The implementation of Knowledge Management in the practice of international active Small and Medium-Sized Enterprises with the special aspect of motivation and commitment

Table of Contents

0. Executive summary

1. Introduction and procedure
1.1. Research objective
1.2. Problem statement
1.3. Relevance of the topic
1.4. Structure of the work

2. Terms and definitions
2.1. Small and medium-sized enterprises (SMEs)
2.2. Knowledge and Knowledge Management (KM)
2.3. Motivation

3. Relevant theories
3.1. Theoretical approaches of Knowledge Management
3.1.1. Theory of Knowledge Management in general
3.1.2. Special theoretical approaches of KM for SMEs
3.2. Relevant theoretical approaches of motivation and commitment
3.3. Theoretical approaches for the special role of motivation and commitment in KM in SMEs

4. Practical aspects for the implementation of KM in SMEs
4.1. Practical aspects of the implementation of KM in SMEs in general
4.2. Practical aspects for supporting the motivation and the commitment of employees regarding the implementation of KM in SMEs

5. Conclusion and outlook
5.1. General Conclusion
5.2. Relevance of motivation, commitment and company culture
5.3. Critical Aspects
5.4. Outlook for the future

6. Sources

7. Appendix

List of Figures

Figure 1: The knowledge ladder

Figure 2: An integral knowledge management model

Figure 3: Intrinsic and Extrinsic Motivation as a Continuum of PLOC

Figure 4: Configuration of incentive systems for the KM in SMEs:

Figure 5: Practical approach with a general management scheme for KM

List of Tables

Table 1: Working motives and its incentives

Table 2: Theoretical approaches for the explanations for the behaviour regarding to kno wledge

List of abbreviations

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0. Executive summary

KM is and will be a more and more important issue for all companies in the future, especially for SMEs referring to the fast development of globalisation, if they don’t want to miss the connection to this trend. SMEs haven’t already adopted KM in the same way great companies has done it and often not as effective and systematic as it should be. So SMEs must improve their efforts in this direction and apply the right tools and processes of KM, also and especially referring to the motivational aspects, which are indispensable for it. The focus of this work lies therefore on the practical implementation of KM-Systems and furthermore on the special roles of motivation and commitment of the employees in this process. SMEs must improve their efforts in this direction and apply the right tools and processes of KM.

A it will shown, a knowledge-friendly culture and a proactive management support is very import for the success of the KM-process. This has to be combined with good motivational aids, incentive systems and a well planned commitment of and with the employees from the very first beginning of the KM-process. In the comprehensive view the whole organisational framework could be could be seen as a system of incentives, which either motivates or discourages the employees to search for new effective be­haviour within the KM-process.

SMEs should see the knowledge orientated trend as a positive pressure to make their homework in the mentioned way. The presented work provides the theoretical back­ground for the mentioned goals as well as practical tools and approaches towards KM in SMEs. Some helpful tools are presented in the appendix.

1. Introduction and procedure

1.1. Research objective

The aim of this work is to show the relevance and the importance of KM for small and medium-sized companies (SMEs), especially for those, which are international and global active. The focus lies then on the practical implementation of KM-Systems and furthermore on the aspects of motivation and commitment of the employees in this process. The latter is especially worked out, because they are often mentioned as a big hurdle for the application of KM in companies.^[1]

1.2. Problem statement

A lot of companies in Germany are not thinking about motivational aspects when plan­ning KM. But KM has to seen under these aspects in the same way like in other man­agement activities too. Over all is the question, how motivation and incentives have to be treated in KM, closely linked with a practical view on this theme, which works out benefits and tasks of it and communicate this issues clearly.^[2] Therefore motivation and the practical view are the special aspects of this work while analysing KM in SME. That is even more important for SMEs, because the haven’t already adopted KM in the same way great companies has done it and often not as effective and systematic as it should be.^[3]

