Pre-publication version, as submitted to journal for peer review (This is 99% identical to the published version which appeared

as Quintas P, Lefrere P & Jones G (1997), "Knowledge Management: a strategic agenda", Long Range Planning, 30(3), 385-391)

Knowledge Management: a Strategic Agenda Paul Quintas, Paul Lefrere and Geoff Jones Abstract
Knowledge can be seen as a key source of advantage. Its importance has been recognized for a long time. Some scholars have realized that information can create wealth. What is happening today is that there has been a qualitative change in the way in which vast amounts of data can be collected and communicated. The risk is of information overload. To help avoid this, a discipline is needed which can distinguish between data and knowledge, can find ways to reduce the overload and can organize itself. At present, little consideration is given to whether and how individuals and organizations can manage knowledge. Knowledge management is a process of continually managing knowledge of all kinds and requires a companywide strategy which comprises policy, implementation, monitoring and evaluation. Such a policy should ensure that knowledge is available when and where needed and can be acquired from external as well an internal sources. Activities such as these have management implications at all organizational levels and functions ; thus culture, people, process and technology have all to be considered. In this, the fact that much information that is used is not in computers but in heads needs to be recognized. Indeed, companies are now aware that traditional database structures can hold only a fraction of what is available. This in turn leads to increased emphasis on information and communication technologies (ICTs) and the need to realize that to be accessible information has to be organised in the same way as (or compatibly with) the human brain. This is very important in the case of collecting tacit knowledge. In addition, organizations have to solve the boundary paradox, in other words, they must be open to receive information on both an informal and formal basis from the outside. It is difficult, of course, to find solutions and processes which are completely outside individual experience. To be successful, it is necessary to recognize that knowledge as we present it here is a process or set of relationships. Knowledge can be seen as a product of power relations. Knowledge management comprises information, communication, human resources, intellectual capital, brands etc. It involves facing a number of challenges such as its usefulness, its transfer to others and its quantity. It is necessary to develop an organizational capability which may be costly. It does not mean managing all that is known. It does mean formulating and implementing strategies, improving business processes and monitoring and evaluating what knowledge exists, and its effective management. It is important yet difficult to scope, define and understand the processes, but to do so is necessary if organizations are going to be able to cope.

Knowledge Management: a Strategic Agenda Paul Quintas, Paul Lefrere and Geoff Jones
The role of knowledge as the key source of potential advantage for organizations and indeed whole economies has become hotly debated. Peter Drucker recently wrote that knowledge is the only meaningful economic resource. [l] It follows that for organizations, individuals and society, the processes by which knowledge is created or acquired, communicated, applied and utilized must be effectively managed. The idea that knowledge may be managed is clearly fundamental to the related notions of the learning organization, the knowledge-based business, the management of intangible assets and of intellectual capital. Current interest in these overlapping concepts may well reflect important phenomena with which organizations have to cope, such as perceptions of increased rates of change, competition and market turbulence. People are looking for new ways to compete effectively. One important process is to recognize or rediscover assets you already have but are not using to their full potential. Notably, these are employees and information, but may also include patents, copyright, brands, R&D, licensing opportunities, innovative use of assets such as databases, and so on. These provide opportunities to innovate, to cut costs, to save design time, reduce time-to-market, etc. However, those wary of yet another management fad are also justified in posing two key questions: is the trend towards knowledge management adequately defined and identified, and is what is perceived to be happening genuinely new and different? A further question is whether anything meaningful can be said in order to guide the knowledge management process - is knowledge manageable in terms of management as a process with which we are familiar, or is knowledge management an oxymoron? Might knowledge management better be seen as a component of all forms of human and organizational activity, rather than a subject of concern in its own right? More fundamentally, is the underlying premise, as suggested by Druckers quote, that knowledge may be seen as a resource that, like land, oil or iron ore has independent existence outside human and social systems, not open to question? This article is part of our exploration of what knowledge management is and what relevance it has to organizations and the people who work in or with them. The authors are members of an Open University Business School team developing a new course - Managing Knowledge - for our Masters in Business Administration (MBA) programme. (The OUBS has pioneered distance learning for management education, and currently has over 20,000 managers studying across Europe. We have 3472 MBA graduates, and around 5500 current MBA students.) Our discussions are starting to frame our approach which will lead to the development of teaching materials that will be subject to extensive internal and external testing, criticism and review before any students embark on the course. The present article is a reflection of the early stages of this process, in a subject area which, more than most others, presents significant challenges of purpose, scope, definition and pedagogy. Ultimately, our objective for the course is to provide our students, the vast majority of whom are practicing managers, with both a critical awareness and practical insights into the processes of knowledge management. More modestly, this article is intended to be one step in helping define the field and to identify some of the key issues and debates that must be addressed by all those with an interest in intellectual capital and knowledge management.

