Managing the External Knowledge Network

Having explored the dynamics of knowledge acquisition from external sources, I will now briefly look at the role knowledge management (KM) has in the broader, long-term process of building an external knowledge network. Once again, I want to underline that this presentation is only intended as a broad overview of the potential roles of KM, and will not go into any detail on specific topics such as customer or supplier relationship management.

In the previous subsection, the major potential external knowledge sources were identified as:

  • Customers
  • Suppliers
  • Competitors
  • Partners
  • Mergers & Acquisitions

Each of these categories offer a different set of potential knowledge, as well as different challenges in the acquisition process.

Without looking specifically at KM, the general steps for extending the external knowledge network are as follows:

  • Identification of potential partner/target: This would depend largely on the corporate strategic goals assessed against the perceived benefit of the potential partners.
  • Evaluation of potential partner/target: This process is particularly important for high investment ventures like mergers and acquisitions or joint ventures. The process would be driven by the estimated contribution of the target (this includes knowledge and core competencies but also potentially other assetts), the estimated cost of establishing the relationship, and the estimated cost of acquiring similar knowledge from other sources (including building it in-house). The word "estimated" plays a key role here, since the information required to make accurate decisions is often hard to come by.
  • Establishing the relationship/acquisition of target: The process of actually establishing cooperation/acquisition. For customer, supplier, or competitor relationships this may involve setting up procedures, rules, and intentions regarding the nature of the relationship and the things that will be reported or shared. For mergers and acquisitions it could take any number of forms and may include defining a new structure, integration into a common locale, merging corporate cultures/identities, and so on.
  • Knowledge transferal/integration: The actual processes that are put in place to gather and use the knowledge and know-how from the relationship/acquisition. These may involve reporting procedures, feedback mechanisms, common IT systems, common projects etc.

The role of KM in building the external knowledge network would thus be to:

  • Provide all the relevant information regarding internal knowledge assets: This includes identifying what the firm has, what it does not have, and the costs associated with building new knowledge.
  • Help in the evaluation process: help evaluate the potential value and difficulty to integrate of the knowledge that the firm expects to acquire.
  • Encourage knowledge sharing & integration: On the one hand it could involve working with top management so as to devise the best procedures and systems relating to knowledge transfer. On the other, it could involve introducing incentives, systems, managing organizational culture change, etc. that facilitate, support, and encourage knowledge sharing.
  • Gather, integrate, and share relevant external knowledge and information: Managing the knowledge transfer process so as to ensure that the knowledge is relevant and that it is available whenever and wherever necessary. Analyzation of data and information so as to provide the building blocks of new knowledge.

As one can see, KM plays a supporting role in all areas and is instrumental in the learning process. Its importance will be greater the more knowledge intensive the industry and nature of the relationship.

Due to the complexity of these topics and the vastly different managerial requirements, I will end this discussion with just these general considerations.


Alan Frost M.Sc., 2010

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