Chapter II. KNOWLEDGE TRANSFER ISSUES
1. Knowledge in an organization and forms of its manifestation
The issues of knowledge transfer requires prior definition what is knowledge and what kinds of it are there, what is its place in organization of the enterprise. Hence, it is above all necessary to define the notion of knowledge. It is important to distinguish general definitions, referring to knowledge at any time and place, without distinction of its extent and depth, and specific definitions relating to a specific area, type, need or purpose51.
The most general are encyclopaedic definitions of knowledge. New Comprehensive Encyclopaedia52 defines knowledge as a broad set of information, views, beliefs, etc., which cognitive and/or practical values are attributed to.
The same publication under the same term gives definition of knowledge in a narrower sense: „knowledge is the totality of reliable information about reality with ability to use them in modern society. Knowledge in this sense is above all, but not limited to, scientific knowledge”53.
Even more specifically knowledge is defined by J. Apanowicz54 who writes that human knowledge is observation, information and phenomena that constitute facts about the existing (surrounding us) reality. There is a clear difference between the two definitions of knowledge (encyclopaedic and the one given by J. Apanowicz).
Knowledge in the latter phrasing is not only a collection of information, views and beliefs which are cognitively and practically valuable, but reliable information about reality together with the ability to use them currently.
Even more restrictive definition concerns marking its boundaries in specific disciplines of knowledge. Such are the definitions of organizational knowledge.
Some of the terms of knowledge can for example be quoted from collective paper edited by A. Stabryła55:
51 P.F. Boono, Managing Intracorporate Knowledge Shaning, Eburon, Delft 1977, p. 54.
52 Nowa Encyklopedia Powszechna, volume VI, PWN, Warszawa 1997, p. 23.
53 Ibidem, p. 58.
54 J. Apanowicz, Metodologiczne uwarunkowania pracy naukowej, Difin, Warszawa 2005, p. 1.
55 A. Stabryła (ed.), Doskonalenie struktur…, op. cit., p. 255–260.
• knowledge as a resource of an organization (resource of a person) of varying degree of reification;
• knowledge as a category related to information („information along the manner of its use”)56.
In turn, J. Kang57 and his colleagues further clarify the definition of knowledge – „Knowledge is a critical resource for organizations competing for competitive advantage.” This definition omits, however, situations in which knowledge is an asset of a company not seeking market advantage but, for example, only maintaining its position or struggling to remain in the market at all. „Organizational knowledge creates a useful methodological and practical basis, and therefore a thesis must be assumed that the successful organizations are only those which consistently and consciously acquire new knowledge, disseminate it throughout the organization and rapidly transform themselves into intelligent organizations.”58.
Treating organisational knowledge in the enterprise as a resource seems sufficient to use this term in further research. The same problem – of certain indeterminacy – occurs when it comes to defining knowledge transfer in the next subsection of Chapter II. The definition of knowledge alone, however, is not sufficient, as in particular analyses we deal not with knowledge at all but with its specific forms and manifestations. One of the basic divisions of knowledge, first introduced by M.
Polanyi59 and G. Probst60, and later developed by J. Nonaka and H. Takeuchi61, is the distinction between tacit knowledge and explicit knowledge, together different manners of their conversion.
As tact knowledge understood is „experience, skills and relations often expressed through the notion of know-how”62. On the other hand, explicit knowledge is defined as knowledge articulated, often to a large degree codified, in a part of the literature of the subject matter referred as the information or know-what. In later chapters, the division of knowledge into explicit and tacit will have important implications due to the significant differences in the difficulty of transfer of both types of knowledge.
56 J. Baliczyński, Cz. Mesjasz, A. Stabryła, Interpretacja pojęcia wiedzy i gospodarki opartej na wiedzy, w: A. Stabryła (ed.), Doskonalenie struktur…, op. cit., p. 165.
57 J. Kang, M. Rhee, K.H. Kang, Revisiting Knowledge transfer: Effects of Knowledge characteristics organizational effort for knowledge transfer, “Expert Systems With Application”
2010, No. 37, p. 81.
58 H. Dźwigoł, Podejście systemowe w procesie restrukturyzacji przedsiębiorstwa, Politechnika Śląska, Gliwice 2010, p. 64.
59 M. Polanyi, The Tacit Dimension, Garden City, Anchor Books, New York 1967, p. 87.
60 G. Probst, S. Raub, K. Romhardt, Zarządzanie wiedzą w organizacji, Oficyna Ekonomiczna, Kraków 1993, p. 76.
61 I. Nonaka, H. Takeuchi (eds.), The Knowledge…, op. cit., p. 59–61.
62 B. Mierzejewska, Transfer wiedzy…, op. cit., p. 32.
Hence, it is important to examine the state of the knowledge in this regard, in companies that are involved in the knowledge transfer process.
