Fachhochschule Worms

European Business Management

DIPLOMA THESIS

The Role of Knowledge Management in the 

context of the Corporate University Movement

by

Lena Schornstein
12 / 2001

Table of contents

1. Executive Summary ... 6

2. Introduction ... 10

3. Knowledge Management ... 13

3.1. Generic definition and context of knowledge management ... 13
3.1.1. Rationale of knowledge management ... 13
3.1.2. Brief history of knowledge management ... 14
3.1.3. The knowledge hierarchy ... 17
3.1.4. Nature of knowledge ... 19
3.1.5. Typology of knowledge ... 19

3.2. Application of knowledge management ... 22
3.2.1. Comprehensive knowledge management ... 22
3.2.2. Key knowledge management strategies ... 24
3.2.3. The knowledge management value chain ... 26
3.2.4. Knowledge management key processes ... 28
3.2.5. Knowledge management enablers ... 31
3.2.6. The knowledge management framework ... 34

3.3. Benefits and future of knowledge management ... 35

4. Corporate university ... 37

4.1. Generic definition and context of corporate universities ... 37
4.1.1. Economic rationale of corporate universities ... 37
4.1.2. Brief history of corporate universities ... 39
4.1.3. Positioning of corporate universities ... 41
4.1.4. Strategic orientation of corporate universities ... 44

4.2. Objectives of a Corporate University ... 46
4.2.1. Vision and mission ... 46
4.2.2. Generic education objectives ... 47
4.2.3. Company specific development objectives ... 48

4.3. Key success factors of operating a corporate university ... 49
4.4. e-learning - learning highways of the future ... 53
4.5. Key trends ... 56
4.6. Benefits of corporate universities ... 58

5. Knowledge management and corporate universities ... 60

5.1. Positive synergies between both management concepts ... 60

5.2. The benchmark study ... 63
5.2.1. Benchmark with the typical corporate university ... 64
5.2.2. Best practice matrix compared to benchmark results ... 67
5.2.3. Conclusions of the benchmark study ... 72

6. Towards a best practice model ... 76

6.1. Best practice role of corporate universities in the context of knowledge management ... 76
6.1.1. Qualification of all employees ... 77
6.1.2. Communication ... 78
6.1.3. Strong top management support ... 79
6.1.4. Provide leadership ... 80
6.1.5. Contribution to knowledge generation and sharing ... 81
6.1.5.1. External and internal knowledge acquisition ... 81
6.1.5.2. Organisational knowledge creation process ... 83
6.1.5.3. Corporate university role in the context of knowledge sharing ... 86
6.1.5.3.1. Corporate training programs ... 86
6.1.5.3.2. Knowledge fairs and informal brainstorming ... 87
6.1.5.3.3. Benchmarking ... 87
6.1.5.3.4. Learning communities and networking ... 88
6.1.5.3.5. Strategic learning partnerships ... 89

6.2. Best practice role of knowledge management in the context of the corporate universities ... 90
6.2.1. Knowledge database ... 92
6.2.2. Document management technologies ... 93
6.2.3. Corporate library ... 94
6.2.4. Collaborative learning technologies ... 94
6.2.5. Web technologies ... 95

7. Glossary ... 98

8. www-Glossary ... 100

9. Appendix ... 104

Table of figures
Illustration 1: The knowledge hierarchy ... 17
Illustration 2: The knowledge value chain ... 26
Illustration 3: Knowledge management process chain ... 28
Illustration 4: Key enablers of knowledge management ... 31
Illustration 5: IT support to knowledge processes ... 33
Illustration 6: Knowledge management framework ... 35
Ilustration 7: The amazing growth of corporate universities ... 40
Illustration 8: Positioning of the corporate universities ... 43
Illustration 9: Key factors that leaded to the rise of the corporate university concept ... 63
Illustration 10: Characteristics of the typical corporate university ... 65
Illustration 11: Best practice matrix ... 67
Illustration 12: Benchmark matrix ... 69
Illustration 13: European matrix ... 70
Illustration 14: US- American matrix ... 71
Illustration 15: Knowledge creation theory by Nonaka and Takeuchi 1997 ... 84
Illustration 16: Knowledge support technologies in the process of corporate education ... 91
Illustration 17: Increasing use of Web technologies ... 97

