Tasks Completed in 2017 and Research Results

As a result of INNOVARRA project, a number of new research results were obtained, most of which were published and presented for discussion at both international scientific conferences and events for business practitioners.

 

 

 

Track A. "Effect of KM practices on business results"

 

Within this research track the authors analyzed the relationship between three elements of Intellectual Capital (human, organizational and structural) and companies’ organizational performance indicators. We applied quantitative and qualitative methods of analysis for conducting our research. The data was obtained with the help of: 1) a survey of 240 top-managers of Russian manufacturing companies; 2) analyzing of 154 publicly traded companies on NASDAQ 3) a survey of the representatives of Block of Refining, Petrochemistry, Gas Processing of the PJSC «LUKOIL» concerning intellectual capital management system implementation in the company (case method).

 

The results allowed us to make the following conclusions:

  1. Subjective assessment of the elements of intellectual capital obtained with the help of a survey of top-managers has a weak correlation with proxy-variables of elements of intellectual capital that are obtained from real financial statements of Russian manufacturing companies. At the same time subjective assessment of the elements of intellectual capital is related to return on sales (ROS) and return on assets (ROA) of Russian manufacturing companies within the current and the following year.
  2. Structural capital has the highest correlation with the organizational performance indicators of Russian manufacturing companies. It means that the application of managerial actions and knowledge management practices that enhance structural capital in manufacturing companies will have the highest influence on performance indicators.
  3. Knowledge management practices play an important role in intellectual capital elements enhancement that leads to the increase in companies’ financial performance indicators. At the same time we found out that ICT knowledge management practices play the most important role as it leads to enhancement of all three elements of IC – human, relational and structural. This relationship is empirically tested based on a sample of 240 Russian manufacturing companies. The analysis of the case of Block of Refining, Petrochemistry, Gas Processing of the PJSC «LUKOIL» showed the important role of corporate procedures and intranet portal for IC elements enhancement (with a particular focus on structural capital) and increasing financial performance indicators.
  4. Disclosure of information about elements of intellectual capital in financial statements leads to increase in share prices after Initial Public Offering (IPO). Moreover the share prices of companies that disclose more information on IC elements are much higher than of other companies that brings us to the conclusion that effective management of IC elements that are disclosed for potential investors helps to enhance value creation in a company.

 

 

Track B. "Typology and generalized enterprise knowledge map"

 

As part of this track, research on the specifics of using KM tools and methods in several domains was done, as a result of which we revealed:

  1. the predominance of certain types and properties of knowledge in different fields. These knowledge types and properties determine the significance of certain KM tasks in different areas, for example, the identification of tacit knowledge or knowledge storage;
  2. differences in the factors of choosing KM tools - in their composition and priorities;
  3. in different domains there are existing means of working with information that are expanded / supplemented for the tasks of knowledge management;
  4. in different domains there are existing methods and tools that actually solve separate tasks of knowledge management, but they are not called knowledge management tools.

 

Practical recommendations on differentiation and features of application of KM methods and tools in different domains were developed:

  1. it is necessary to take into account knowledge types and properties critical for the domain under consideration when developing recommendations for the selection and use of KM methods and tools. To identify critical types and properties of knowledge, knowledge audit and knowledge map development can be used;
  2. if there are existing means of working with information in the domain, consider an opportunity to expand their functionality to solve KM tasks;
  3. if there are tools in the domain that are traditionally not linked to KM, but which solve or are able to solve the tasks of KM, an opportunity of using them more actively and / or expanding them should be considered;
  4. when choosing methods and tools, it is useful to start the analysis with the required KM services (or functions), and then to look for options for their implementation, which can be either with the help of universal KM tools or domain-specific ones. KM tools should also be considered in terms of the services (functions) they provide;
  5. creation of a knowledge management system expects integration of universal and domain-specific KM tools. Integration should take into account all KM components:

- processes – coordinate the creation, use and support of universal KM tools with the involvement of processes for specialized tools;
- information / content – agree on the structures of documents and electronic forms for universal and specialized tools to prevent duplication of information;
- people – coordinate training programs and trainings, motivation systems, etc. for universal and domain-specific tools;
- technologies – coordinate the functionality and work out the ways of integration for universal and domain-specific tools.

 

 

Track C. "Working with knowledge on products/services and customers, customer orientation"

 

The research objective was to systematize and integrate the approaches used to manage outbound and inbound knowledge flows circulating between the firm and its customers. The delineation of two knowledge flows is relevant from the practical standpoint, as it eases the application of knowledge management concepts to the context of firm-customer interactions. Outbound and inbound knowledge flows were identified on the basis of the analysis of existing academic literature:

  1. outbound knowledge flow includes knowledge transferred from the firm to the customers;
  2. inbound knowledge flow includes knowledge transferred from the customers to the firm.

 

Within each domain, we identified key types of knowledge that moves along the relevant knowledge flow, their managerial implications, and key problems emerging in the management practice.

