Knowledge Flows In Virtual Teams – A Role of KMS

Yulin Fang

Richard Ivey School of Business, [email protected]

ABSTRACT This paper reviews the existing literature in knowledge transfer and virtual teams, and identifies the challenges that knowledge transfer process is facing in virtual teams. The paper suggests that knowledge systems (KMS) can support knowledge flows in virtual teams by addressing four factors (perceived value of source knowledge, motivational disposition to give/acquire knowledge, existence and richness of transmission media and absorptive capacity). Six propositions on the roles of KMS in facilitating knowledge flows within settings are presented.

INTRODUCTION Firms may be regarded as distributed knowledge systems from a knowledge-based perspective (Tsoukas 1996). The capability of identifying and applying organizational knowledge within the firm has become a principle source of achieving and sustaining competitive advantage(Grant 1991). In recent decades, the globalization of world business and the expansion of multinational companies have driven many companies to be more geographically dispersed, which consequently brings up the challenge of utilizing dispersed knowledge and expertise (Penrose 1959).

Virtual teams have been emerging rapidly in the twenty-first century (Townsend 1998). Many organizations are using information and communication technologies to bundle together distributed knowledge and make it available to individuals and teams. By doing so, these organizations can overcome traditional temporal and spatial boundaries. It is reported that more than two-thirds of American workers were engaged in virtual work by 2001, and 31% of them work in a virtual management structure (i.e., their immediate manager or staff members were not located in the same office)(Sue Archambault 2002).The motivation of using virtual teams may lie in the increasing needs for decentralized specialized knowledge and expertise as well as globalization (Boutellier 1998). However, studies in (Ahuja 2000) and organizational learning (Walsh 1995) have suggested that the distributed nature of cognition in team settings and the diversity of knowledge creates challenges to in teams. These challenges will become more pronounced in virtual teams (Alavi 2002).

In this paper, we argue that knowledge flows are facing particular challenges in virtual team settings. Knowledge flow is conceptualized as a function of five factors based on Govindarajan’s (2000) framework. The potential role that Knowledge Management Systems (KMS) can play to facilitate knowledge transfer by addressing these factors is discussed and six propositions are presented for further research.

VIRTUAL TEAMS – OPPORTUNITY & CHALLENGE TO KNOWLEDGE TRANSFER Penrose (1959) predicted the challenge about the imbalance between knowledge and efficiency due to geographical dispersion of organizations. Today information

DSI & APDSI Shanghai 2003(China) technology enables people to communicate effectively and efficiently everywhere. Virtual teams, as a form of working structure, are becoming increasingly popular (Handy 1995; Townsend 1998). The motivation of forming virtual teams within or across organizations is mainly attributed to the increasing needs of specialized expertise, location-specific knowledge or employee preference (Boutellier 1998). Viewing from a knowledge-based perspective, we have realized that firms have knowledge geographically distributed all over the organizations (Tsoukas 1996). They are embedded with individual experience, team practice, and organizational beliefs, etc (Tsoukas 1996). Furthermore, the globalization of multi-national companies has been regarded as a global trend, which leads organizations to be more geographically dispersed. It is also more likely that expertise and special knowledge become more dispersed and more difficult to access from other units due to physical distance.

We know that the identification and utilization of the organizational knowledge assets have huge impact on a firms’ competitive advantage(Alavi 2002). How to leverage widely distributed knowledge has become an important organizational issue. Virtual teams, supported by advanced information technology, appear to be an effective solution to the problem, because it provides organizations with the capability to work across temporal and spatial boundaries (Boudreau 1998).

However, organizational learning perspective has shown that diversity of knowledge and the distributed nature of cognition in team settings create challenges to knowledge management (Walsh 1995). Though each member in the virtual team has profound and specialized knowledge, it doesn’t necessarily mean other team members can successfully share her knowledge; although knowledge and cognition in a team is socially composed and in turn shared by the individuals within the team, it doesn’t necessarily mean team-level knowledge is better than individual knowledge. It is possible that the intelligence of a team is much lower than that of each individual in the team (Senge 1990). Therefore, how to effectively transfer knowledge among virtual team members and maximize the team’s output is an important question to be answered.