1.3. Relevance of the topic

The factor “Knowledge” seems to determine more and more the welfare of societies and the success of companies. In many eyes knowledge will become or is still one of the most scariest and therefore worthiest resources that companies should look for. These circumstances for society and economy are best described with the terms “knowledge society” or “knowledge economy”.^[4] “Knowledge Management” (KM) is therefore seen as one of the most important factor for success, likewise in theory and in practice.^[5] That is even become more obvious referring to international and global active companies,^[6] also and especially for SMEs.^[7]

1.4. Structure of the work

In the following chapter two the used terms will first be introduced and definitions will be presented. Then the relevant theories will be presented referring to the issues KM, motivation and commitment in chapter three. Also there will be discussed theoretical aspects why the issues motivation and commitment plays a great role in KM, especially in SMEs. Deriving from the presented theories practical aspects of the implementation of KM in SMEs will be offered in chapter four. At last the issues will be summarized as well as a conclusion and an outlook will be made.

2. Terms and definitions

2.1. Small and medium-sized enterprises (SMEs)

A practical definition gives the EU: “The size group of smallest companies and small and medium-sized enterprises (SMEs) are formed by companies, which have less than 250 employees or either have sales revenues of 50 Mio. € maximum per year and/ or a balance sheet total of 43. Mio. € maximum”.^[8]

The institute of small and medium-sized businesses in Bonn defines companies with less than 9 employees or less than 1 Mio. € sales revenues as small and companies that have between a range of 10 to 499 employees or with sales revenues between one Mio. € to 50 Mio. € as middle-sized companies. The whole SME-sector is formed by com­panies with less than 500 employees or 50 Mio. € sales revenues.^[9]

2.2. Knowledge and Knowledge Management (KM)

Knowledge has to do with data and information but cannot be considered equal to it. It is surely something that makes data and information manageable. Knowledge can pri­marily be described as a combination of capacities, attitudes and information. It is a result of multitude factors: Experience, skills, culture, character, personality, feeling etc.^[10] In companies knowledge includes e.g. patents, processes, technologies, competen­cies and skills of the employees, information about markets, customers and suppliers etc.^[11]

KM can be defined as ‘‘an emerging set of organisational design and operational prin­ciples, processes, organisational structures, applications and technologies that helps knowledge workers dramatically leverage their creativity and ability to deliver business value’’.^[12]

Another good definition of KM could be: “Knowledge management is the process of critically managing knowledge to meet existing needs, to identify and exploit existing and acquired knowledge assets and to develop new opportunities”.^[13] It is also a practi­cal approach that fits to the aim of this work.

2.3. Motivation

Motivation can be described as all processes, which initialises behaviour, keep them in progress, direct and stop them and thereby affects organic reactions.^[14]

The main components for motivation are:^[15]

- Needs or so called motives: That what animates us.
- Incentives: Circumstances, frames and inputs.
- Aims: Incentives are goal orientated.
- Behaviour or actions: Incentives address motives and initialise actions, which are orientated to a special goal.
- Feedback and adjustment: Not every action lead to the aimed goal. Success and discourages form experiences which helps to adjust the behaviour. This forms and changes the motives. Achievable and attractive aims are at least focussed.

3. Relevant theories

3.1. Theoretical approaches of Knowledge Management

3.1.1. Theory of Knowledge Management in general

The aim of a knowledge orientated management is to generate knowledge from infor­mation and to transform this knowledge to sustainable competitive advantages. This is best described as follows: “Research is the transformation of money into knowledge. Innovation is the transformation of knowledge into money”.^[16] The “knowledge ladder” illustrates this relation very good:

Figure 1: The knowledge ladder^[17]

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There are many concepts of knowledge management. Often mentioned are e.g. the con­cept of Probst et al. (“building blocks of KM”), the approach of Doz et al. (“Projection, Integration and Orchestration), the approach of Nonaka and Takeuchi (Organisational Knowledge Transformation), the “Munich model”, the APQC/ Andersen-framework and so on.^[18]

