Course: ATKM 952 801 Knowledge Management in Business Student: Mr.Poj Paniangvait ID: 502152009 Title: Knowledge Absorption for Rural Blue Collars

Abstract:

Nowadays, business becomes globalization. Integration of world new economy force business to find the way to survive. In Thailand, most entrepreneurs or SME move their business to run in rural area that gives them more benefits. BOI (Board of Investment) investment zone is an example that gives business with special privilege such as exemption of import duty on machinery, 8 years exemption of corporate income tax and others. But they also face another problem about training of their rural workers that come from agriculture sector. We believe that knowledge management tools can be the way to transfer the business knowledge gradually will make the workers can absorb the business knowledge faster and more efficiency. Our goal is to make them to be knowledge worker in learning organization workplace.

Definitions:

New Economy

In term of knowledge management means economy that evaluate competency of corporate in term of build value add from assets. That is not only tangible asset but also intangible asset.

Knowledge

Usually knowledge means:

(i) expertise, and skills acquired by a person through experience or education; the theoretical or practical understanding of a subject, (ii) what is known in a particular field or in total; facts and information or (iii) awareness or familiarity gained by experience of a fact or situation. (Wikipedia.org, 2008)

Understanding gained by actual experience; range of information; clear perception of truth; something learned and kept in the mind (Merriam-Webster, 2008)

But in area of knowledge management, knowledge can be defined more meaning as:

“The sum of what is know: a body of truth, principles, and information that, in a business context, guide operation” (American Society of Training and Development, 2008) “Knowledge is of two kinds, We know subject ourselves, or we know where we can find information on it” (Samuel Johnson, 2008)

Hideo Yamazaki, who is Japanese KM specialist, described the Pyramid of Knowledge as level of knowledge. Each type of knowledge is develop from bottom up as

Data -> Information -> Knowledge -> Wisdom

Data is facts that come from observation but not yet to process and analyze. Information is data that has been analyze for specific purpose. Knowledge is information that has been comparing and link with other knowledge to be understanding and can use with specific purpose. Wisdom is knowledge that has been applied for solve some problem or develop work.

Wisdom

Knowledge

Information

Data

(Bundee Bunyakij, 2003:14)

Michael Polanyi and Ikujiro Nonaka has given definition of knowledge as iceberg as called “Iceberg of Knowledge. That we should understand is knowledge has been divided to 2 types, Tacit Knowledge and Explicit Knowledge. Tacit Knowledge is non- document and difficult to identify. That can be explain as know how, experience, personal talent, institution and innovation. And Explicit Knowledge is documented, codified and archived. That can be explaining as customer list, patent, trademark, business plan and marketing research. Knowledge Management (KM)

“Knowledge Management is a discipline that promotes an integrated approach to identifying, managing and sharing all of an enterprise’s information assets, including database, documents, policies and procedures as well as unarticulated expertise and experience resident in individual workers” Gartner Group

“Knowledge Management is a process to transform data to be information for improving to be knowledge. For create innovation to solve problem or develop work.” (Boonchai Sirimahasakorn, 2006)

“Knowledge Management is the leveraging of knowledge in an organization for the purpose of capitalizing on intellectual capital” (American Society for Training and Development, 2008)

“Systematic approaches to help information and knowledge emerge and flow to the right people at the right time to create value” (The American Productivity and Quality Center (APQC), 2008)

“Focuses on how and organization identifies, creates, captures, acquires, shares and leverages knowledge. Systematic processes support these activities, also enabling replication of successes. All of these are specific actions organization take to manage their knowledge.” (Melissie Rumizen of Buckman Laboratories, 2008)

Knowledge Worker

Knowledge Worker is specialist who facilitates data to be information and develop to be knowledge and wisdom.