Knowledge transfer is defined as the process of transferring knowledge from the location where it is available to the location where it is needed (Alavi 2001). Due to the distributed nature of organizational knowledge and cognition that knowledge is located at different places (Tsoukas 1996), knowledge transfer is undoubtedly one of the most critical issues in knowledge management. It appears more challenging in virtual team settings because the flows of knowledge have to transfer across temporal and special boundaries in terms of the definition of virtual teams. It is suggested that knowledge flows can be conceptualized as a function of five factors in terms of communication theory (Govindarajan 2000): 1) perceived value of the source knowledge; 2) motivational disposition of the source; 3) existence and richness of transmission channels; 4) motivational disposition of the receiver; 5) the absorptive capacity of the receiver (Govindarajan 2000). Research on knowledge transfer effectiveness in virtual teams should be well aware of the effectiveness of each of these factors

By adopting Govindarajan’s framework, the question as to knowledge flow effectiveness in virtual teams can be reasonably broken down to four sub-issues. They are: 1) how to effectively identify valued knowledge within the virtual team; 2) how to motivate team members to proactively give and request knowledge in the team (factor two and four are put together); 3) how and in what forms required knowledge can be

effectively transferred to its destination; 4) how to absorb received knowledge. Answers to these questions are very important for organizations to effectively leverage dispersed knowledge assets in virtual team environments. A successful knowledge should address these issues.

THE POTENTIAL ROLE OF KMS TO FACILITATE KNOWLEDGE TRANSFER In this section, we present challenges that each factor of knowledge flow processes is facing in the virtual team environment, and preliminarily propose means by which KMS could be designed to meet these challenges.

PERCEIVED VALUE OF THE SOURCE KNOWLEDGE Different resource has different level of value to the person who is seeking for knowledge. A member will seek for help when he doesn’t have a particular kind of knowledge but he knows that somebody in his virtual team may have. Therefore, the extent to which the knowledge seeker is able to locate the best source knowledge within the virtual team will affect the effectiveness of knowledge transfer. Wegner identified two types of human being’s memory: internal memory and external memory (Wegner 1986). Internal memory refers to knowledge held in mind. It refers to knowledge that people know; external memory refers to those not kept in mind but can be located and accessed in case of need. A team member looks for high-value knowledge source within his virtual team by using his external memory. External memory can be enhanced by development of knowledge source directories using information technologies or by direct interactions with and observation of team members (Alavi 2002). Alavi has proposed that KMS support of a virtual team’s external memory enhances the team’s knowledge integration process (Alavi 2002). We would suggest that KMS support of external memory could help virtual team members to identify source knowledge of high value, thereafter enhance the effectiveness of knowledge flows.

Proposition 1: KMS support of virtual teams’ external memory can enhance the team’s knowledge transfer effectiveness by facilitating source knowledge perception.

Two dimensions of organizational knowledge are explicated: tacit and explicit (Nonaka 1994). The tacit dimension of knowledge is comprised of both an individual’s mental model, beliefs, viewpoints, know-how and skills, while the explicit dimension of knowledge is articulated, codified and communicated in symbolic form and/or natural language (Nonaka 1994; Alavi 2001). Apparently explicit knowledge can be obtained by retrieving encoded information systems, but tacit knowledge is kept in individual’s mind (beliefs, viewpoints, know-how, etc) and therefore is difficult to be objectified. However, knowing team members can facilitate locating their tacit knowledge. Mutual understanding is the knowledge that actors in a virtual unit both share and know that they are sharing (Cramton 2001). Better mutual understanding can help people identify the tacit knowledge of their team members. Alavi (2002) proposed that KMS support of mutual understanding could enhance knowledge integration process. Here we would suggest that KMS could improve team member’s perception of the source of the needed tacit knowledge by supporting mutual understanding.

Proposition 2: KMS support of the mutual understanding of members in a virtual team can enhance the team’s knowledge flow effectiveness by facilitating source knowledge perception.

Both propositions could be accomplished by creating online directories specifying the competence and working experience of the team members, by developing codified knowledge library, etc, because they help enhance team members’ external memory. Online program or joint job training program can also help because they provide people with opportunities to develop mutual understanding.

MOTIVATIONAL DISPOSITION OF THE KNOWLEDGE SOURCE AND DESTINATION Motivational disposition refers to team members’ willingness to share knowledge with others in the team. Motivational disposition is affected by two major factors: incentive and trust. Knowledge flows are not cost free; therefore the incentive of sharing knowledge is an important issue that might determine the effectiveness of knowledge transfer. The incentive scheme in normal teams and virtual teams is not significantly different and information technologies might not be able to take a role here. Jarvenpaa suggests that in such a virtual team setting, coordination is accomplished via trust and shared communication systems (Sirkka L. Jarvenpaa 1998).