Information and Knowledge Economies

The importance of knowledge for securing economic and social benefits would hardly be news to the ancient Egyptians or Greeks, and the practical application of knowledge to solve human problems was fundamental to Francis Bacons writings in the early seventeenth century. The wealth-creating function of intellectual capital was not lost on the early proponents of economic efficiency:
The Intellectual and Moral Capital of Great Britain far exceeds all the Material Capital, not only in importance, but in productiveness. [2]

Subsequent generations of scholars have emphasized the importance of information, many writers over the last three decades (for example, Daniel Bell, Michel Porat, Alvin Toffler, Tom Stonier) arriving at the conclusion that information, as well as the traditional factors of land, labour and capital, also creates wealth. Bell wrote in 1974 of information being the axial principle of a post industrial society in which the majority of employment is for information workers rather than for those engaged in manual tasks. [3] Concepts such as the information economy and even the information age are underpinned by the suggestion not so much that previous societies brought no information to bear on their endeavours, but rather that there has been a qualitative change brought about by the ability to produce, reproduce and communicate vast amounts of data and information electronically (we shall return to the issue of information technology below). The first question in relation to such claims focuses on whether more information is necessarily better. Unlike material commodities, in the economics of information, more must mean different or it is worthless. The second related question is whether any given organization can access, understand and utilize appropriate information within a relevant context and timeframe, and at what cost. Information is not a free good since its assimilation and utilization requires an appropriate level of understanding. Information is only of value within a context where other forms of knowledge are brought to bear. Indeed, for a number of reasons it may have negative attributes. There is much current concern with information overload -

that is, too much information swamping the individual or the organizations ability to assimilate and use it. The following quote from Herbert Simon illustrates this and raises a further point:
In a world where attention is a major scarce resource, information may be an expensive luxury, for it may turn our attention from what is important to what is unimportant. [4], p. 13

The additional point is that what is important is a matter of judgement and depends on other forms of knowledge being brought to bear. The claim, therefore, for the emerging inter-discipline of knowledge management, is that knowledge must be the focus for analysis, and that organizations must find ways in which to manage the processes by which knowledge is created and applied. Charles Handy has recently claimed that the future lies in a three-i economy, with organizations adding value through the application of information, ideas and intelligence. [5] These might well be seen as key elements within knowledge management processes, but the word application perhaps disguises the complexity of these processes.

Knowledge Management - Definitions and Scope

What is the current scope of activity relating to knowledge management? A search in January 1997 of over 100 web sites which touch on some aspect of knowledge management revealed a heterogeneous range of interests, perspectives and issues, including: 1. Economics and organizational knowledge capital. This includes the issue of whether information is data or knowledge, and questions of information and knowledge value in particular contexts, including considerations of intellectual property rights (IPR). See Reference [6]; the authors, Manville and Foote, lay out an information value checklist and outline a mathematical model for assessing the value of particular information. 2. Engineering approaches, including ways to reduce information overload in decision support systems and environmental scanning, ways to re-use information, as in configuration management systems to support the reuse of engineering and manufacturing knowledge in routine design, and configurable production systems achieving dynamic and flexible product-specific manufacturing systems. 3. Other aspects of computing and knowledge media. 4. Organizational studies, informed by anthropology, evolutionary biology, sociology, etc. 5. Epistemology, learning, cognitive psychology and situated cognition (SC) theory (which concerns
the structures of the world and how they constrain and guide human behavior; SC takes the view that human knowledge and interaction cannot be divorced from the world).

