TYPES OF KNOWLEDGE BASED RESOURCES
There are three types of knowledge-based resources that can be used for knowledge transfer, thy are: human capital, relational capital and structural capital.
Human capital is defined as the individual knowledge stock of the employees of an organisation. Employees can contribute to the knowledge base of an organization by means of their skills, experience, attitude, absorptive capacity and even their emotional intelligence (Becker, 1964; Goleman, 1995, 1998a; Mayer and Salovey, 1997; Ordo ´ n ˜ ez de Pablos, 2004a, 2006).
In the same vein, relational capital encompasses present knowledge in organisational connections already developed with the environment. The base of relational capital is the knowledge that was accumulated by the different parties during exchanges with a third party. This knowledge is external to the firm as well as to the human capital existing within the company. Relational capital becomes more valuable as relations -with customers, suppliers, shareholders and so have a longer duration. As a result of its external nature it is the hardest type of knowledge to codify.
Structural capital represents the knowledge that remains in the firm when employees has left the organization. Therefore, the firm owns it. Structural capital is “where the value added by the non-linearities of the knowledge creation process is assumed to reside” (Boisot, 2002, p. 69). Inputs to this process are provided by human capital. On the other hand, structural capital encompasses all forms of knowledge deposit which is not supported by the human being such as organisational routines, strategies, process handbooks and databases, and many more (Walsh and Ungson, 1991; Weick, 1979). Structural capital can be subdivided into technological and organizational capital. Technological capital includes all technical and industrial knowledge, like results from research and development and from process engineering. Youndt et al. (2004) define organisational capital as the institutionalised knowledge and codified experiences residing within an organisation. This include an organisation’s reliance on manuals and databases to preserve knowledge, along with the establishment of structures, processes, and routines that encourage repeated use of this knowledge.
This research work is to clarify the processes through which people create and use knowledge in an organization to achieve a desire goal. The particular subject area is a practically implemented ways to support, improve and stimulate the creation and use of knowledge that can enhance organization competences and bring strategic benefit to the Nestle international organization through the implementation of best practices and the adoption of a new system software package called SAP (system Application Programme) for it operations, here l have only chosen to elaborate on the an area of the organization operation, which is the material handling operation.
Information and communication technology are one set of the major forces that has moved knowledge management front and center. The new technology advancement have made it possible for people to share ernormous amount of information uncontrained by the boundary of location and time.this bring about are a lot of questions, ‘Is this the best way to do thing’ and ‘does this process really make the job easier’. The answer to these question are always in the positive, this is because most often than none, the introduction of new technology always change the way we create, transfer and use knowledge.
In implementing the best practice for the material handling operation in Nestle, the basic two major form of acquiring knowledge was used. These are the explicit and tacit knowledge.
The explicit knowledge is knowledge that an individual is to express fairly using language or other form of communication visual, sound and movement. According to the knowledge management fieldbook, explicit knowledge is treated as equivalent to information. The information required to shift from the way of doing thing to the best practice way of doing thing sometimes need to be passed or adopted through the medium of communication to the staff that will be involved in such transaction.
Tacit knowledge is knowledge that an individualis unable to articulate and thereby convert into information. It is more useful for an organization when it is transferred from one person to the other. Hence, there is need for experience hereby when the shift from the legacy way of doing thing in the material handling operation to the best practices. Tranfer of transit knowledge must be first converted into explicit knowledge before sharing it.Getting expert orpeople with experience to articulate their unknown knowledge requires skilled observation, facilitation and sometimes interviewing technique to codify the perceived knowledge in a form that others can consume.Nevertherless converting the unknown knowledge into information is the best way to transfer it. This something bring about concept such as ‘job description’ or ‘standar d operation procedure’., this concept help tacit knowledge to be converted into information for other dissemination.
These two form of knowledge can also be classified as known knowledge (explicit) and unknown knowledge (tacit).
On the whole, with such research as the implementation of best practices and adoption of SAP software, which is an information-technology based is mostly concerned with known knowledge. This is because the knowledge gap in turning the legacy into the new system format and subsequently need to be taught.
The learning organization strategy of Nestle was to re-engineer every business process to conform to the best practices and subsequently introduce a new Enterprise resourch planning software which is SAP for every aspect of the business operation.
A strategic business unit was created to undertake this knowledge management which is called the Globe center (Global business excellence). Their mission is to effectively and efficiently implement the the core best practices guiding every operation in the Nestle world and gather real time data for the system go-live of the new software system. To accomplish this task, the Globe center is responsible for providing adequate resources to every business unit to formulate best practices and document them (explicit knowledge) to crytallised into anew business solution and strategy.
The key strategy for the development of this knowledge is to make every business unit within nestle conform to the following;
- Process – Activities / Ways of Working
- Process – Policies and Procedures
- Process – Accuracy
- Process -Timeliness / Frequency / Cycle Time
- Process – Manage Risk
- People – Roles and Responsibilities
- People – Skills
- Organization – Ownership & Accountability
- Technology – Automation
These strategies are also supported by Nestle organization structure.
The purpose of this learning organization initiative is to provide a context for the practice of knowledge management and a perspective for the role of intellectual capital assets within an organization. The success of every knowledge management initiative is having simple models, based on coherent, common sense values in an increment and evolutionary environment.
I will like to analysis the component of the principle to be used to achieve the task ahead of Nestle in achieving the implementation of best practices and the adoption of the SAP software. These components can be illustrated in the diagram below as stated in the strategies
- People
- Process
- Technology