Learning Organization

Chris Argyris and Donald Schön (1978) defined organizational learning (OL) as: "the detection and correction of error". Fiol and Lyles later define learning as "the process of improving actions through better knowledge and understanding" (1985). Dodgson describes Organizational Learning as: The way firms build, supplement, and organize knowledge and routines around their activities and within their cultures and adapt and develop organizational efficiency by improving the use of the broad skills of their workforces. (1993). Huber states that learning occurs in an organization "if through its processing of information, the range of its [organization's] potential behaviors is changed" (1991). A "learning organization" is a firm that purposefully constructs structures and strategies, to enhance and maximize Organizational Learning (Dodgson, 1993). The concept of a learning organization has become popular since organizations want to be more adaptable to change. Learning is a dynamic concept and it emphasizes the continually changing nature of organizations. The focus is gradually shifting from individual learning to organizational learning. Learning is essential for the growth of individuals; it is equally important for organizations. Since individuals form the bulk of the organization, they must establish the necessary forms and processes to enable organizational learning in order to facilitate change.

OL is more than the sum of the parts of individual learning (Dodgson, 1993; Fiol & Lyles, 1985). An organization does not lose out on its learning abilities when members leave the organization. Organizational learning contributes to organizational memory. Thus, learning systems not only influence immediate members, but also future members, due to the accumulation of histories, experiences, norms, and stories. Creating a learning organization is only half the solution to a challenging problem (Prahalad & Hamel, 1994). Equally important is the creation of an unlearning organization which essentially means that the organization must forget some of its past. Thus, learning occurs amidst such conflicting factors (Dodgson, 1993).

KM Theories:

Knowledge Management

An umbrella term for making more efficient use of the human knowledge that exists within an organization. Knowledge management is the 21st century equivalent of information management. It is essentially an industry trying to distinguish itself with specialized groupware and business intelligence (BI) products that offer a wide range of solutions

The phenomenon at the heart of knowledge management is also the least well defined. Everything has a claim to being knowledge – some of the triumphs attributed to knowledge were only a few years ago being laid at the door of information. The key difference, where experts seem to agree, is that Knowledge is the application of information to create some form of value. That is still pretty broad, and covers a multitude of sins as well as virtues. The key guideline for knowledge managers is (1) to start with strategic goals and desired outcomes, (2) work out the bits where the application of knowledge can advance those goals, (3) do it.

http://www.techweb.com/encyclopedia/defineterm.jhtml?term=knowledge management&x=&y= Double-Loop Learning

Three types of organizational learning (Argyris and Schön)

1. Single-loop learning. This occurs when errors are detected and corrected and firms continue with their present policies and goals. According to Dodgson (1993), Single-loop learning can be equated to activities that add to the knowledge-base or firm- specific competences or routines without altering the fundamental nature of the organization's activities. Single-loop learning has also been referred to as "Lower-Level Learning" by Fiol and Lyles (1985), "Adaptive Learning" or "Coping" by Senge (1990), and "Non Strategic Learning" by Mason ('93).

2. Double-loop learning. This occurs when, in addition to detection and correction of errors, the organization questions and modifies its existing norms, procedures, policies, and objectives. Double-loop learning involves changing the organization's knowledge- base or firm-specific competences or routines (Dodgson, 1993). Double-loop learning is also called "Higher-Level Learning" by Fiol and Lyles (1985), "Generative Learning" or "Learning to Expand an Organization's Capabilities" by Senge (1990), and "Strategic Learning" by Mason (1993). Strategic learning is defined as "the process by which an organization makes sense of its environment in ways that broaden the range of objectives it can pursue or the range of resources and actions available to it for processing these objectives." (Mason, 1993:843)

3. Deutero-learning. This occurs when organizations learn how to carry out Single-loop learning and Double-loop learning. The first two forms of learning will not occur if the organizations are not aware that learning must occur. Being aware of ignorance motivates learning (Nevis et al., 1995). This means identifying the learning orientations or styles, and the processes and structures (facilitating factors) required to promote learning. Nevis et al., (1995) identify seven different learning styles and ten different facilitating factors that influence learning. For example, one of the facilitating factors is identifying the performance gap between targeted outcomes and actual performance. This awareness makes the organization recognize that learning needs to occur, and that the appropriate environment and processes need to be created. This also means recognizing the fact that lengthy periods of positive feedback or good communication can block learning (Argyris, 1994).