In this situation, it was possible to take advantage of the knowledge sets established in the preceding chapter, brought to the most elementary form of its manifestation, carried out for the purpose of examining the motives for mergers of enterprises. The same experts who decided to allocate individual fragments of knowledge to various motives attempted to classify them as tacit and explicit knowledge.
Table 7 shows the specific knowledge expressions broken down by tacit and explicit knowledge, and which may belong to both types simultaneously. For this purpose, data from Table 4 was used, where individual components of knowledge without repetitions, necessary by assigning to motives in which the same component could be found more than once. Types of components are labelled: j – explicit knowledge; c – tacit knowledge; j + c – explicit and tacit knowledge at the same time. This last designation requires clarification. Sometimes, the component contains intertwined explicit and tact information in different proportions. For example, the component – information and qualitative analysis of competition – consists of available documents and complementary confidential information, provided in the context of mutual relations between employees of both companies.
Table 7. Components of knowledge – explicit and tacit
No. Component name Component character
1. Explicit knowledge of competitors and markets explicit
2. Suppliers’ market knowledge tacit
3. Personal relations with suppliers and buyers tacit
4. Information and analysis of competition quality explicit + tacit 5. Knowledge of R & D by the competition (inventions, innovations, quality,
patents) explicit + tacit
6. Marketing knowledge of customers tacit
7. Complaints analysis explicit
8. Portfolio of orders and ability of its shaping explicit + tacit
9. Knowledge in the scope of foresight explicit + tacit
10. Knowledge of statistical and econometric tools explicit
11. Standards and regulations explicit
12. Analyses, calculations and synthesis explicit
13. Forecasts of research cells explicit
14. R+D concerning development of the enterprise explicit
15. Documentation and unofficial news concerning quality tacit
16. Personal knowledge of specialised employees tacit
17. Ability to optimally shape stocks tacit
18. Product, technology and organizational standards explicit
19. Operating records of machinery and equipment explicit
20. Record of inspections, periodic and capital repairs explicit
21. Knowledge of costing explicit + tacit
No. Component name Component character
22. Knowledge of production technology tacit
23. Materials for analysis, calculation and cost synthesis explicit
24. Ideas, patents, innovations explicit
25. Product documentation explicit
26. Employees with valuable skills and competencies tacit
27. Technical descriptions and manuals explicit
28. Computer programs, utility models, trademarks explicit
29. Planning experience tacit
30. Practical experience of employees in the sphere of sales tacit 31. Skills and competences in collaboration with the environment tacit 32. Relations with customers and sales representatives tacit 33. Customer information on the quality, features and prices of the products explicit
34. Current R & D works within the company explicit
35. Knowledge of production capabilities and delivery dates explicit + tacit
36. Knowledge of optimum stock shaping explicit + tacit
37. Knowledge of laws and regulations and internal instructions explicit + tacit
38. Relations with debtors and creditors tacit
39. Tacit knowledge of financial workers tacit
40. The ability to regulate financial flows tacit
41. Configuration of organizational units explicit
42. Principles and organization of autonomous units explicit
43. Knowledge of quality regulations explicit
44. Specialization of divisions and organizational units explicit 45. Health and safety regulations, inspection and accident reports explicit
46. Fire Regulations explicit
47. Sanitary and epidemiological reports. explicit
48. Personal experience in occupational safety and health, fire, sanitary and
epidemiological fields. tacit
49. External and internal regulations on the protection of the air, land and
water explicit
50. Standards for emissions of gases, land contamination and water pollution explicit 51. Instructions for behaving in the event of hazards explicit
52. Production technology of explicit
53. Projects, technical descriptions, manuals explicit
54. Intangible goods protection period of which has expired explicit
55. Practical experience of supervisory staff tacit
56. Tacit knowledge of executive workers tacit
57. Information and analysis of product characteristics explicit Source: own study.
Based on the data in Table 7, a new compilation, containing data on the number of knowledge components, their respective types and their structure was prepared.
Table 8. Number of components in each type of knowledge and their structure Types of components Number of components Share %
Explicit knowledge components 32 56,1
Tacit knowledge components 17 29,8
Explicit and tacit knowledge components at the same time
8 14,1
Total 57 100
Source: own study.
The spatial structure of the types of knowledge is presented in Figure 3.
Figure 3. Number of components in each type of knowledge and their structure
0 10 20 30 40 50 60
32 17
8
57
Number of components
Knowledge components
Total
Components of explicit and tacit knowledge at the same time Tacit knowledge components
Explicit knowledge components Source: own study.