6. Other aspects of definition and classification, informed by artificial intelligence, information science, linguistics, philosophy, etc. 7. Human resource sites, which mention relatively recent job categories such as Chief Knowledge Officers, Intellectual Capital Directors and Intellectual Capital Controllers, as well as more traditional knowledge management job titles such as Information Officers, R & D Librarians and Corporate Archivists. What is perhaps surprising is the lack of convincing examples of Handy's "three-i" organizations, creating value from intangible assets, or adding value, for example by effective brands management. Moreover, the benefits of knowledge management are often presented solely at the level of the organization or the decision-maker, rather than at the level of individuals in an organization, or other stakeholders. There appears to be very little consideration of how individuals might become better able to manage their own knowledge and that of their organization. Other underpinning disciplines and themes that emerge from the literature include: organizational memory, knowledge representation and communication, ethics, explicit and tacit knowledge, and organizational learning. Clearly the scope of knowledge management is wide, reflecting this heterogeneity. Inevitably, definitions depend to a large extent on the purposes for which they are intended. Our interest is in a definition that will provide heuristics for management practice and education. We regard knowledge management as a process, distinguishing KM from the focus on resources and assets, which is fundamental to many interpretations of intellectual capital, thus:
Knowledge management is the process of continually managing knowledge of all kinds to meet existing and emerging needs, to identify and exploit existing and acquired knowledge assets and to develop new opportunities.

Such a perspective allows us to explore useful distinctions between different kinds of knowledge, and sets the agenda for the development of action- oriented goals for managers and organizations, such as: to formulate an organization-wide strategic policy for developing, acquiring and applying knowledge;

to implement knowledge strategies with the help of all relevant parties within an organization (or a network of organizations); the daily improvement of the business processes in an organization, with a focus on knowledge development and use; to monitor and evaluate the achievements of knowledge assets, and to monitor and evaluate management activities in terms of knowledge.

The kinds of activities that might be associated with such goals include: the disclosure of knowledge (e.g., lessons learned, best practices) so that all members of an organization can use that knowledge in the context of their organizational roles; ensuring that knowledge is available at the precise location where it is most crucial for decision making; ensuring that knowledge is available when it is needed for a business process; facilitating the effective and efficient development of new knowledge (e.g. R & D activities, learning on the basis of historical cases); supporting the acquisition of knowledge from external sources, and developing the capability to assimilate and utilize that knowledge; to ensure that new knowledge is distributed to those people in the organization who perform activities on the basis of the new knowledge (e.g., distribution of lessons learned); to ensure that everybody in the organization 'knows' where knowledge is available within the organization or network of organizations.

These activities have management implications at all organizational levels and functions. This suggests that knowledge management programmes must have coherence across a number of dimensions, including organizational structure and culture, people aspects, processes and technology: organizational structure and culture: including the development of structures that facilitate the growth of communities of practice (groups of professionals informally bound to each other through exposure to a common class of problems, with common pursuit of solutions, who thereby themselves embody a store of knowledge); people aspects: training, development, recruitment, motivation, retention, organization, job design, cultural change and the encouragement of thinking, participation and creativity, and the management of all types of employment contracts; process aspects: process innovation, re-engineering; both for radical and continuous improvement; technology aspects: concept maps, hypermedia and object-oriented databases, artificial intelligence approaches to knowledge acquisition, representation and discovery, decision support, data mining and knowledge dissemination.

Technology, Information and Knowledge

Technology provides powerful metaphors for human and organizational processes - the heart as a pump, the individual as an information processor, the organization as a machine, and so on. The mechanistic view of human physiology has partially been replaced with a more holistic conceptualization, and the mechanistic model of organizations has been similarly augmented with organic models. The use of computers has over the last 40 years led to the dominance of a database-centred view of organizational information resources and processes. It is this model which appears in many conceptualizations of knowledge management. As with the transfer of many models and metaphors between contexts, it may be misleading. In fact, the database model may not even have been very helpful in the context of organizational information processes. Thomas Davenport, director of research at Ernst and Young's Centre for Information Technology and Strategy in Boston, argues that the majority of information that managers draw upon is not embedded in computer systems-rather, it is principally in the heads of the staff, or communicated to them through a number of channels:
" ... evidence from research conducted since the mid-1960s shows that most managers don't rely on computer-based information to make decisions. The results of these studies are remarkably consistent: managers get two-thirds of their information from face-toface or telephone conversations; they acquire the remaining third from documents, most of which come from outside the organization and aren't on the computer system." [7], p. 121

