Knowledge acquisition refers to the knowledge that a firm can try to obtain from external sources. External knowledge sources are important and one should therefore take a holistic view of the value chain (Gamble & Blackwell 2001). Sources include suppliers, competitors, partners/alliances, customers, and external experts. Communities of practice can extend well outside the firm.
Knowledge acquisition is a topic that could fill books and extend well outside the knowledge management (KM) focus. For this reason, detailed descriptions of how to manage external relationships are beyond the scope of this topic. However, since KM is inextricably linked to corporate strategy, an overview of the options available to the organization will be helpful to understanding the full potential KM role.
This subsection will discuss the knowledge available from the different sources, and the managerial issues that must be considered. In the subsection titled "External Knowledge Network", I will tie this back to the overall strategic level and look at the process behind external knowledge acquisition.
The main sources are of knowledge acquisition are:
Customer knowledge comes in different forms. Gerbert et al (2002) identify three different types:
- Knowledge for customer: The knowledge that the customers can gain in order to satisfy their knowledge needs.. It can include product, market, and supplier knowledge. It can be sourced from our company or from other external sources like other customers and competitors (Zanjani 2008).
- Knowledge about customer: The kind of knowledge that enables us to know the customer better, to understand their motivations, and to address them better. Includes requirements, expectations, and purchasing activities.
- Knowledge from customer: The kind of knowledge that deals with products, suppliers, and markets. It can be used to improve our products and services.
These three categories apply to actual knowledge acquisition as well as to data and information, which can be processed and used to create knowledge (Zanjani 2008); e.g. data on purchasing habits could be analyzed to create knowledge that could improve marketing or design decisions.
Knowledge sharing is thus important, although it may take many different forms depending on the area of business. KM is particularly important for B2B relationships where the buyers are usually more prominent (i.e. either buy many products or buy expensive products) and the products are more likely to be customized to the needs of the customer. This can, and often should result in a closer relationship with more detailed communication and feedback, where the customers are involved as partners when discussing modifications and improvements (Gerbert et al 2002).
Some possible KM initiatives thus include:
- Collecting feedback
- Collecting and processing marketing related information
- Collecting suggestions
- Involvement in development/design
Effective acquisition of customer knowledge is dependent on customer relationship management. IT can be used in this context both as a means of collecting feedback and enhancing communication and cooperation between partners (the principles of knowledge sharing apply here within the confines of the specific relationship). It is also useful as a way to gather data and information regarding sales, trends, feedback, and so on, which can then be used to create new knowledge within the organization.
Chan (2009) presents a classification for supplier knowledge based on the concepts outlined by Gerbert et al (2002) regarding customer knowledge. These are:
- Knowledge for suppliers: This is the knowledge that suppliers require and includes "production needs and forecasts, inventory, products, customers, and markets" (Chan 2009).
- Knowledge about suppliers: This is knowledge that is used to understand how the supplier can match the requirements of the organization; provide insight regarding quality, delivery, defects, financial risks etc.
- Knowledge from suppliers: This refers to the knowledge that suppliers have gathered from their dealings with the organization.
The KM initiatives and the role of IT are similar to the ones presented in the customer segment, with the organization now taking on the role of customer. Knowledge acquisition in this case also includes data and information which can be processed and used as building blocks for new knowledge creation.
Gamble and Blackwell (2001) refer to compatible goals, cultural alignment, and leadership commitment amongst the key factors for sustained, productive, long-term relationships.
This deserves mention but it is a fairly straightforward aspect of KM. It simply involves collecting, organizing and presenting the data, information, and knowledge that the firm has acquired in such a way that one can search, retrieve, and analyze it. Some of this falls within the scope of information management, but it is particularly the process of using these components to create better decisions and new knowledge that is of interest here.
IT systems are very useful in this case, since the sources are largely explicit and presumably require frequent updating and manipulation. Data mining and analysis,
document management systems
with suitable search functions, and expert systems are most relevant here.
Alliances intended to increase knowledge are a valuable potential resource. However these must be properly managed. Key success factors include fostering trust, learning from your partner, and effectively managing the creation of knowledge relevant to both parties. Knowledge transfer can be facilitated by personnel exchanges, common projects and other forms of regular interaction, technology sharing, etc. (Gamble & Blackwell 2001). Focusing on informal communication, collaboration, and socialization is of paramount importance for valuable tacit knowledge acquisition and for extending communities of practice beyond the firm's borders.
Chan (2009) once again formulates a set of knowledge types based around the work of Gerbert et al (2002):
- Knowledge for partners: Knowledge which satisfies their needs, including "knowledge about products, markets, and suppliers" (Chan 2009).
- Knowledge about partners: Knowledge acquisition focused on understanding the ability of partners to perform their role in the relationship. Includes distribution channels, products, services, etc.
- Knowledge from partners: The knowledge that partners have accumulated from dealing with the organization.
IT can be used in this case very similarly to the way it is used inside the organization for knowledge sharing and knowledge creation (including data/information analysis) - in other words supporting communication, collaboration, experimentation, expertise location, analysis tools, etc. The exact system has to fit the nature of the relationship and the business model.
What is of particular importance in this case is to safeguard the system so that only that knowledge which the firm is willing to share becomes available. In the 80s, joint ventures between American and Japanese firms often resulted in a lopsided endeavor favoring the latter, since the Japanese were far more willing to listen and the Americans were far more willing to talk. It is important to remember that the goal here is two way learning; that a relationship will not last forever; and that a partner today may be a competitor tomorrow. KM must therefore be very aware of what knowledge is being shared, and the IT systems must reflect this policy.
Merges & Acquisitions
This aspect deserves mention, but as a general discipline it is well beyond the scope of this paper. Dealing with mergers and acquisitions (M&A) is an extremely complex task that has led to numerous failures. Within the scope of knowledge acquisition, the area related to KM is how to pass on the most amount of relevant knowledge from the previous two organizations to the new, combined firm.
Very broadly speaking there are a couple of roles where KM efforts should feature heavily once the target has been acquired:
To identify the valuable/redundant knowledge sources in the target organization: This is a very difficult process since it involves understanding of the target company's tacit and embedded knowledge locked within people, communities, processes, networks, procedures, etc. One of the major causes of failure in M&A is that during the restructuring process, key people are let go by mistake or key communities are disrupted. The old adage that the company should be seen more like a living organism than a machine holds very true here.
To combine this (relevant) knowledge with the organization's knowledge assets to achieve synergy: This is the essence of many M&A; the notion that the whole should be greater than the sum of its parts. Integrating acquired companies is a difficult task, heavy on people management and the creation of a common culture. It is hard to say how much of this falls within KM specifically, and there certainly are no universal rules on this topic. Fundamentally, the same principles on knowledge sharing, reuse, and creation apply here, with a particular focus on culture, networks, and incentives, within a different and potentially hostile environment.
This refers to the other sources of external knowledge available to a firm, and includes hiring new personel or acquiring the services of consultants.
The role of KM in these cases is to make sure that the right knowledge is acquired. Essentially the process has two parts, on the one hand the strategic and tactical requirements of the firm must be taken into account, and on the other these must be compared to the knowledge assets of the organization.
If external services are acquired from consultants or other temporary service providers, KM must work together with strategic management to determine if this knowledge is worth integrating into the firm by assessing the need to reuse it in the future vs the cost of transferring it into the organization. If it is deemed as something that should be integrated, then the right learning situations must be established to transfer the knowledge into the firm. These could be mentoring relationships, use of project teams that include organizational members, courses and education, etc.