Importance of corporate/organizational culture

Introduction

Knowledge management (KM) is an imperative asset for successful organizations and projects. Since KM plans won’t flourish when they are not grounded into the organizational culture, it is of utmost importance to take cultural aspects into account when developing and implementing KM strategies and policies in an organization. Cultures that hold back knowledge sharing are barriers for knowledge asset creation and empowerment.

Today’s business-world cannot be imagined without knowledge management, controlling and sharing. Many companies today exist because of the fact that modern technology allows better and more efficient knowledge sharing and processing. These technologies may be implemented, because of an organizational police, and this on the other hand may be integrated into the organization’s culture. The culture must be defined and managed properly to ensure good KM, and KM may lead to a better corporate culture.

In this paper, the relationship between KM and corporate culture will be discussed, as well as the importance of corporate culture in KM.

What is corporate culture and knowledge management?

To conduct a connection between corporate culture and KM, we first have to define and understand each of these terms individually.

Corporate Culture:

Corporate culture is the circumstances in which work is done in an organization. Sannwald (2000, p. 8) defines it as the “… fundamental assumptions that people share about an organization’s values, beliefs, norms, symbols, language rituals, and myths”. As we can see from the definition above, corporate culture provides the people with a framework to work with and guidelines for their actions. It is important to notice that these values and norms are shared; therefore people in the organization obey and accept them. Corporate culture can be described as the manner things are done in an organization.

Knowledge Management:

Malhotra (1988, p. 58) describes KM as “… the critical issues of organizational adaptation, survival and competence against discontinuous environmental change. Essentially it embodies organizational processes that seek synergistic combination of data and information-processing capacity of information technologies, and the creative and innovative capacity of human beings”. In essence, KM is the generation, storage, transmission, processing, sharing and presentation of organization’s knowledge. KM is difficult to define, because it covers a broad spectrum. Malhotra (2005, p. 15) has categorizes KM in three different models, namely input-driven, processing driven and outcomes driven, dividing the different aspects and definition to increase the understanding and usage of KM.

Overview of corporate culture

By expanding the concept of corporate culture, Jashapara (2004, p. 187) made a distinction between organizational climate and organizational culture. Organizational culture is the unwritten rules and beliefs under which people in an organization interact. Climate on the other hand is the moral environment and perceptions fixed into the organizations value system. Culture is transmitted from generation to generation, adapting and changing slowly, while climate is more static situation.

There a two levels of corporate culture:

1. Visible: All the characteristics that can be seen at the surface level.

This includes dress code, ceremonies and office layout.

2. Invisible: All the characteristics that cannot be seen, but only felt.

This includes discipline, social equality and empowerment of employees.

On a finer level we can explicate corporate culture according to Brooking’s (1999, p. 110) five indicators:

1. Rituals: These are events that take place to increase the personal bonding between colleagues (e.g.: corporate sports days).
2. Ceremonies: Formal occasions where employees or teams are recognized for their performance (e.g.: employee of the month).
3. Measures of success: The manner in which organizations determine if a project or task was successful (e.g.: the project has met the deadline).
4. Corporate beliefs: The attitude the employees have towards the organization (e.g.: employees think that their company produces the best product).
5. Values: The baseline for the behaviour of employees in an organization, including how employees treat each other. The impact of corporate culture on knowledge management

Deploying a knowledge management system in an organization can only be successful if a culture is established with the system, so that knowledge in the organization may be shared with employees at any given time. Therefore effective knowledge management is directly influenced by a good corporate culture.

Kotter and Heskett (1992) elucidates a culture-knowledge-management relationship that emphasises three types of cooperate culture that has either a positive or a negative influence on individual outcomes that promotes KM. These types can be categorized in two groups:

1. Constructive culture: Will positively influence individual outcomes that support KM.
2. Defensive (Aggressive and Passive) culture: Will negatively influence individual outcomes that support KM.

If we can believe this relationship, then we can determine how employees in an organization support KM by measuring how they are standing in connection with the organizational environment. This means that if the culture in an organization is constructive then the employees will have a better relationship with the environment and their colleagues. This on the other hand supports knowledge sharing that is an important antecedent to KM. It may also be effective if an organization’s cultural policies are the backbone for the KM. The organization may for example have an unwritten rule that employees should immediately shared any new knowledge that may be of interest or necessitate to other colleagues.