There is g r o w i n g awareness that, for the majority of organizations, traditional database structures an d IT approaches can capture or represent only a fraction of their knowledge and intellectual capital. Of course, this varies between sectors and organizational types - some forms of organization depend on large databases of tightly-structured information, but here the value added may still occur at a metalevel- having knowledge about which information sources are accurate, and what types of information, and patterns in the data, specific customers may wish to pay for, are examples of meta-knowledge that are unlikely to be held within an IT system. Knowledge adds value to data by providing selectivity and judgement. Here we start with conventional definitions of data, information and knowledge: information is organized facts and data, and "knowledge consists of truths and beliefs, perspectives and concepts, judgements and expectations, methodologies and know-how". [8] Although the 'data processing' view of computer systems and thereby the organizational processes which could be supported by them has been a powerful metaphor in the second half of the 20th century, organizations have never seriously been considered to be simply data processing machines. However, J.R. Galbraith suggested in 1977 that organizations might be considered to be informationprocessing systems, [9] and the contribution of IS (Information Systems) to organizational performance has been a matter of both blind acceptance by some and much controversy more generally. Clearly, even in the simplest organization there are flows of information from customers, users and suppliers, as well as to and from the government and regulatory bodies. This information must be managed by internal processes. The data and information processing that goes on inside the organization takes place in a context within which other organizational processes add intelligence, judgement and value to data and data processes. Often the ability of humans to override, ignore and circumvent the formalized organizational processes represented and atrophied in IS has enabled the organization to manage its knowledge base intelligently in spite of the IS system. Emphasis is now shifting away from the 'database-centred' view of IT towards the communication potential of new technologies-hence the phrase ICTs (information and communications technologies). ICTs are supporting the emergence of new organizational forms and working patterns that are in many ways transforming the ways in which organizations function, and especially the ways in which they interact and communicate. The metaphor of the computer as a filing cabinet, text processing or calculating tool is being replaced with the metaphor of computer as a communications device: a window, a channel, or perhaps a lens that may be focused, through which to access information. In addition to ICT metaphors, managers need to be aware of biological metaphors, particularly from neuroscience, in relation to organizational behaviour, organizational memory and knowledge management. Modern neuroscience is providing insights at many levels into how individuals perceive the world and process the information they receive through their senses. Indications are that the brain is far more 'distributed' than commonly imagined; all information processing, and all recall, involves the participation of ancient and relatively primitive parts of the brain. We cannot hope to improve our 'higher-level' conscious thinking unless we take into account how our actions are influenced by interactions between different parts of the brain; how we can enhance desirable interactions; and how we can reduce undesirable interactions. [10]. Managers can use neuroscience metaphors to provide insights into, for example, how to improve their organization's organizational memory, or how to improve interactions between different parts of their organization and hence how to improve its overall decisionmaking ability, as represented by its 'strategic IQ'. [11]

Managing Knowledge Between Organizations

Companies and governments face many opportunities and threats accompanying the rapidly growing use of information and communication technologies (ICTs): global markets and competition, new forms of organizational structure and inter-organizational dependency, and new interrelationships between producers and customers. Few corporations have the capability to go-it-alone and cover the waterfront of technologies required to innovate in the many product markets where technologies are fusing across disciplinary boundaries. [12] They therefore need to continuously acquire new knowledge from external sources to enable them to innovate effectively. Knowledge acquisition is an active process - it requires firms to commit resources to its management. For example, much R & D expenditure is devoted to tracking and assimilating knowledge from outside the firm boundary. [13-15] This is especially challenging in the case of tacit knowledge. [16] Whereas codifiable knowledge can be expressed and transferred in written and other recorded forms (designs, formulae, specifications etc.), tacit knowledge resides within people and may be embedded in organizational and social processes, building cumulatively within the organization. [17] Such 'difficult to unravel' knowledge is not easily transferred between organizations. [18] Tacit knowledge should not be seen as knowledge which is independent of explicit knowledge; there is a tacit dimension to all forms of knowledge and practice. [16]

In transferring knowledge across organizational boundaries, organizations must solve 'the boundary paradox' - their borders must be open to flows of information and knowledge from the networks and markets in which they operate (markets which increasingly blur traditional boundaries), on both formal and informal bases, whilst at the same time the organization must protect and nurture its own knowledge base and intellectual capital. It is upon the dynamic preservation of the latter that survival depends.