Table of figures of appendix
Illustration 1: Learning methods of today and in the near future ... 104
Illustration 2: Learning technologies used at surveyed corporate universities ... 105
Illustration 3: Knowledge management technologies used at benchmarked corporate universities ... 105
Illustration 5: Questionnaire of the industry benchmark study ... 106

1. Executive Summary

Since the mid 1990s the business world recognised the importance of lifelong learning, continuous innovations, and intensive knowledge sharing. New management concepts such as performance management, knowledge management and corporate universities increasingly emerged, which will undoubtedly determine the future success or failure of global companies, facing unpredictable market conditions. Since businesses move towards a knowledge-driven economy, innovation and new knowledge creation have become key success factors within any industry. With the rise of Web and multimedia technologies companies have been able to easily capture, store, organize, share and apply a huge amount of different data and information. Nowadays, important knowledge and expertise, formerly residing in the heads of the employees, can be rapidly transmitted anytime, at any place and anywhere around the world. But many companies seldom consider knowledge management as any social process between individuals committed to constantly communicate explicit and tacit knowledge.

For this reason many knowledge management concepts within organizations remain conservative and technical instruments without any strategic use. Successful and intensive knowledge sharing requires a great deal of corporate understanding, values, culture and leadership in order to avoid the so-called "not-invented-here syndrome", a culture of knowledge hoarding and indifference among the work force. Corporate universities significantly stimulate and encourage employees to constantly share and to acquire professional and managerial know-how on-the-job, transmitting corporate values and expertise. A growing number of industries introduced corporate universities in order to align corporate training to business strategies, to transform companies to successful learning organizations, and to provide managers as well as employees with critical expertise and leadership. Nevertheless, many corporate education programs develop to a one-day promotional show without any concrete strategy. They serve as a nice-to-have instrument, primarily aiming at attracting and retaining employees.

And indeed, most attendants of corporate university classes return to work and do not apply any of their new acquired skills. Knowledge management tools and techniques especially facilitate post-class learning activities, enabling employees to make use of a wide variety of communication, collaboration and information tools such as e-learning, knowledge databases, Web technologies etc. Furthermore knowledge management considerably supports pre-learning and classroom-based training within the context of corporate education. Generally, the term "shared learning" portrays what many companies are finding - that knowledge management and corporate learning are often two sides of the same coin covering common corporate values, objectives, structure and processes such as promoting lifelong learning, distributing best practice etc. Although they both show different distinctions and approaches at the strategic level, they are increasingly similar in terms of tactics and instruments they employ that include among other things vision and leadership, culture change, networking, infrastructure and technologies. Nevertheless, in practice most companies tend to keep both new emerged management concepts separate from an organizational point of view.

This work paper aims at convincing industries of the many benefits by strategically organizing knowledge management and corporate university movements under one roof. An empiric industry benchmark study, titled "The role of knowledge management in the corporate university movement", based upon a standardized questionnaire was sent to managers and Chief Learning Officers of leading corporate universities worldwide in order to investigate the current business situation of interrelating knowledge management to corporate universities and vice versa. Within the scope of the worldwide industry benchmark study 80% of the surveyed corporate universities quoted that knowledge management has a major impact on corporate education. About 60% of the surveyed companies implemented knowledge management before the year 2000, while corporate universities have been founded between 1997 and 2001. Thereby, most companies tend to purchase critical knowledge by strategic learning alliances (100%), followed by business units (80%), consultants and literature (both 60%). Critical knowledge is often created at corporate universities in form of projects, case studies, discussions and workouts, where different business units meet to exchange expertise and experiences. Informal events and meetings regularly supplement classroom-based training, facilitating intensive networking and brainstorming that are key enablers of successful knowledge creation and sharing. Furthermore, the majority of the produced know-how at the corporate university, about 80%, is stored in knowledge databases and expert directories, occasionally supplemented by yellow pages, intelligent agents and best practice databases.

