KNOWLEDGE MANAGEMENT - JAN 2017

BACHELOR OF BUSINESS ADMINISTRATION WITH HONOURS

SEMESTER JANUARY 2017

CBKI4103

KNOWLEDGE MANAGEMENT

MATRICULATION NO : 791016145081001

IDENTITY CARD NO. : 791016-14-5081

TELEPHONE NO. : 019-6641264

E-MAIL : arman_saad@yahoo.com

LEARNING CENTRE : SHAH ALAM

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

DESCRIPTION PAGE

Introduction
- Purpose of the knowledge management 3

Important of knowledge management

- PB Property 4
- PB Education 4-5
- PB Road & Highway Maintenance 5
- PB Research & Development (R&D) 5

The specific knowledge in people, process

& product 6-9

SECI Model
- Socialisation 10
- Externalisation 10-11
- Combination 11
- Internalisation 11

Socialisation & Externalisation 12

Combination & Internalisation 13-14

Conclusion 15

References 16

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

INTRODUCTION

Purpose of the Knowledge Management (KM) in business

Knowledge management (KM) is the systematic management of an organization's knowledge

assets for the purpose of creating value and meeting tactical & strategic requirements; it
consists of the initiatives, processes, strategies, and systems that sustain and enhance the
storage, assessment, sharing, refinement, and creation of knowledge. KM involves the
understanding of:

 Where and in what forms knowledge exists; what the organization needs to know;
how to promote a culture conducive to learning, sharing, and knowledge creation;
how to make the right knowledge available to the right people at the right time; how
to best generate or acquire new relevant knowledge; how to manage all of these
factors so as to enhance performance in light of the organization's strategic goals and
short term opportunities and threats.
 Create/provide the right tools, people, knowledge, structures (teams, etc.), culture,
etc. so as to enhance learning; it must understand the value and applications of the
new knowledge created; it must store this knowledge and make it readily available for
the right people at the right time; and it must continuously assess, apply, refine, and
remove organizational knowledge in conjunction with concrete long and short term
factors.

An overview of the assignment content

The aim of this paper is to analysis a business scenario of Knowledge Management

(KM) in determine importance of managing knowledge and knowledge advantage at Protasco
Berhad (PB). PB business activities are organized into four main areas - Property
Development, Road and Highway Maintenance, R&D in Infrastructure Technology and
Education. The primary purpose of knowledge management is to approach in achieving PB’s
objectives by making the best use of the knowledge such as improved performance,
competitive advantage, innovation, the sharing of lessons learned, integration and continuous
improvement of the PB.

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

THE IMPORTANCE OF KNOWLEDGE MANAGEMENT TO PROTASCO BERHAD

(PB)

KM need to be practiced in PB to fulfils its mission, which reaches the corporate objectives
and strategies, and identifies the most valuable knowledge from the “sea of information”.
Through its operations PB acquires, creates, processes and stores a significant amount of data
and information, some of which is turned into knowledge. Since there are different
subsidiaries under PB, we can analysis how the important of managing knowledge for each
department and the details as below:

1. PB Property
 For PB Property, the concept of KM will give a better way of management and
also will generate more profit. It an alternative way enabled by technology and
produced by knowledgeable people such as architect and engineer.
 Implementing KM in PB Property, enables the employees especially architect and
engineer to learn from its corporate memory, share knowledge and identify
competencies in order to become a forward thinking, planning and learning.
 Practises KM in PB Property also can drive innovation, helps to attract new and
retain valuable customers that qualified to buy property, and in the process
increase organisational productivity and seeking the best practises in all PB
Property activities to providing a better service to customers.

2. PB Education
 Practices KM in PB Education gives most effective way to transfer efficient
methods, models, ideas, practice is creating network as field of interaction that
will provide circulation of them, as well as underpin innovation and development.
 KM of PB Education system must reflect and comprise information at all levels
starting from management level to student level in order to improve professional
knowledge of employees, to achieve quality of lecturers and students.
 PB Education is considered to be responsible for students’ achievements in a
democratic, contemporary and flexible educational system. So student’s

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

knowledge, skills, talents should be preserved in the knowledge base. It helps

them to create new knowledge and gives platform to newly enrolled students.
 Knowledge management in PB Education can provides techniques for capturing
tacit knowledge hidden in experts/individual mind and practices and records it for
future use. It is also useful for building knowledge, for problem solving and
decision making purpose. Quality and Service improvement is also achieved.

