Track A. "The effect of KM practices on business results"
The main task in frame of the track A "The effect of KM practices on business results " was to determine the impact of various elements of intellectual capital (IC) on the performance of Russian companies, and identify KM practices that stimulate the development of Russian companies’ IC and, accordingly, have the greatest impact on their performance.
The following scientific results were obtained during three years of work:
There was analyzed the level of penetration of various knowledge management practices into organizational performance, and there were scrutinized the IC elements that influence the results of corporate performance.
The research results show that structural and human capital influence the performance of Russian manufacturing companies, while the relative capital does not. At the same time, structural capital exerts a stronger influence than human capital. It is also found that the greatest effect on firm performance could be reached through the usage of KM methods and practices aimed at the development of structural capital.
There were not revealed any statistically significant dependencies between IC elements in the sample of Russian companies. Thus, we cannot make an unambiguous conclusion that investments in one of the IC elements contribute to the development of another IC element.
KM practices play an important role in the development of IC elements that are, in turn, related to the enterprise performance. The group of KM practices that implies the usage of information technologies contributes to the development of all three IC elements - human, relational and structural.
The estimates of the IC elements obtained through the survey of the managers are poorly correlated with proxy variables derived from real financial reports. Subjective estimates of IC elements are interrelated with the sales and asset profitability figures of Russian manufacturing companies.
The results reflect the peculiarities of the Russian market. In general, they are comparable with the research findings made in developed markets.
There are many understudied issues in the field of KM and IC management in the emerging markets. Some authors conclude that Russia is a specific cultural context in which KM practices work differently than in developed countries (Andreeva, Ikhilchik, 2009, May, Stewart, 2013, Xu, Meyer, 2013). Moreover, some leading foreign scholars show an interest in studying the specifics of KM in Russia (Michailova, Husted, 2003, May, Stewart, 2013, Puffer, McCarthy, 2011), since they suggest that the Russian institutional context is unique and distinct from those that underlie foreign KM theories. Thus, the study of KM practices in Russian companies can be useful for the further development of the KM theory in general, and therefore interesting to a broad international audience.
Within the framework of our research, some peculiar features of KM practices and IC elements were revealed in the Russian market. Structural capital proved to be the main driver of financial performance of Russian manufacturing companies, and KM practices that imply the use of information technologies contributes to the formation of all three IC elements - human, relational and structural.
The research findings based on the analysis of relationships between KM practices, IC elements, and financial performance indicators allow making the following recommendations to Russian manufacturing companies:
- KM practices play an important role in the development of IC elements in Russian manufacturing companies. The analysis showed that only one of seven analyzed KM practices - the use of information technologies - affects the development of all three IC elements (human, relational and structural). Thus, managers of manufacturing companies should pay special attention to the development of internal information systems (portals, intranet systems, etc.) that allow employees to increase the effectiveness of knowledge sharing procedures and, thus, gain a competitive advantage.
- Despite the importance of IC for the financial performance of companies, the impact of three IC elements on performance indicators is not the same. The analysis conducted on a sample of 240 companies showed that managers should pay special attention to the structural capital that allows codifying, transferring, transforming and exchanging knowledge through documents and various information systems. Investments in structural IC element lead to the highest growth of financial performance in comparison with other IC elements.
- Managers’ subjective estimates of the IC effects on financial performance do not completely coincide with the IC effects on actual financial indicators obtained from the databases. It implies that the Russian manufacturing companies’ managers should more objectively estimate the quality of KM practices and the level of IC development in their companies. There could be conducted qualitative analyses that allow comparing current KM practices with the best companies in the industry or leading foreign benchmarks based on annual reports or other reporting forms (including integrated reports).
The main practical implication is that the simultaneous use of multiple KM methods and practices does not necessarily improve the KM effectiveness and organizational performance. In addition, subjective estimates of IC elements are not strongly correlated with proxy variables of IC elements and real financial indicators of Russian manufacturing companies. To optimize the use of organizational resources, it makes sense for managers to focus on several KM methods and practices and IC elements that have the greatest impact on financial performance in a specific organizational context. The research results can help Russian executives make an informed decision on the choice of KM practices.
Track B. "Typology and generalized enterprise knowledge map"
The main results of three-year work on the track B "Typology and generalized enterprise knowledge map" are the following:
There is introduced the concept of triad “knowledge domain – knowledge types and characteristics – KM tools and methods” which implies that some knowledge types and characteristics predominates in certain knowledge domains, and thus some KM tools and methods are better suited for certain knowledge domains.