Figure 3 shows that explicit knowledge constituted an overwhelming majority, covering more than half of the examined components; however tacit knowledge also has a significant share in the examined set of components. Components that are composed of explicit and tacit knowledge have a lot smaller share.
The data above allow do draw a rather optimistic conclusion that the transfer of knowledge in mergers of enterprises will be facilitated due to participation of explicit knowledge, which is inherently easier to transfer. For this reason, one more transformation of the analytical material was performed, by attaching weights to data, indicating their importance for intellectual capital and the economy of the studied enterprises. Due to the lack of the possibility to perform accurate estimation, the weights were rounded to natural numbers, representing the average, larger, and large meaning of individual components. The results obtained can be used to show their corrected percentage structure or at least to rank them on the order scale if the structural data did not seem sufficiently convincing.
Table 9 presents comparative data of primary and adjusted knowledge components and their structure.
Table 9. Components of knowledge – primary and adjusted Types of components Number of
components Share % Value of adjusted
components Share %
Składniki wiedzy jawnej 32 56 32 36
Składniki wiedzy cichej 17 30 34 38
Składniki wiedzy jawnej i cichej jednocześnie 8 14 24 26
Total 57 100 90 100
Source: own study.
After the weighing operation has been performed, the number of components in each type of knowledge has changed. While the primary data pointed to a clear advantage of the explicit knowledge, after the use of scales, explicit knowledge is essentially equal to the tacit one. The expression „in principle” is to indicate that, using the estimation method, the advantage of two components in favour of tacit knowledge is irrelevant. This will indicate problems in estimation of the tacit knowledge that will be presented in the following parts of the paper.
Apart from the division into the above-mentioned basic types of knowledge one has to take into consideration the additional distinction, which is important due to the nature of the indicators.
This means the formal aspect of components. It is not indifferent what kind of knowledge is converted or transferred. There are elements of knowledge that are communicated more easily and briefly, e.g. explicit knowledge, while tacit knowledge, otherwise hidden, for understandable reasons, is much more difficult.
These difficulties are even greater when knowledge is transferred within the merger of business, than besides the problems arising from the conversion rules, organizational barriers arise, as a result of overcoming barriers in the form of two different organizational structures.
The difficulties described above, concerning the transfer of tacit knowledge as a whole are not entirely exhaustive, as some groups of tacit knowledge can be distinguished, externalization of which is very diverse. Three types of tacit knowledge are distinguished in this paper: skills, experience and relations. In each of these groups, externalisation progresses with varying intensity. Passing skills is difficult, anyway different, depending on which level it involves, for example, contractors, middle management or top management. Characterizing the constituents of the tacit knowledge components, one can state that skills can be relatively easily acquired at the lowest level; on the other hand it is much harder on higher levels of management.
Experience requires the same as acquiring skills, i.e. observation and imitation, but in a sufficiently long period, which is, in fact, a feature of experience.
Relations are the most difficult to communicate. In order to transfer them, alongside skills and experience, one must have a specific knowledge of psychology as well as the internal abilities needed to establish, sustain, use, bearing in mind that these are usually bilateral relations. For example, if a logistics specialist wants to ensure flow of means under the most difficult market conditions using private relations, he must remember the principle of reciprocity. The division of tacit knowledge into these groups of components seems to be fully justified.
Much more possible divisions may occur by the attempt to divide explicit knowledge. However, the division is simpler here, as the knowledge itself is explicit, usually codified. Based on the principle of clear separation of particular groups of explicit knowledge components and taking into account the criterion of difficulty in transferring knowledge, the following set of groups of explicit knowledge components was proposed:
• internal rules and instructions,
• standards,
• analyses,
• reports,
• forecasts,
• patents, ideas and innovations,
• documents.
The next step was to assign individual knowledge components to them.
Table 10 contains the knowledge components grouped according to the above-defined criteria, covering the tacit and explicit knowledge. In this case, the division of cognitive knowledge j+c has been dispensed with; these components of knowledge are classified into the corresponding generic groups, guided by the assumed advantage of one of the components – j or c.
The results of the division are shown in Table 11.