3. PB Road and Highway Maintenance

 PB road engineering has become a complex discipline, where road safety,
environmental and socio-economic issues are as important as technical design and
construction supervision.
 PB Road Care develop specify procedures for the establishment of criteria the
road safety, by analysing data from road condition and traffic surveys, and
developing estimates for cost improvement and maintenance.
 PB Road and Highway Maintenance attach much importance to the planning and
design of facilities to meet specific project environmental requirements while
incorporating financial constraints.

4. PB Research and Development (R&D)

 KM can decide the technical direction that the PB Research and Development
(R&D) should take, and through R&D, to provide leading-edge technologies that
will spawn new solutions in infrastructure technology
 PB Research and Development (R&D) provide detailed operational guidelines,
data and information for infrastructure technology to prevent future problems. It
also on-going monitoring and research to continue to provide improve
understanding and guidelines.

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

THE SPECIFIC KNOWLEDGE IN , PEOPLE, PROCESS AND PRODUCT IN PB

KM in organization such as PB is formed via unique patterns of interactions between

people, process and product. People generate, share, apply knowledge and stimulate
knowledge sharing. Process entails the methods to obtain, generate, arrange, share and
transfer knowledge. Product involves improved or create new product through KM. KM
solutions and knowledge can impacts on PB performance and the impacts can be on the
following:
1. People
2. Processes
3. Products

IMPACT ON PEOPLE
.People has an important role for knowledge management in PB. The whole success in
KM depends on the willingness of people in sharing their knowledge. Trust is a necessary
element for the willingness to share knowledge. This is achieved through combination of
motivation / recognition and rewards, realignment of performance appraisal systems, and
other measurement systems. Impacts on People KM can facilitate employee learning. KM
also causes employees to become more flexible and enhances their job satisfaction. KM
impacts people through: Employee Learning, Employee Adaptability and Employee Job
Satisfaction.

1. Impact on employees’ learning

- To better understand how PB manage and encourage knowledge creation among their
employees, we propose a model of knowledge creation that consist of four key
elements of SECI Model that together shall interact to form a knowledge spiral with
knowledge creation as an outcome. The four elements are, the SECI process
(knowledge creation through interactive transformation of tacit and explicit
knowledge)
 Socialization allows an individual to acquire tacit knowledge directly from
other workers through shared observations and experience. Example : through
joint activities such as meetings/informal chats
 Externalization involves transformation of tacit knowledge to explicit
concepts. Example: writing a report on lessons learned from a project.

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

 Internalization, tacit knowledge is transformed to explicit through

documentation and hands on experience and new knowledge is internalized.
Example: when employees preparing for a later project, can read it.
 Communities of Practices, it is an organic and self-organized group of
individuals who are dispersed geographically or organizationally, but
communicate regularly to discuss issues of mutual interest
2. Impact on employee adaptability
- The important element leads to adaptability regarding to change in getting the
competitive advantage and also evaluating the responsibilities on the part of employer
in order to maintaining certain steps for the betterment of his employees through
training and development, empowerment and culture.
- Berger, (1994) defined the “change” as it is a repetitive nature of practice in keeping
in the line of the organization for operating and performing the most successful
manners over its rivals. When an organization implements these manners in a true
spirit in creating the environment where an employee feels himself as a valuable
person in the organization. It can evaluate elements which lead to an organization to
adapt changes and according to that adaptability a learning based environment is
prevailed so that employees are willing to perform to that extent where the
organization is required. These elements are also lead to employee’s retention to be
remained loyal to organization’s goals and objectives.

3. Impact on employee job satisfaction

- Job satisfaction has been defined “as the feelings a worker has about his or her job or
job experiences in relation to previous experiences, current expectations, or available
alternatives” (Balzer, Kihm, Smith, Irwin, Bachiochi, Robie, Sinar & Parra, 1997, p.
7). In organizations employees sharing knowledge with one another, turnover rates
get reduced, affecting revenue and profit. Employees feel better because of their
knowledge acquisition and skill enhancement. Employees’ market value is enhanced
relative to other organizations’ employees KM also provides solutions to employees
for problems they encountered earlier and effectively address those. Additional
increases in employee job satisfaction derive from KM practices:

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

(1) Mentoring and training are excellent motivators;

(2) Communities of Practice provide intimate and socially validated control over their
own work practices