Double-loop learning and Deutero-learning are concerned with the why and how to change the organization, while Single-loop learning is concerned with accepting change without questioning underlying assumptions and core beliefs. Dodgson states that the type of Organizational Learning also depends on where in the organization the organizational learning occurs. Thus, learning can occur in different functions of the organization such as research, development, design, engineering, manufacturing, marketing, administration, and sales. Five Disciplines

For Peter Senge (1990), change is teaming and learning is change. Thus, it is possible for organizations to learn to change because "deep down, we are all learners". In his book "The Fifth Discipline", Senge wants to destroy the illusion that the world is created out of separate, unrelated forces. When we give up this illusion, we can then build 'learning organizations', organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together. Managers must learn to detect seven organizational 'learning disabilities' and use the "Five Disciplines" as antidotes to them.

The five component technologies in the Five Disciplines model from Senge are:

1. Systems Thinking (the integrative [fifth] discipline that fuses the other 4 into a coherent body of theory and practice)

2. Personal Mastery (people should approach life and work "as an artist would approach a work of art")

3. Mental Models (deeply ingrained assumptions or mental images "that influence how we understand the world and how we take action")

4. Building Shared Vision (when there is a genuine vision "people excel and learn, not because they are told to, but because they want to")

5. Team Learning (team members engaging in true dialogue with their assumptions suspended)

All these 5 disciplines must be employed in a never-ending quest to expand the capacity of the organization to create its future. Learning Organizations are those that are able to move past mere survival learning to engage in generative learning - "learning that enhances are capacity to create".

Knowledge Creation

Knowledge Creation is two dimensions of epistemological and ontological that takes place with spiral. A spiral emerges when the interaction between tacit and explicit knowledge is elevated dynamically from a lower ontological level to higher levels.

SECI Model

There are four key processes through which tacit and explicit knowledge interact, namely, socialization, externalization, combination and internalization. Together, these processes make up the SECI principles (see figure below), which provide a set of pointers that can be used by managers to ensure that they are facilitating effective knowledge and learning in their ongoing projects and programmers.

Detailed description of the process

1. Socialization consists in sharing tacit knowledge with others by way of mentoring (sharing internal knowledge, skills and insights). Tacit knowledge can be socialized by mentoring, imitation, observation and practice, all of which result in 'shared knowledge'.

2. Externalization creates conceptual knowledge and is the process of converting tacit knowledge into explicit knowledge. Tacit knowledge is conceptualized through images or words; in this case, writing transforms tacit knowledge into an explicit form. This externalized mode of 'knowledge conversion' is produced as a result of a dialogue between people who transform tacit knowledge into explicit knowledge.

3. Combination is a mode of knowledge conversion which involves the combining of different types of explicit knowledge. This happens when people exchange knowledge, for instance via documents, telephone and meetings.

4. Internalization converts explicit knowledge into tacit knowledge. It consists in 'learning by doing', which is a process that occurs when the previous modes of knowledge conversion (socialization, externalization and combination), are internalized in people's minds as tacit knowledge, which is represented by mental images or models. Intellectual Capital

Intellectual capital is a term with various definitions in different theories of management and economics. Accordingly its only truly neutral definition is as a debate over economic "intangibles". Ambiguous combinations of human capital, instructional capital and individual capital employed in productive enterprise are usually what is meant by the term, when it is used to actually refer to a capital asset whose yield is intellectual rights.

Workplace Learning

Workplace learning definition which is applicable for use in most organizational situations. The key issues have been identified as:

• the learning context; • the learning reason; • the learning process; • the learning outcomes; and • sustained development.

