immediately put into practice, rather than being stored in some obscure technology artifact, like an electronic repository, e.g. Intranet Portal.

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6: Managing Ignorance

SMEs are normally quick to admit ignorance areas they lack competency in.

Not afraid to call experts to help them gain knowledge in areas of ignorance.

This is important as SMEs cannot afford to spare resources on “risky”, “unknown”, or “futile” projects. They do extensive homework before committing, one aspect being checking if they have the requisite knowledge.

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7: Knowledge Management or Management by Knowledge

Focus on “management” by knowledge, i.e. knowledge guides all management efforts.

Unlike with larger organizations, knowledge is the key asset that drives most actions, the weight placed on other assets, like financial capital, is significantly lower.

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Conclusion Viewing SME knowledge management practices as scaled down

versions of the practices found in larger organizations is incorrect. SMEs have understandable resource constraints, and hence have

to be creative in working around these limitations in order to manage knowledge.

Our goal of this presentation is to shed a light on peculiarities in SME knowledge management practices, with the hope of enticing scholars and practitioners to follow-up with more detailed research undertakings.

Future Research Avenues: [1] Write-up detailed case studies, [2] Link SME knowledge capabilities with organizational success outcomes, [3] Develop a metric to study knowledge process maturity in SMEs and use it to conduct “gap analyses”, and [4] Data permitting, study how knowledge programs get transformed as SMEs expand or transform themselves to larger organizations.

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Questions?Contact Information

Yukika AwazuResearch Fellow

Institute for Engaged Business ResearchThe Engaged Enterprise

E-mail: awazu@engagedenterprise.comWebsite: www.engagedenterprise.com

Please email us for a copy of the research paper.