IMPACT ON PROCESSES
- KM represent the basic operations of knowledge, enablers provide the infrastructure
necessary for PB to increase the efficiency of knowledge processes. Knowledge
Management can include activities such as creation, sharing, storage, and usage for all
departments for each subsidiary under PB such as marketing, manufacturing,
accounting, engineering and human resources. These impacts can be seen along 3
(three) major dimensions as follows:
1) Impact on process effectiveness

 Select and performing the most suitable processes and making the best
decision
 Effectiveness is described as the capability of producing a specific, desired
effect, or in other words “getting the right things done” (Druker, 2004).
Improving process effectiveness supports company performance simply by
ensuring that each process delivers the results that it needs to.
Standardization also enhances process effectiveness by ensuring that
different parts of the organization are doing the same things in the same
way. It can smooth transitions between different systems and provide
better control over process and data quality.
2) Impact on process efficiency

 Performing the processes immediately and under low cost.

 Improving the efficiency gains in processes (example: faster, lower, cost
and less rework) are a high priority for their improvement initiatives
 Improve efficiency by eliminating duplication of work and reducing the
need for manual interventions.
3) Impact on process innovation

 As the adoption, creates, generate and implement new ideas, processes,

products or services.

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

 Innovation is the process that connects new ideas to new processes and
products (Aboelmaged, 2012) and requires organizations to go beyond
learning from repetition, defect correction, and a desire for reducing
process variation.
 Innovation performance can be positively impacted by process
improvement and process design. KM has been found to enable frequent
improved brainstorming, thus enhancing process innovation. KM can
enable organizations by better exploitation of new ideas. “The power of
intellectual capital is the ability to breed ideas that ignite value”

IMPACT ON PRODUCTS
- The important of knowledge management on product is gaining or sustaining product
success on market. If managed effectively, knowledge can be used to reduce NPI
(New Product Introduction) project time, improve quality and increase customer
satisfaction (Sixotte & Langley, 2000). Impact on product can be as follows:
1) Impact on value added products
 Value-added products are two of the best strategies PB can employ to
improve net profitability. Value-added products can open new markets, and
extend the marketing. KM processes can help organizations offer new
products or improved products that provide a significant additional value
as compared with earlier products
2) Impact on knowledge based products
 KM can have a significant impact on products that are knowledge based.
Example as consulting and software development.
 Consultants can quickly access and combine the best available knowledge
and bid on proposals that would otherwise be too costly or too time –
consuming to put together. PB can place solutions to software problems of
customer in a shareable knowledge base. Let customers download software
patches based on their answer to an automated ‘wizard ‘ system that
prompts customer with a series of questions aimed at diagnosing the
customer needs.

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

SECI MODEL
The SECI model is a well-known conceptual model that was first proposed by Nonaka
(1991 and expanded by Nonaka and Takeuchi, 1995). It describes how explicit and tacit
knowledge is generated, transferred, and recreated in organizations. While it was first
proposed within the context of business organizations, the model can easily be applied to
education, as explored by Lin, Lin, and Huang (2008) and Yeh, Huang, and Yeh (2011). We
can refer as the SECI Knowledge conversion Model as shown as below:

The SECI model consists of four modes of knowledge conversion:

1. Socialization (Tacit toTacit)

 It process converts tacit knowledge into new tacit knowledge through shared
experience and this takes place through every social and cultural process linked to
ongoing organizational activities (Martin-de-Castro et al., 2008). Socialisation
typically occurs in a traditional apprenticeship rather than from written manuals or
textbooks. Although it may also occur in informal social meetings outside of the
workplace, where tacit knowledge such as world views, mental models and mutual
trust can be created and shared and beyond organizational boundaries through the
interaction with customers and suppliers (Nonaka et al., 2000).
2. Externalization (Tacit to Explicit)
 It process articulates tacit knowledge into explicit knowledge, which happens when
the firm expresses formally its internal rules of functioning or when it explicitly sets
organizational goals and is captured by writing it down or on computer. When tacit