Problems and Challenges

'Knowledge Management' suffers from the same problem as many other management labels: it assumes that knowledge is a 'thing' (object) which is amenable to being 'managed' - by a 'subject' (a manager). The analogy is with 'managing culture'-seeing culture as an independent set of variables which become embodied in organizations and which can be manipulated (managed) by suitably sensitized people. Yet it is now widely accepted that culture is not an 'add-on' to organizations. Culture is what an organization is rather than what it has. Further, organizations are embedded in societies. The presumed separation between object and subject is not so easily constructed, especially at the organizational level (exactly what has knowledge about what?). There is clearly an issue here as to whether knowledge can be regarded implicitly as a more or less discrete resource or input in the same way as 'materials' can be. The organization as an information processor is a metaphor which fails if the divide between subject and object is problematized, cf Bateson [19]: "information consists of differences that make a difference". Another weakness of the information processor metaphor is that it takes as given the methods (and underlying knowledge base and assumptions) used to process information. This may be why some firms are blinkered and do not perceive threats from outside their traditional 'knowledge boundary' (e.g., knowledge from new or unfamiliar disciplines, or knowledge about unfamiliar ways of doing business). It is clearly difficult to think completely 'outside the box' - to find solutions that are not influenced by one's traditional knowledge boundary, or by the constraints and assumptions of one's organization and one's society. Ideally, the management of knowledge would be carried out by people with 'prepared minds', able to cope with rare yet valuable opportunities such as the discovery of the Penicillin mould (which perhaps had been seen a thousand times in labs, before Fleming noticed it as something unusual rather than annoying). Realistically, the management of knowledge typically involves many routine events, mixed with a tiny number of unusual events. Common events can be managed better by becoming aware of common practices (and pitfalls), and alternative approaches from other organizations and societies. In designing our course we consider two inter-linked processes: useful knowledge creation/recognition and knowledge utilization. We argue for knowledge to be seen not as a set of facts or even skills 'out there' which can be discovered, identified and utilized, but knowledge as a process, as a set of relationships in which power is heavily implicated. Not in the sense of 'knowledge is power', but in the proposition that power and knowledge are constituted together. In other words, knowledge is a product of power relations - what we regard as knowledge, the rules for its possibility - are themselves the outcome of power as well as conferring power on the formulators. So, to quote Nonaka and Takeuchi [20]: knowledge is "a dynamic human process of justifying personal belief toward the truth". This view also suggests that knowledge is contextdependent - "all knowledge is local knowledge". [21] This recognizes the reality of organizations: in general, managers need only be concerned with knowledge that impinges on their local knowledge and their local actions. The challenge for us is to provide them with tools and insights that help them to take into account changes beyond their organization, and interactions with other organizations, and make it possible for them to consider moral capital as well as intellectual capital.

Conclusions
This article has raised a number of questions about knowledge management. Is knowledge management a fundamental feature of organizational processes? Is it new and different, or is it just another management fad? Is not all management concerned with knowledge management? Conversely, is knowledge manageable in terms of the management processes with which we are familiar? Moreover, what kind of conceptualization of 'knowledge' do we have? How constrained is this conceptualization by our current mindsets and culture? Knowledge management requires a broad definition of knowledge-including information, communications, human resources, intellectual capital, brands, etc. The current growth of interest in knowledge management is drawing on a wide range of existing literatures, from post-industrial theory to organizational learning and knowledge engineering. We began by discussing the assertion that the management of knowledge, and its correlate intellectual capital, can be a key source of organizational advantage. There area a number of challenges that managers need to consider. A first issue is the context of that knowledge: its usefulness may be context-specific and its benefits difficult to transfer. Too much information may be a disadvantage. The acquisition and assimilation of information and knowledge requires the development of organizational capability, which is costly and uncertain in its benefits. Clearly knowledge management in an organizational context does not mean managing everything that is known (assuming it could be gathered together in some way). It is concerned with creating and mobilizing certain knowledge (some of which an organization may not even know it has) for certain purposes (such as competitive advantage or greater efficiency). A lot of knowledge is useless (or too costly) for individuals or their organizations. Lots of innovations depend on knowledge which has long been known but not applied to the current problem. Lots of what employees know (their tacit knowledge) reflects the past that we are trying to escape. So the issues of uncertainty and complexity have a particular importance here. How do we know we have useful knowledge? How do we know that our successes are due to its exploitation? These conceptual challenges do not mean that meaningful action cannot be taken. The brief review of the field presented here suggests an agenda for the development of action-oriented goals for managers, organizations and networks of organizations. The formulation and implementation of strategies for developing, acquiring and applying knowledge. The improvement of the business processes in the organization, with a focus on knowledge development and its use. The monitoring and evaluation of knowledge assets and their effective management. Our work to date highlights both the importance and difficulty of scoping and defining this emergent and disparate field, and of understanding the processes involved, so that appropriate learning programmes can be developed. These will be vital if organizations are to manage knowledge processes effectively in the future.

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