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The Role of Culture in Knowledge Management

International Journal of e-Collaboration, 2(1), 17-40, January-March 2006 17. The Role of Culture in Knowledge Management : A Case Study of Two Global Firms Dorothy Leidner, Baylor University, USA. Maryam Alavi, Emory University, USA. Timothy Kayworth, Baylor University, USA. ABSTRACT. Knowledge Management (KM) approaches have been broadly considered to entail either a focus on organizing communities or a focus on the process of Knowledge creation, sharing, and distribution. While these two approaches are not mutually exclusive and organizations may adopt aspects of both, the two approaches entail different challenges.

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1 International Journal of e-Collaboration, 2(1), 17-40, January-March 2006 17. The Role of Culture in Knowledge Management : A Case Study of Two Global Firms Dorothy Leidner, Baylor University, USA. Maryam Alavi, Emory University, USA. Timothy Kayworth, Baylor University, USA. ABSTRACT. Knowledge Management (KM) approaches have been broadly considered to entail either a focus on organizing communities or a focus on the process of Knowledge creation, sharing, and distribution. While these two approaches are not mutually exclusive and organizations may adopt aspects of both, the two approaches entail different challenges.

2 Some organizational cultures might be more receptive to the community approach, whereas others may be more receptive to the process approach. Although Culture has been cited widely as a challenge in Knowledge Management initiatives, and although many studies have considered the implications of organizational Culture on Knowledge sharing, few empirical studies address the influence of Culture on the approach taken to Knowledge Management . Using a case study approach to compare and contrast the cultures and Knowledge Management approaches of two organizations, the study suggests ways in which organizational Culture influences Knowledge Management initiatives as well as the evolution of Knowledge Management in organizations.

3 Whereas in one organization, the KM effort became little more than an information repository, in the second organization, the KM effort evolved into a highly collaborative system fostering the formation of electronic communities. Keywords: Knowledge exchange; Knowledge Management ; Knowledge sharing;. organizational Culture ; organizational Knowledge INTRODUCTION sult, to have limited impact (DeLong &. Knowledge Management (KM) ef- Fahey, 2000; O'Dell & Grayson, 1998). forts often are seen to encounter difficul- An Ernst and Young study identified cul- ties from corporate Culture and, as a re- ture as the biggest impediment to knowl- Copyright 2006, Idea Group Inc.

4 Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. 18 International Journal of e-Collaboration, 2(1), 17-40, January-March 2006. edge transfer, citing the inability to change that more supportive, encouraging orga- people's behaviors as the biggest hindrance nizational cultures positively influence KM. to managing Knowledge (Watson, 1998). In infrastructure capability and resulting KM. another study of 453 firms, over half indi- practice. Finally, Jarvenpaa and Staples cated that organizational Culture was a ma- (2001) determined that organizational cul- jor barrier to success in their Knowledge tures rating high in solidarity (tendency to Management initiatives (Ruggles, 1998).)

5 The pursue shared objectives) will result in a importance of Culture is also evident from perception of Knowledge as being owned consulting firms such as KPMG who report by the organization, which, in turn, leads that a major aspect of Knowledge manage- to greater levels of Knowledge sharing. ment initiatives involves working to shape While studies have shown that cul- organizational cultures that hinder their ture influences Knowledge Management Knowledge Management programs (KPMG, and, in particular, Knowledge sharing, there 1998). These findings and others (Hasan & is little research on the broader aspects of Gould, 2001; Schultze & Boland, 2000) the nature and means through which orga- help to demonstrate the profound impact that nizational Culture influences the overall ap- Culture may have on Knowledge manage- proach taken to Knowledge Management ment practice and of the crucial role of se- in a firm.

6 The purpose of this research is to nior Management in fostering cultures con- examine how organizational Culture influ- ducive to these practices (Brown & Duguid, ences Knowledge Management initiatives. 2000; Davenport, DeLong, & Beers, 1998; We use a case study methodology to help DeLong & Fahey, 2000; Gupta & ascertain the relationship of the organiza- Govindarajan, 2000; Hargadon, 1998; tional Culture to the Knowledge manage- KPMG, 1998; von Krogh, 1998). ment approaches within two companies. Studies on the role of Culture in The following section discusses Knowledge Knowledge Management have focused on Management approaches and organizational such issues as the effect of organizational Culture .

7 The third presents the methodol- Culture on Knowledge sharing behaviors ogy. The fourth section presents the two (DeLong & Fahey, 2000; Jarvenpaa & cases and the fifth, and discusses the case Staples, 2001) and the influence of cul- findings, implications, and conclusion. ture on the capabilities provided by KM. (Gold, Malhotra & Segars, 2001) as well LITERATURE REVIEW: as on the success of the KM initiative Knowledge Management . (Baltahazard & Cooke, 2003). More spe- APPROACHES AND. cifically, Baltahazard and Cooke (2003) ORGANIZATIONAL Culture . ascertained that constructive cultures (em- phasizing values related to encouragement, Knowledge Management affiliation, achievement, and self-actualiza- Approaches tion) tended to achieve greater KM suc- Knowledge can be defined as a form cess.

8 Similarly, Gold, et al. (2001) found of high value information (either explicit Copyright 2006, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. International Journal of e-Collaboration, 2(1), 17-40, January-March 2006 19. or tacit) combined with experience, con- proach are that it fails to capture much of text, interpretation, and reflection that is the tacit Knowledge embedded in firms and ready to apply to decisions and actions that it forces individuals into fixed patterns (Davenport et al.)

9 , 1998). While all firms of thinking (Brown & Duguid, 2000;. may have a given pool of Knowledge re- DeLong & Fahey, 2000; Hargadon, 1998;. sources distributed throughout their re- von Grogh, 2000). spective organization, they may be un- In contrast, the practice approach to aware of the existence of these resources Knowledge Management assumes that a as well as how to effectively leverage them great deal of organizational Knowledge is for competitive advantage. Therefore, tacit in nature and that formal controls, pro- firms must engage in activities that seek to cesses, and technologies are not suitable build, sustain, and leverage these intellec- for transmitting this type of understand- tual resources.

10 These types of activities, ing. Rather than building formal systems generally characterized as Knowledge to manage Knowledge , the focus of this Management , can be defined as the con- approach is to build social environments scious practice or process of systemati- or communities of practice necessary to cally identifying, capturing, and leveraging facilitate the sharing of tacit understanding Knowledge resources to help firms to com- (Brown & Duguid, 2000; DeLong &. pete more effectively (Hansen, Nohria, & Fahey, 2000; Gupta & Govindarajan, Tierney, 1999; O'Dell & Grayson, 1998).)


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