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

knowledge is made explicit, knowledge is crystallized thus allowing it to be shared by

others and to become the basis of new knowledge (Nonaka, et al., 2000).
3. Combination (Explicit to Explicit)
 It process converts explicit knowledge into more systematic sets of explicit
knowledge. Explicit knowledge is collected from inside or outside the organization
and then combined, edited or processed to form new knowledge while combination is
the process of converting said explicit knowledge into more complex and systematic
sets of explicit knowledge. The new explicit knowledge is then disseminated among
the members of the organization and creative use of computerised communication
networks and databases can facilitate this mode of knowledge conversion. When the
auditor of a company collects information from throughout the organisation and puts
it together in a context to make a financial report, that report is new knowledge in the
sense that it synthesises knowledge from many different sources in one context
(Nonaka et al., 2000).
4. Internalization ( Explicit to Tacit)
 It process embodies explicit knowledge into tacit knowledge, suggesting that we
internalize the explicit knowledge to our tacit knowledge. By internalising any
creation of explicit knowledge is shared throughout an organisation and converted
into tacit knowledge by individuals. Internalisation is closely related to `learning by
doing', for example, training programmes can help trainees to understand an
organization and themselves or reading documents or manuals about their jobs and
the organisation, trainees can internalise the explicit knowledge written in such
documents to enrich their tacit knowledge base. This tacit knowledge accumulated at
the individual level can then set off a new spiral of knowledge creation when it is
shared with others through socialisation (Nonaka et al., 2000).

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

SOCIALISATION AND EXTERNALISATION OF KNOWLEDGE IN PB

Socialisation (Tacit to Tacit)

It occurs when tacit knowledge is created through shared experience between
individuals (Nonaka & Konno, 1998). According to Nonaka, the socialization mode of
knowledge conversion in PB is ‘the knowledge-creating mode of converting tacit knowledge
to tacit knowledge. There are two types of socialization. First, in the former, the socialization
mode of knowledge conversion is a process of sharing experience and thereby creating
common tacit knowledge (such as shared mental models, general meeting, perspectives,
beliefs, and viewpoints). Informal activities (such as having a cup of tea or lunch with
colleagues outside the workplace) are exemplified as this type of socialization mode because
it promotes common understanding , shares systems of meaning, teaches own roles and
builds mutual trust in an organization through the sharing of experience. Socialization as the
mode of knowledge conversion is strongly practised in PB since there are different
subsidiaries, recognition of the importance of sharing experience in the face-to-face
environment in business PB settings can be found in the literature on organization theory.

Externalisation (Tacit to Explicit)

It occurs when an individual’s tacit knowledge is translated into comprehensible
forms that can be understood and expressed by others. Knowledge has been successfully
transferred when tacit knowledge (i.e., management wisdom) becomes explicitly stated, often
through exchange mechanisms such as two-way dialogue, active listening and the visual
depiction of ideas and concepts (Nonaka & Konno, 1998). According to Posner (2009), the
knowledge transfer gap is most evident when tacit knowledge is converted to explicit
knowledge (Externalization). It is apparent that the externalization mode of knowledge
conversion, which is an activity to make engineer explicitly express the desire or need to
create concepts, approximately corresponds to the function of expressing language meaning
to management’s PB (or the social language of Power). This is because it can be an explicit
activity, expressing something based on one’s own differentiated experience from those of
others. It is also because it can create order from chaos in the name of ‘future’ using
individual imagination (Co-operation architect and engineer in PB Property).

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

COMBINATION AND INTERNALISATION OF KNOWLEDGE IN PB

Combination (Explicit to Explicit)

It occurs when individuals or groups exchange and combine their different bodies of
explicit knowledge through social interactions thereby amplifying the explicit knowledge.
Nonaka and Konno (1998) explain that this conversion relies on three processes: collecting
and combining externalized knowledge; disseminating this knowledge; and, revising and
reconceptualizing the explicit knowledge to make it more usable and understandable.
Combination examples include academic forums and research processes (Posner, 2009), as
well as face-to-face meetings and audio or web-based conversations. Nonaka (1994) connects
combination with information processing in PB. This is simply because combining various
types of explicit knowledge does not occur without the transmissive nature of knowledge in
the explicit form, which enables people to share and identify with others. The new
combination of knowledge leads to creating new products, production methods, markets,
materials, and new system in PB.

Internalisation (Explicit to Tacit)

It occurs when newly created explicit knowledge is converted into the organization’s
tacit knowledge (Nonaka & Konno, 1998). This process can occur at an individual, group or
organizational level. Nonaka and Konno (1998) explain that explicit knowledge needs to be
embodied in action and practice, and internalized through “learning by doing”. Examples of
internalization include practicums, on-the-job training, simulations and experiments. Nonaka
(1994) associates internalization with organizational learning and action. The quintessential
tool of the internalization mode is through documentation and manuals that enable other
employees to indirectly embody what the members of a project experienced. Any other kinds
of explicit knowledge such as text, sound, video formats, or oral stories can facilitate the
internalization process. Training programmes also help employees in PB to understand the
organization’s PB and themselves. The internalization mode comprises the new and
(probably) creative experience assembled by members who have been engaged in a project
through other knowledge conversion modes of socialization, externalization and combination,
which in turn are embodied as organizationally internalized latent value systems or
knowledge bases. The internalization mode of knowledge conversion is approximately
consistent with the function of measuring language meaning in PB. This is because the