There was pointed out on http://ivythesis.typepad.com (2010) that it is important to remember that organizational knowledge management is build on individual KM of employees. Hence, individuals are influenced by the corporate culture which either positively or negatively influences the management of an employee’s knowledge. This will again affect the KM of the organization. It is therefore important that the culture of any organization is fair and justified to ensure that KM is effective
Main characteristics of a knowledge management culture

Smith and McKeen (2003, p. 8) identified three main characteristics of a knowledge management culture.

1. Corporate cultures with high solidarity and sociability:

Increased sociability supports an environment where people are encouraged to be creative and accept creativity. Solidarity increases trust and knowledge sharing between people and gives them an advantage over their competitors.

2. Corporate cultures which emphasizes fair processes as well as fair outcomes:

Previously organizations required fair outcomes for their members. This includes a fair salary or promotions. The hope was that when people receive fair outcomes, they will be satisfied and increase their work performance. Recent studies however show that people make a link between fair processes of the organization and the behaviour as the result of these processes (Smith & McKeen 2003, p. 8). The organization’s fair processes involve individuals in the decision making that affect them.

3. Corporate cultures which recognizes employee’s work”

If an employee is recognized for his/her performance or work, it may have a positive effect on the individual and group performance, teamwork and problem solving. These recognitions don’t have to be public appreciations, but also could be in the form of a bonus or a thank you note.

The above three characteristics are common identifiers of a knowledge management/sharing culture and are part of a dual-way approach. This means that a corporate culture with these characteristics is mostly a knowledge sharing culture, and a knowledge sharing culture normally has these characteristics.

Brooking (1999, p. 126) focuses more on the knowledge management and how the employees and the organization relate to it. The following points are highlighted as characteristics of a KM culture:

1. Knowledge management needs to be embraced by all the users.
2. Knowledge management systems must have a long life.
3. Knowledge management must be measured and monitored.
4. The corporate memory must become a valuable corporate asset.

These are ideal characteristics of a knowledge sharing culture, but are not always presented as they should.

Conclusion

Knowledge management is a very important task in an organisation. Without a proper corporate culture, effective knowledge management is unproductive and redundant. Corporate culture and knowledge management were discussed as two individual concepts and then brought together by explaining the impact of organizational culture on knowledge management. A brief overview of corporate culture and the main characteristics of a knowledge sharing and management culture were also discussed.

Knowledge management must be seen as the controlling and administration of each employee’s knowledge. These components are brought together by a shared and accepted culture in the organisation. Therefore an organization must accommodate each employee in the culture, to ensure productivity, group dynamics and efficiency through knowledge sharing and supervision.

Small and large organizations must find ways to integrate knowledge management into their strategic vision, business mission and build a corporate culture that supports knowledge sharing, and motivate employees to support these initiatives.

Bibliography

1. Brooking, A. 1999, Corporate Memory: Strategies for Knowledge Management, North Yorkshire: International Thomson Business Press, pp. 109 – 138.
2. Jashapara, A. 2004, Knowledge management: an integrated approach, Essex: Harlow, pp. 185 – 212.
3. Kotter, J. P. & Heskett, J. L. 1992, Corporate culture and performance. New York, NY: Free Press.
4. Malhotra, Y. 1998, ”Knowledge management for the new world of business”, Journal for Quality & Participation, vol. 21, no. 4, pp. 58 – 60.
5. Malhotra, Y. 2005, ”Integrating knowledge management technologies in organizational business processes: getting real time enterprises to deliver real business performance”, Journal of Knowledge Management, vol. 9, no. 1, pp. 7 – 28.
6. Sannwald, W. 2000, “Understanding organizational culture”, Library Administration & Management, vol. 14, no. 1, pp. 8 – 14.
7. Smith, H. & McKeen, J. 2003, Instilling a knowledge sharing culture, Queen’s KBE Centre for Knowledge-based Enterprise, viewed 20 March, 2010 <http://www2.warwick.ac.uk/fac/soc/wbs/conf/olkc/archive/oklc3/papers/id25.pdf>.
8. Typepad 2010, Knowledge Management in Relation to Corporate Culture and Organisational Structure – How Organisational Structure and Culture Impact and Affect Knowledge Management, viewed 20 March, 2010, <http://ivythesis.typepad.com/term_paper_topics/2010/02/knowledge-management-in-relation-to-corporate-culture-and-organisational-structure—how-organisational-structure-and-culture.html>.