A good approach for KM in a company with bases in different countries is those of Doz et. al.. They suggest three elemental concepts, which they call “Projection”, “Integra­tion” and “Orchestration”.^[19] “Projection” explains the process of transferring knowl­edge from the home country to the foreign centres, but at the same time to consider the special circumstances and knowledge on the spot. “Integration” means the worldwide learning and using from external knowledge, whereby the centre has a coordination but not the leading role. The “Orchestration” describes the cooperation of the company units, the customers and other partners in the network without a moderating centre. But the latter requires the preconditions “sensors”, “attractors” and a system of a “efficient and effective knowledge exchange”.^[20] Especially this approach shows that the central elements of knowledge build-up and –transfer in the international context are company culture, incentive systems and information and communication.^[21]

The APQC/ Anderson-framework includes a concept of phases of KM with so called “Enablers” which stimulate the frame conditions. There are for example: Leadership, company culture, technology, information and communication technology and the measurement of the results of KM. The issue “culture” in this concept is referring to the questions, how a sharing of knowledge could be encouraged and simplified, how a cli­mate of openness and confidence could be generated and if the customer needs are re­flected. In sum the APQC/Andersen-framework can be seen as a good checklist for KM.^[22]

But in this assignment the approach of Beijerse is used, because it combines several views mentioned above^[23], it is of a conceptual nature and can also be best applied for SME.^[24] It is near the APQC/ Andersen-framework but is more transparent and easier to use. The model is illustrated as follows:

Figure 2: An integral knowledge management model^[25]

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Source: Beijerse (2002), p. 166.

To make the factor knowledge productive as the goal of the KM process, all organisa­tion means has to be used. In the operational centre stands the knowledge streams that forms a “knowledge cycle”: The knowledge evaluation gives a logical input for the identification of the available and the necessary knowledge and therefore at least for the knowledge gap that derives from this. With the following development, sharing and utilization of knowledge the process starts again and form at least a cycle.^[26]

[...]

^[1] Cf. Frank et al. (2002), p. 1 and North (2005), p. 148 et seq.

^[2] Cf. Döring-Katerkamp/ Trojan (2002), p. 147.

^[3] Cf. Beijerse (2000), p. 170 and McAdam/ Reid (2001), p. 231.

^[4] Cf. Söllner (2008), p.425, Zaunmüller (2005), p. 1, Beijerse (2000), p. 162.

^[5] Cf. Götz/ Schmid (2004), p. 9, Wong/ Aspinwall (2005), p. 64 and Schneider (1996), p. 13.

^[6] Cf. Söllner (2008), p. 427 and Chase (2007), p. 20.

^[7] Cf. Eden (2002), p. 41, Beijerse (2000), pp. 162 et seq., Weber et al. (2005), p. 37 and Ahlert et al. (2005), pp. 161 et seq.

^[8] Cf. EU-Commission (2006), p. 5.

^[9] Cf. www.ifm-bonn.de.

^[10] Cf. Beijerse (2000), p. 162.

^[11] Cf. North (2005), p. 2.

^[12] Cf. Wong/ Aspinwall (2005), p. 64.

^[13] Cf. McAdam/ Reid (2001) p. 231.

^[14] Cf. Bröckermann (2007), p. 377.

^[15] Cf. Bröckermann (2007), p. 378.

^[16] Cf. North (2005), p.31.

^[17] Cf. North (2005), p. 32 and Söllner (2008), p. 426.

^[18] Good overviews are presented e.g. by North and Söllner: Cf. (2005), pp. 174 et seq. and Söllner (2008), pp. 427 et seq.

^[19] Cf. North (2005), pp. 191 et seq and Söllner (2005), pp. 430 et seq.

^[20] Cf. Söllner (2005), pp. 431-434 and North (2005), pp. 191-196.

^[21] Cf. North (2005), p. 196.

^[22] Cf. North (2005), pp. 185-186.

^[23] Cf. Wijnhoven (2006), p. 5: The levels “Strategic”, “Tactical” and “Operational KM Management” are often used in this context.

^[24] Cf. Beijerse (2000), pp. 165 et seq.

^[25] Cf. Beijerse (2000), p. 178.

^[26] Cf. Beijerse (2000), p. 166.