Trust is defined as the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or that other party (Davis 1995). Trust is reported to reduce transaction costs, increase confidence and security in the relationship and promote open, substantive and influential information exchange (Frost 1978). However, the importance of trust as a factor influencing motivational disposition is amplified in the virtual team environment, because team members: 1) are geographically dispersed 2) interact only through the use of computer-mediated communication technologies 3) rarely or never meet each other in person. Virtual context constrains, or even impede the development of trust (Sirkka L. Jarvenpaa 1998). Therefore, building trust in a virtual team is crucial. We propose that KMS support of trust building and maintaining can enhance knowledge flows effectiveness among virtual team members:

Proposition 3: KMS support of virtual team members’ trust to each other can enhance knowledge flow effectiveness by influencing motivational disposition.

According to Jarvenpaa (2000), trust could be enhanced by recognizing team members’ integrity and ability. KMS could be designed to provide virtual team member’s historical performance, work experience, academic performance, and to keep track of individual’s work record. By understanding team member’s history and presence, individual can increase his/her trust on each other, and consequently increase the willingness to transfer knowledge.

EXISTENCE AND RICHNESS OF TRANSMISSION CHANNELS The majority of the literature focuses knowledge transfer on transmission channels. Knowledge transfer channels can be informal or formal, personal or impersonal (Holtham 1998). Impersonal channel is commonly used to transfer explicit knowledge while personal channels can be used to transfer both explicit and tacit knowledge. Information technologies can support all four forms of knowledge transfer but it has mostly been applied to impersonal means (Alavi 2001). Personal channel knowledge transfer is mainly through the interaction between individuals. The interaction between

individuals within organizations can been seen as organizational ties. Ties among members of a team are considered weak when they are distant or their interactions are infrequent (Hensen 1999). This implies that virtual teams usually have weaker ties than ordinary teams due to the physical distance. It is suggested that knowledge sharing (a form of knowledge transfer in which a member’s knowledge is pooled into a shared place from which other team members can get access) is facilitated by strong ties (Granovetter 1973). Alavi (2002) suggests that IT can play a key role in supporting strong ties in virtual team settings. We propose that KMS support of strong ties building can also enhance the effectiveness of knowledge flows among virtual team members.

Proposition 4: KMS support of stronger ties among virtual team members can enhance knowledge flow effectiveness by enriching communication channels.

ABSORPTIVE CAPACITY Absorptive capacity is defined as the ability not only to acquire and assimilate but also to use knowledge (Cohen 1990). Gupta (2000) argues that individual and organization’s absorptive capacity may differ even when exposed to the same situation and their desires to acquire knowledge are the same. There are two alternative explanations to the difference in absorptive capacity. 1) The extent of prior related knowledge 2) the extent of homogeneity of the source and the destination (Govindarajan 2000). Related knowledge is essential because it can help single out relevant information. The homogeneity of the source and the destination within virtual teams is also important because if team members share common meanings or are alike in personal and social characteristics, more knowledge is likely to be gained through communication (Rogers 1995). Therefore, increasing homogeneity and prior related knowledge can enhance absorptive capacity, and therefore enhance knowledge flow effectiveness.

Proposition 5: KMS support of virtual teams’ prior related knowledge could enhance knowledge flow effectiveness by enhancing absorptive capacity.

Proposition 5: KMS support of virtual team members’ homogeneity could enhance knowledge flow effectiveness by enhancing absorptive capacity.

A good example of building prior related knowledge is project/team orientation in a virtual team environment prior to the project kicks off. Knowledge management systems should be able to design a module supporting this function. Homogeneity of knowledge sender and receiver is the degree to which two or more interacting individuals are similar in certain attributes, such as beliefs, education and social status. Homogeneity can be used as one of the criteria for virtual team member selection.

SUMMARY AND CONCLUSIONS Although virtual teams claim to be able to meet the increasing needs of utilizing dispersed specialized knowledge within organizations (Boudreau 1998), they inherently limit the effectiveness of knowledge flows due to their temporal and spatial boundaries. Acknowledging its limitation to knowledge flows, we proposed the means by which KMS could support knowledge flow effectiveness in virtual team settings. External memory, mutual understanding, trust, ties, prior related knowledge and homogeneity are identified as critical issues that KMS should support. This study has implications on KMS functionality design for practitioners and future testable hypotheses development for the academia.

REFERENCES

References are available upon request.