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

process enables the members in PB to internalize shared knowledge in an implicit (tacit)

form, which has a horizon of identification, maintaining and developing the latent value of
the organization. The internalization mode of knowledge conversion that highlights the
importance of the linkage of internalization processes and the other processes needed in order
to develop and expand the knowledge base in the PB.

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

CONCLUSION

Knowledge management (KM) is the systematic management of an organization's

knowledge assets for the purpose of creating value and meeting tactical & strategic
requirements; it consists of the initiatives, processes, strategies, and systems that sustain and
enhance the storage, assessment, sharing, refinement, and creation of knowledge. KM
initiatives help to improve business processes and can reduce business processing time
simply because they can share best practices. It also improves through conversations and
discussions that can generate valuable knowledge for forecast saving and cost reduction.
Organizational culture can change towards a knowledge sharing culture where employees are
driven to generate and share knowledge for the purpose of organisational improvement.
Employees are motivated to share their knowledge because they feel more valued for their
intellectual capabilities and skills when they can see their contribution towards improvements
in the organization.

KM can have impact on the organization performance and the impacts can be people,
processes and product. KM can have impacts on people based on employee learning,
employee adaptability and employee job satisfaction. Impacts on processes can be
effectiveness, efficiency and innovation. KM impacts on product also can be based on value
added product and knowledge based products.

SECI model in Nonaka’s theory of organizational knowledge creation has been examined
by PB in their organization. As per Ikujiro Nonaka there are four types of knowledge
creating process. First, socialisation - This process focuses on tacit to tacit. Tacit knowledge
goes beyond the boundary and new knowledge is created by using the process of interactions,
observing, discussing, analyzing, spending time together or living in same environment.
Second, externalisation - This process focuses on tacit to explicit. It helps in creating new
knowledge as tacit knowledge comes out of its boundary and became collective group
knowledge. Third, combination - is a process where knowledge transforms from explicit to
explicit knowledge. The explicit knowledge such as text, sound, video formats, or oral stories
can facilitate the internalization process.

CBKI4103
2
KNOWLEDGE MANAGEMENT - JAN 2017

REFERENCES

 Meso, P. and Smith, R. (2000) A Resource-Based View of Organizational

Knowledge Management Systems. Journal of Knowledge Management, 4, 224-
234.
 Myers, P. (1996) Knowledge Management and Organizational Design.
Butterworth-Heinemann, Oxford.
 Maertensson, M. (2000) A Critical Review of Knowledge Management as a
Management Tool. Journal of Knowledge Management, 4, 204-216.
 Masa’deh, R., Obeidat, B., Al-Dmour, R. and Tarhini, A. (2015) Knowledge
Management Strategies as Intermediary Variables between IT-Business Strategic
Alignment and Firm Performance. European Scientific Journal, 11, 344-368.
 Singh, S.K. (2008) Role of Leadership in Knowledge Management: A Study.
Journal of Knowledge Management, 12, 3-15.
 Obeidat, B., Al-Suradi, M., Masa’deh, R. and Tarhini, A. (2016) The Impact of
Knowledge Management on Innovation: An Empirical Study on Jordanian
Consultancy Firms. Management Research Review, 39.
 Aujirapongpan, S., Vadhanasindhu, P., Chandrachai, A. and Cooparat, P. (2010)
Indicators of Knowledge Management Capability for KM Effectiveness. VINE,
40, 138-203.
 Smith, T.A. (2006) Knowledge Management and Its Capabilities Linked to the
Business Strategy for Organizational Effectiveness. Unpublished PhD
Dissertation, Nova Southeastern University, Fort Lauderdale.
 Kushwaha, P. and Rao, M.K. (2015) Integrative Role of KM Infrastructure and
KM Strategy to Enhance Individual Competence: Conceptualizing Knowledge
Process Enablement. VINE, 45, 376-396.
 Masa’deh, R. and Shannak, R. (2012) Intermediary Effects of Knowledge
Management Strategy and Learning Orientation on Strategic Alignment and Firm
Performance. Research Journal of International Studies, 24,

CBKI4103
2