The majority of the interviewed companies quoted that knowledge transfer at the corporate university directly contribute to the company performance. Intensive knowledge sharing principally results from networking, strategic learning alliances and top management commitment for best practice purpose, and benchmarking and better education means. Although most organizations still concentrate on traditional classroom-based training and on-the-job learning including face-to-face interaction and learning by doing, the application of innovative technologies such as e-learning, virtual campus and computer-based training etc. will tremendously increase within the next years, considerably supporting and supplementing corporate learning activities. As expected the USA is trendsetter in the field of communication and information technologies, whereas Europe and in particular Germany significantly date back by aligning corporate education to knowledge management. Investment in corporate education seems to be worth it since 80% of the surveyed companies affirmed that attendants at corporate universities apply most of their new acquired skills and tactics on-the-job, and about 80% quoted that knowledge management has a major impact on corporate education.

2. Introduction

The global corporation of today faces new challenges. Since the beginning of the e-revolution in the early 1990s that spilled out innovations such as the Internet and the World Wide Web, geographical, biological and language barriers could have been overcome. At the same time international markets have been increasingly deregulated. As a consequence trade and business processes multiplied worldwide, resulting in a more aggressive and unpredictable competition, so-called hyper competition¹. The time to market for new innovations and products decreased while the need to respond quickly to market changes increased significantly. In this context there was a worldwide consensus that knowledge and innovation will replace efficiency and quality as main source of competitive advantages.

Companies will have to deliver continuous improvements and innovations whilst simultaneously limiting imitation. Significant emphasis has been given to human resources that represent the intellectual capital of the company, and the continually application of old knowledge to produce new knowledge, a process that often leads to innovation². In order to keep the competitive edge it is crucial to make strategic use of employees as main productive resource. Nowadays, buzzwords such as empowerment, teamwork and life long learning are acknowledged to be highly critical to the challenges facing business. By changing the traditional roles within a company and by creating new ways of work collaborative working and management, corporations can become more flexible to market changes and may better coordinate their intellectual capital. Today employees are encouraged to take charge of solving local problems by being proactive.

They need to develop their knowledge and have high conceptual and social capabilities. Managers serve increasingly as their consultants becoming more like relationship managers for training, coaching and coordination of knowledge workers³. Middle management vanishes due to an increased focus on teamwork and projects, giving rise to downsizing and restructuring in many companies. Entire organizations are opting for fewer boundaries and flatter hierarchies, characterized by decentralized decision making.

Middle management vanishes due to an increased focus on teamwork and projects, giving rise to downsizing and restructuring in many companies. Entire organizations are opting for fewer boundaries and flatter hierarchies, characterized by decentralized decision making. Simultaneously, within such global, decentralized and team-based organizations it is even harder to effectively transfer knowledge. Knowledge communities, which share knowledge and expertise within groups, are becoming the new organizational form across traditional boundaries of business and function.

Strategic knowledge alliances are a key factor in innovation and need to be continually promoted by the company. Globally, innovative companies support organizational and continuous learning. This has given rise to a new strategic movement – concerted education and development training. Individuals have to keep pace with the fast changing requirements, updating their skills and expertise and are becoming increasingly committed to taking charge of their own personal education. Correspondingly, companies provide corporate development training aiming to promote knowledge creation and sharing amongst their employees. Recently, companies worldwide have tended to focus on the popular and successful concept of the corporate university.

This serves as a strategic umbrella for managing corporate education and training with significant emphasis on aligning management training to corporate business objectives and strategies. On the one hand corporate universities impart professional knowledge to employees and managers. On the other hand corporate universities increasingly act as change agents facilitating a company’s movement towards best practice and competitive advantage. There is a strong interrelation between innovation, knowledge management and the concept of the corporate university. These have been kept separate from an organizational structure point of view until now, although both show common objectives and concepts. Corporate education is best complemented by a comprehensive knowledge strategy including learning modules as well as utilising key enablers of knowledge such as technology, culture, measures and strategies. Special focus will be given on the contribution of corporate universities to the processes of knowledge generation and sharing, which ultimately leads to innovation as a critical area of competitive advantage for each company in today’s unpredictable surroundings.

[...]

1 Johanessen: Aspects of innovation theory based on knowledge management, pg.123

2 "Intellectual capital is an effort by an organization to place a financial value on its tacit and explicit knowledge" as defined at http://www.vnulearning.com/kmwp/one.htm [30.11.2001]

3 http://www.apqc.org/PresFiles/Hofer-Alfeis-SiemensPresentation/sld017.html [15.9.2001]