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 management 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 virtual team 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 innovation management (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 knowledge management 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 management system 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