Workplace learning involves the process of reasoned learning towards desirable outcomes for the individual and the organization. This Workplace learning: developing an holistic model outcomes should foster the sustained development of both the individual and the organization, within the present and future context of organizational goals and individual career development.

Learning in Action

Learning in Action is the latest knowledge theory that most simply between other theory. That aim to improve of bottom line of learning rather than releasing human potential. And because of it’s simple to implement and return short time result.

Learning in Action has 3 learning mode:

1. Intelligence Learning. Search, Inquiry and Observation 2. Experiential Learning. Reflects and Review 3. Experimental Learning. Hypothesis and Test, Exploration

For an implement of Learning in Action, understanding of learning process, learning disabilities and support learning environment are required. All of learning mode has to build facilitator for lead learning. Problem Specification:

From the past, industrial era, business evaluate their heath with financial key performance index (KPI). That base on profit margin ratio, capital turnover rate, contribution margin ratio, debt equity ratio, cash liquidity and so on. They evaluate only from tangible asset.

Nowadays, all things have been changed. Business in new economy has to evaluate their performance from both tangible and intangible assets. Some how the intangible asset make more value to business than the tangible. Especially high technology corporate ratio of tangible asset: intangible asset is nearly 20:80. That is reason why business finds the way to manage their intangible asset. Knowledge Management is their answers

“In year of 2008, world economy trend become to be “Expectation Economy”. It means an economy inhabited by experienced, well-informed consumers from Canada to South Korea who have a long list of high expectations that they apply to each and every good, service and experience on offer.” (http://www.trendwatching.com/briefing/, 2008)

The above example is world economy trend in 2008. Business has been impact more and more. From the Porter’s Five Force model, business can understand and classified the impact more clearly to set their business strategy.

(http://www.valuebasedmanagement.net/methods_porter_five_forces.html, 2008) The Five Forces model of Porter is an outside-in business unit strategy tool that is used to make an analysis of the attractiveness (value) of an industry structure. The Competitive Forces analysis is made by the identification of 5 fundamental competitive forces:

1. The entry of competitors (how easy or difficult is it for new entrants to start to compete, which barriers do exist) 2. The threat of substitutes (how easy can our product or service be substituted, especially cheaper) 3. The bargaining power of buyers (how strong is the position of buyers, can they work together to order large volumes) 4. The bargaining power of suppliers (how strong is the position of sellers, are there many or only few potential suppliers, is there a monopoly) 5. The rivalry among the existing players (is there a strong competition between the existing players, is one player very dominant or all all equal in strength/size)

As a sixth factor could be added: government.

Porter's competitive force model is probably one of the most often used business strategy tools and has proven its usefulness on numerous occasions. Porter's model is particularly strong in thinking outside-in. Care should therefore be taken not to underestimate or underemphasize the importance of the (existing) strengths of the organization (inside-out) when applying this five competitive forces framework of Porter.

The Five Forces model (Market/Industry Attractiveness) of Porter can be seen as one of two dimensions in maximizing corporate value creation. The other value creation dimension is how well a company performs relatively towards its competitors (Relative Competitive Position), for which two other Porter-models are frequently used: the Value Chain framework and Porter's Competitive Advantage.

(http://www.valuebasedmanagement.net/methods_porter_five_forces.html, 2008)

In business that set their business strategy most of them take care for customer needs. Business has to less their cost and still keeps quality. Business applies the quality management in their business such as 5S, QCC, ISO 9001, ISO 14001, GMP/HACCP, BRC, and TQM. No doubt, their competitors also have it. Business setup plant in rural area, they gain much of benefits. But it also still has some problems about turn over worker that is quite big hidden cost for them. Does business face the end of their improvement? Have others weapon available to win competitors? Knowledge Management is another tool in the era.

Peter Drucker wrote in Post-Capital, the best seller in 1993, as “Knowledge is the new basis of competition in a post-capitalist society”.