Table 10. Components of tacit and explicit knowledge grouped by types Tacit knowledge
Skills Experiences Relations
− Ability to optimally shape stocks
− Employees with valuable skills and competencies
− Skills and competences in collaboration with the environment
− Regulation abilities on financial flows
− Knowledge of employees executives
− Market knowledge of suppliers
− Marketing knowledge about customers
− Knowledge of foresight
− Knowledge of production technology
− Planning experience
− Practical experience of sales staff
− Individual experience in the fields of occupational safety and health, fire-protection, Sanitary and epidemiological
− Practical experience of supervisory staff
− Documentation and news unofficial concerning quality
− Personal relations with suppliers and buyers
− Relations with customers and sales representatives
− Relations with debtors and creditors
− Tacit knowledge of financial workers
Explicit knowledge Internal regulations, records,
instructions and standards Standards Analyses
− Operating records of machinery and equipment
− Record of inspections, periodic and capital repairs
− Technical descriptions and manuals
− Knowledge of laws and external and internal instructions
− Knowledge of quality regulations
− Fire protection regulations
− Internal instructions In case of threats to the protection of air, land and water
− Standards and legislation
− Product, technological and organizational standards
− Knowledge of costing
− Knowledge of optimum stock shaping
− Standards for emissions of gases, land contamination and water pollution
− Explicit knowledge of competitors and markets
− Information and analysis of competition quality
− Complaints analysis
− Knowledge of statistical and econometric tools
− Analyses, calculations and synthesis
− Materials for analysis, calculation and cost synthesis
− Customer information on the quality, features and prices of the products
− Current R & D works within the company
− Information and analysis of product characteristics Forecasts Patents, ideas and innovations Documents
− Knowledge in the scope of foresight
− Forecasts of research cells
− Knowledge of production capabilities and delivery dates
− Knowledge of R & D by the competition (inventions, innovations, quality, patents)
− R+D concerning development of the enterprise
− Ideas, patents, innovations
− Computer programs, utility models, trademarks
− Intangible assets, protection period of which has expired
− Portfolio of orders and ability of its shaping
− Product documentation
− Configuration of organizational units
− Principles and organization of autonomous units
− Specialization of divisions and organizational units
− Production technology
− Projects, technical descriptions and manuals
Reports
− Health and safety regulations, inspection and accident reports
− Sanitary and epidemiological reports.
Table 11. Knowledge in terms of genre
No.
Tacit knowledge Explicit knowledge Total
Group name
4. × × × Internal regulations, records,
instructions and standards 8 20 8 14
5. × × × Standards 5 13 5 9
Table 12. Podział wiedzy pod względem rodzajowym (formalnym) Tacit knowledge
Stan-dards Analyses Reports Forecasts Patents, ideas
and innovations Dokuments
8 5 9 2 3 5 7
20% 13% 23% 5% 8% 13% 18%
Source: own study.
Intuitive conviction that the basic type of tacit knowledge is experience is confirmed. It follows that the bonus for long-term employees is justified by the fact that they are primarily a source and a carrier of knowledge. As far as knowledge is concerned, experience takes first place with analyses (open knowledge). Also the other two categories of tacit knowledge (skills and relations). The picture of explicit knowledge is slightly more diverse. Among its constituents, there are three categories that together account for over 40% of explicit knowledge. These are (mentioned above): analyses (16%), internal regulations, records, manuals and standards (14%), documents (12%). Among them the most important role is played by analyses.
Compared to the other two categories contain a lot of basic knowledge (combinations
of knowledge) that can be directly used by the acquiring entity. Rules, manuals and documents are less important, as they contain a lot of commonly known facts, not very useful for the acquiring entity in the process of enterprises consolidation. A significant share of total knowledge has the item „patents, ideas and innovations”
(13%). The market value of knowledge under this item is actually significantly higher than in the other categories, but it is practically impossible to value it, at least in its other types, therefore comparisons are impossible. Also standards have high share (9%). Properly established all kinds of standards, such as labour inputs, material consumption, labour productivity, are a valuable source of knowledge that can be used in a new enterprise. It should be emphasized that only well-designed and successful standards can be fully used in a new company (most is probably commonly used in many companies and is not a particularly valuable acquisition).
Other categories of general knowledge are of lesser importance, although in the in correctly prepared forecasts (8%) there may be important guidelines for management of the newly established consolidated enterprise. Reports have the smallest share. Sometimes they are drawn by independent controllers (especially external ones) and may contain important information that can significantly improve the integration process of the two consolidated companies. The effort required to pick this knowledge out of banal and typical events is often unprofitable.
The above-described fields, elements and components of knowledge grouped according to different criteria (tacit, explicit knowledge, types of knowledge) give a very detailed and varied picture, denying the often popular imagination. An image of a knowledge creating enterprise is often reduced to inventions and innovations in large corporations. This brings consequences in considering knowledge transfer that is actually more complicated than what it appears to be and contains not only a
„big transfer”, but also one that is not an explicit or concealed subject of transactions involving mergers or acquisitions.
The above-described division and structure of knowledge by elements, components and categories will be presented in depth in the knowledge transfer analysis, described in the next subsection of the paper.