 

Within the domain of outbound knowledge management, the problem of knowledge distortion is considered. This is a situation when the information transmitted by the firm is distorted in the mind of the customer, so that the firm does not achieve the desired knowledge management goals. We classified key factors that define consumers' perception of marketing information, and managerial consequences of information distortion.

 

Within the domain of inbound knowledge management, he problem of “declared customer orientation” is considered. This is a situation when the firm declares its focus on obtaining and using the customers' knowledge, but does not actually meet this promise due to the underestimation of its knowledge management capabilities.

 

Based on the results of the study, customer-orientation is considered as a key factor that determines the modality of knowledge management practices and their integration into specific managerial processes, for example, the processes of creating and launching a new product on the market. The analysis of Russian companies requires taking into account the peculiarities of emerging markets characterized by the insufficient maturity of management technologies (which is one of the factors that reduces the competitiveness of the Russian economy) and insufficient maturity of consumptions practices reflected in the inhomogeneous level of consumer knowledge, marketing skepticism, marketing literacy and marketplace involvement.

 

Among the major results of the project are several contributions to the customer-orientation literature. Firstly, the methodology of customer-orientation measurement is significantly modified. Secondly, we proposed an integrated model of customer-orientation in the context of innovation process, which was tested on a sample of innovatively active companies.

 

 

Track D. "Working with knowledge in operations management"

 

There was developed a profile model of production networks that focuses on the automation of interactions among participants that use the methodology of context-oriented knowledge management for decision support. The model supports opportunity for the uniform presentation of information about participants, their competences, constraints, preferences and performance, as well as increases a relevance of information provided to task.

 

A scenario model of context-oriented knowledge management for decision support by production networks participants was proposed. The model describes a basis scenario of decision support based on using knowledge and context-related information about production network, as well as preferences of users, which are representing the interest of participants. The model presents an efficient use of participant resources.

 

Recommendations for functional structure of context-oriented knowledge management system for decision support by production networks participants and activity flow leading to accumulate into the system the network declarative and procedural knowledge by a network expert group were formulated.

 

 

Track E. "Working with knowledge in strategic management and organizational development"

 

An integrated approach to capability-based planning using visual modeling and analysis tools is one of the results of the track. The proposed approach describes the tasks, the tools used to implement them, and the scenarios (processes) that combine several tasks and tools in response to typical business situations. Strategic management and organizational development tasks related to the company's business capabilities: identification and description of the company's capabilities; analysis and evaluation of the company's capabilities; planning based on the capabilities of the company (intensification of use, development, acquisition, outsourcing of the company's capabilities). As part of the approach, related tasks of strategic management and organizational development are identified, they create the basis for capability-based planning and / or use its results. Identified capability-based planning tools and techniques have been systematized in two categories:

  1. to work with the company's capability set (macrolevel);
  2. to work with an individual capability (microlevel).

 

Among the presented tools and techniques, visual ones predominate, which corresponds to the peculiarities of the chosen knowledge domain. Examples of capability-based planning scenarios (processes) are "Design of a comprehensive program for the development of the company", "Planning to achieve a certain goal (or group of them) by developing capabilities", etc. To coordinate and successfully integrate the proposed tasks, tools and scenarios (processes) of capability-based planning an ontology (conceptual model) of the subject domain was developed. The above-mentioned planning tools from the point of view of working with knowledge are domain-specific adaptation of universal tools of knowledge structuring.

 

The table-graphical method of strategic alignment of the organization was improved, allowing coordinating the goals and indicators of business processes, functional systems and projects of organizational development with strategic goals and indicators of the enterprise. In particular, the requirements to the method were refined, the ontology (conceptual model) built into it for the field of enterprise performance management was developed, and the method of cascading goals and indicators was coordinated with ontology. In addition, a demonstration of the method on the case of a medium-sized company was performed.

 

The application of enterprise architecture management methods was elaborated and two options for their involvement in strategic management tasks were identified, they were considered in more detail as part of the project: (1) enterprise architecture management interacts with the strategy, but does not "cover" the objects and information needs of strategic management; (2) strategic management is built on an architectural approach.

 

Summarizing the results of the work on this track, recommendations were developed. When solving problems of strategic management and organizational development, visual and tabular methods of knowledge structuring and representation are useful. These methods can be either universal (the semantics of the elements are not specified), or domain-specific. To integrate strategic and operational management, it is recommended to use visual capability-based planning methods, as well as table-graphical method of strategic alignment proposed as part of the project. In the case of ad hoc application of domain-specific methods for their correct choice, it is expedient to use the classifications considered and developed as part of the project. Systemic and large-scale use of visual and tabular methods will require advanced technologies for the integration of various methods and their consistent use. In such a case, enterprise architecture management (domain-specific) methods and tools can be used to work with knowledge about the company's structure, operations and objectives for strategic management and organizational development.