The elements of the triad are systematized. To structure the typical knowledge areas of the enterprise, there was proposed a generalized knowledge map with three dimensions: 1) objects that are important for business; 2) activities carried out in the company; and 3) the industry. To describe the types and characteristics of knowledge, a new typology is offered. The typology includes only those knowledge types and characteristics that significantly influence the choice of KM tools and methods (or their groups). The KM tools and methods are classified into universal, multidomain (for example, communities of practice, libraries or knowledge bases, banks of ideas), and domain-specific. Systematization of universal KM tools and methods is based on the stages of knowledge transformation process (knowledge life cycle). Domain-specific KM tools and methods are structured according to the areas of knowledge identified on the generalized knowledge map.
The study of KM tools and methods in different domains allowed classifying tools and methods into following groups:
- tools and methods that were originally designed to solve problems in a certain domain;
- tools and methods that were originally designed to work with information [+ staff practices + management practices] in a certain domain and consequently expanded to other KM domains;
- tools and methods that actually solve KM tasks in a certain domain, but are not called KM tools.
Examining correlations between the elements of the triad showed that certain knowledge types and characteristics are related to specific problems, risks and challenges, which prevail in certain knowledge domains, and, thus, affects the selection and use of KM tools and methods. The study revealed: (a) the increased importance of some universal KM tools and methods; (b) differences in priority factors that define the choice of KM tools and methods; (c) the use of specialized KM tools and methods to solve domain-specific problems.
The practical implications of the study are the following:
When selecting, implementing and using KM tools and methods, there should be considered knowledge types and characteristics that are critical to a knowledge domain. Knowledge audit can be used, and knowledge maps can be developed to identify critical knowledge types and characteristics. For the knowledge domains considered in the tracks C, D and E, the recommendations suggested in the corresponding tracks can be used.
In any knowledge domain, there are KM tools and methods that can either directly solve the KM tasks, or be expanded / supplemented to solve the KM tasks. The advantages of universal KM tools and methods are the standardization / unification of the ways to work with knowledge for the whole company and the possibility of cross-functional knowledge transfer. The advantages of specialized KM tools and methods are their integration into practice, professional habitualness, and higher maturity. The use and / or expansion of the existing domain-specific tools can help integrate KM practices into the company's activities in a harmonious way.
In order to correctly select KM tools and methods, it is useful to firstly identify the required functions of KM and then look for the ways to handle them using either universal or domain-specific KM tools and methods (even if they are initially not associated with KM).
The creation of KM system implies the integration of universal and domain-specific KM tools and methods, which, in turn, makes necessary to consider all KM components: processes, information / content, people, technologies.
Track C. "Working with knowledge on products/services and customers, customer orientation"
The following research objectives were met during three-year work on the track C "Working with knowledge on products/services and customers, customer orientation":
1. Analyzing the current trends in the application of customer-oriented approach to the process of innovation creation.
We have adopted an integrated definition of customer orientation as a company's activity aimed to identify target consumers and their key needs to create long-term value, taking into account the interests of the company’s owners, managers and employees, to improve the company's economic performance in the long run. The empirical study allowed to reveal the clusters of Russian companies with different customer orientations.
2. Determining the role of customer-firm interactions in the network structures using the principles of open innovation.
An integrated approach to the identification of the "early" and "late" meta-stages of innovation process is proposed and justified; there is developed a methodology to apply the customer-oriented approach to the incorporation of external partners and customers at the different stages of innovation process taking into account different success factors. The approach is tested on the sample of innovation-active companies. The results are compared with the leading companies in various industries that apply customer-oriented approach to innovation creation.
3. Preparing an analytical review of current trends in the application of customer-oriented approach to innovation creation and customer collaboration in the process of value design.
4. Conducting an empirical study to identify the success factors in the application of customer-oriented approach by Russian companies.
There has been conducted an empirical study demonstrating the consequences of managing outbound customer knowledge with manipulative marketing influence tactics (at the example of a specific marketing tactic - hidden price increase).
5. Preparing the conceptual article on the basis of the developed methodology; preparing the case study based on the best practices of customer-orientation approach application to innovation creation, knowledge management, and customer collaboration in the process of value creation.
There is proposed a model systematizing various knowledge flows circulating between firms and their customers. A model differentiates customer knowledge management practices based in the directionality of knowledge flows (outbound vs inbound) and strategic orientation (proactive vs reactive). Two additional operational characteristics of customer knowledge management practices are identified: 1) embeddedness that defines the degree to what the firm incorporates the customers into the firm’s operations; and (4) personification that defines the degree to what the information offered to the customer fits its individual needs or the information provided by the customer is treated individually rather than in an aggregated way.