In era of Economy of speed, organization must to have  Continuous learning  Existing knowledge management  Creativity of new knowledge  Expanding of knowledge

To generate “value” for customer and be “vault” of organization

In the New Economy, radical change and strong impact, business has to learn as fast as possible for response customer needs.

The Problem and KM:

The problem is business face high rate of turnover of rural blue collar workers. There are three domains involve blue collar background, knowledge of corporate and knowledge pipeline. Interview information from human resource department, we know that interesting issue that we should do is how to make blue collar to be knowledge worker. In sense of Knowledge Management, we decide to understand the knowledge. Especially how to integrate company’s knowledge with our blue collars’ knowledge.

t OD g te a -Personal tr -S s a Background H

ea - Education -Id as Blue Collar H - Mind Set

m

e l

b

o r

p - t LO s g

Tacit Knowledge a e t H a r - World Class t S - Problems, Ideas and s a

Business Standard H Strategies Has-problem Has-Idea H Knowledge - Innovation a Knowledge Absorption s - S

t H Equipment/Machine r a a t e code name : I0111 s

- g p t r o Simplify

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Knowledge

H a Pipeline s - Id e a - Traditional Training H a s -S t ra te g t e-Learning

Ideas and Strategy to Solve the Problem

We pick up one of the ideas that how we convey knowledge absorption to our rural blue collar. We decide to use “Learning in Action” with this time as strategy. Because is the easiest KM tool to understand and implement. And also returns us with fast result.

For beginning of using KM tool in business, we select Intelligence Learning mode for searching, inquiring and observing blue collar worker. In term of their personal background, education and mind set. To avoid Learning Disabilities issue as biased information flawed interpretation and inaction. And build Support Learning Environment as recognize and accept difference, provide timely feedback, stimulate new ideas and tolerate errors and mistake. After we collect enough information, human resource department will set up necessary materials and plan as followed:

Phase I: Learning in Action Timeline (Month) 0 1 2 3 4 5 6 • Knowledge capture x------x (Acquiring Information) • Categorization of captured knowledge x-- x (Interpreting Information) • Developing information technology infrastructures and applications for the x------x distribution of knowledge (Applying Information) • Educating employees on the creation, sharing and use of knowledge. x------x (Applying Information)

That will be beginning of creating knowledge worker and learning organization. We can evaluate the result and plan to use others knowledge management tools in next phases.

Conclusion

Even knowledge absorption for rural blue collars has been implementing. It is just only little point of the interesting domains. Learning Organization is most important target to increase competitive capability of business in long terms.

Takeuchi and Nonaka remind us that knowledge, unlike information, is about, “commitment and believes; it is a function of a particular stance, perspective or intention. In this respect, the creation of new knowledge is as much about ideals as it is about idea.” We really need to contemplate this wisdom. It can help us see more clearly the work that we name as Knowledge management. We need to understand that we are working with “ideals,” the strong energies that power human work. People want to learn and grow. We want to work for purposes we believe in. Working for an organization that is intent on creating knowledge is a wonderful motivator, not because the organization will be more profitable, but because our live will feel more worthwhile. Of the many learning available from our colleagues, we find this the most promising. References Argyris, Schon, “ On Organizational Learning”, 1978.

Argyris, C. and Schon, D. (1978). Organizational Learning: A theory of action perspective, Addison-Wesley, Reading MA, 1978.

David A. Garvin, “Learning in Action: A Guide to Putting the Learning Organization to Work”, 2000.

Margaret Wheatley, “Can Knowledge Management Succeed Where Other Efforts Have Failed?”; 2000, page 8

Nonaka, I. and Takeuchi, H. (1995), The Knowledge Creating Company, Oxford University Press, New York, 1995.

Pamela Matthews., (1999) “Workplace learning: developing an holistic model” The Learning Organization Volume 6 · Number 1 · 1999 © MCB University Press: 18– 29.

R Suresh, “KM Overview”, 2002.

Senge, P. M. (1992), The Fifth Discipline, Random House, Sydney.