Problems with Ignoring Knowledge Management

Denning (1999) has pointed out that clients today desire global knowledge. They want the best expertise they can get from the whole world. If a transnational organization cannot offer world-class service to its clients, it will lose those clients to an organization that can.

Transnational corporations that do not have the capability to engage in global knowledge management are taking a great risk. They are running the risk of losing out to their competitors. Consider the case of Japan's Ministry of International Trade and Industry (MITI). This ministry still uses typewriters and rotary dial telephone systems, and does not have modern knowledge and communication systems like computers and nifty software. By contrast, many of the civil service organs of other countries, especially those that lead the world in economic growth, have become users of expert and knowledge systems. Japan is beginning to lose its former place of pride among world economic powers. Time Magazine (2001c) quotes Ryozo Hayashi, a vice-minister in Japan's cabinet at that time, as saying, 'It's been a long time since Japan was seen as a rising sun.'

Colin Coulson-Thomas (1998) notes that global companies that ignored proper knowledge management have experienced problems. For example:

1. Cost cutting and streamlining have led to knowledge bases becoming eroded.

2. Redundancies have resulted in the loss of implicit knowledge that the redundant managers have taken with them.

3. Re-engineering has often caused experts with specialized knowledge to be replaced by generalists who then lack the necessary skills to perform tasks.

4. Outsourcing has resulted in outsiders being provided with capabilities that should have been retained within the corporation to aid its future development.

5. Dependence on high fliers has led to the perpetuation of a class of people who engage in first-class superficial work, but lack the depth for engaging with fundamental issues. Such employees are multi-skilled and cannot be pigeonholed.

Many global corporations fail to take cognizance of knowledge management in a holistic sense. These corporations often concentrate on knowledge bases that yield 'hard' data relating to financial figures. They neglect such issues as the satisfaction levels of managers or their motivational levels. They also overlook the need to keep records of why they have succeeded or failed in particular ventures.

It is desirable for global corporations to record the talents, skills and expertise of their key managers, so that at any point in time, the corporation is able to access the complete range of individual expertise that it possesses. Managers should know where to turn to within their own corporation for specialized knowledge. With modern technology it is not difficult for global corporations to maintain the necessary knowledge databases.