Track D. "Working with knowledge in operations management"
The main task in the track D was to develop KM tools and methods in the field of operations management and supply chain management, based on context-oriented means of decision-making supporting in production networks.
The following major scientific results were obtained during three-year work.
There is proposed a multilevel conceptual/technological model of knowledge management for decision support in production networks, which describes (1) the localization of knowledge in interconnected problem-oriented networks (social network, knowledge network, information network, competence network and interorganizational network) and (2) technologies of knowledge transfer (virtual communities, personnel and knowledge management, the Internet and cloud computing, crowdsourcing, recommendation systems, knowledge maps, semantic-driven interoperability / compatibility based on ontologies).
There is proposed a general methodology of context-based knowledge management to support decision-making in production networks, based on the integration of the organizational and individual contexts. Simulation is carried out at two levels: abstract, when a conceptual description of the problem to be solved is given in terms of the problem area, and operational (applied), representing knowledge of a specific situation. Such a multilevel ontology-oriented description of knowledge allows (a) increasing the efficiency of decision-making by identifying and using current knowledge; (b) facilitating the scalability of the production network and mutual collaboration.
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.
There were formulated recommendations on the functional structure of context-oriented knowledge management system for decision support in production networks and activity flow leading to accumulate declarative and procedural knowledge (described in terms of the standard 1872-2015 IEEE Standard Ontologies for Robotics and Automation) by a network expert group.
Track E. "Working with knowledge in strategic management and organizational development"
Scientific results obtained during three-year work on the track E "Working with knowledge in strategic management and organizational development":
This area is characterized by the presence of poorly structured and complex tasks. There could be highlighted the following problems in the field of strategic management: 1) Cognitive (information overload, opinion rigidity, etc.); 2) Social (the need to reconcile the opinions of different team members, etc.); 3) Emotional (the lack of connectedness between personal and strategic development, etc.); 4) Systematic (the complexity of decision quality assessment, ambiguous interrelations between different strategic actions, inconsistency of strategic and operational plans, etc.).
Visual methods of structuring knowledge structuration are proposed to deal with these problems. There are identified three main classifications of visual methods that are relevant for strategic management and organizational development: K1 - by the stages of strategic management process, K2 – by knowledge aspects, K3 - by form. The classification by knowledge aspects and framework of visual method choice were approbated in frame of the project.
There were examined and developed the visual methods to model organizational abilities - a key concept in the area of strategic analysis and corporate structure design. In particular, there was conducted a review of capability-based planning methods and visual tools used in this area. Based on the review, an integrated approach to capability-based planning was proposed that allows analyzing the whole company using capability maps and heat maps, as well as exploring and planning the development of an individual capability using radar charts and enterprise architecture methods (through the integrated models of business processes, services, etc.). The main methodological components have been successfully tested on a number of cases.
It is found that matrix (tabular) methods are more effective than diagrams for a number of situations and tasks. Therefore, there was conducted a review of the matrix (tabular) methods used in the tasks of strategic management and organizational development. In the project, a table-graphical method of strategic enterprise alignment was proposed and tested.
The potential of using the methods and tools of enterprise architecture management for the acquisition, structuring, storage, distribution and application of knowledge in the field of strategic management and organizational development is identified. The enterprise architecture management allows describing, analyzing and developing the enterprise structure, functions and objectives. The enterprise architecture management tools take advantage of various formats of knowledge structuring and representation (visual, tabular, text) and help integrate and automatically convert different data formats. The literature review revealed that methods and tools of enterprise architecture management can strengthen strategic management in the following directions:
- Identification, formalization and visualization of key constructs and models related to strategic management;
- Application of design techniques and tools to solve business problems;
- Application of automated support system to describe, analyze, and develop the enterprise structure, functions and objectives.
The enterprise architecture management is linked with the ideas of a systematic approach to managing and changing organizations in the digital economy and business dependence on information technology. It increases the relevance of the proposed approach at the current time, when companies need to create and successfully implement a digital business strategy.
Based on the research results, the following recommendations can be formulated.
When solving various tasks of strategic management and organizational development, it is advisable to use not only textual, but also visual and tabular/matrix methods of knowledge representation. To select the visual methods, it is recommended to use the classifications identified in the project.
For the integration of strategic and operational management, it is recommended to use visual planning methods based on abilities, as well as the table-graphical method of strategic alignment.
As the visual and matrix methods of knowledge management become more mature and widespread, it is recommended to apply these methods and tools to manage the enterprise architecture.