Preface for the Third Edition - Read

5 Strategy
5. Strategy 93
Considering knowledge as the key resource in an organization has substantial strategic
implications. It seems evident that an organization’s strategic choices have to
consider the way it handles its knowledge assets.
This chapter is intended to answer the following questions: why should an organization
invest in knowledge management? Along which basic lines could it proceed?
What general initiatives can be suggested for a KM effort? Which strategies
have proven to be successful? As knowledge management is understood quite differently
by different scholars and comprises heterogeneous concepts 166 , it is not
surprising that KM goals as well as procedures, starting points and perspectives to
develop KM strategies vary widely as well.
Firstly, recent developments in strategic management will be reviewed in order
to understand the possible relationships between a knowledge or knowledge management
strategy and business strategy (section 5.1). Then, an array of different
knowledge management goals and strategies will be presented (section 5.2) which
will be compared to each other in the light of the perspective taken in this book.
Finally, success factors and barriers to a KM initiative will be discussed which
have to be addressed when a KM strategy is implemented (section 5.3).
5.1 Strategy and knowledge management
There is broad agreement in the management literature that knowledge management
has to be solidly linked to enterprise, corporate, business or functional area
strategy 167 and therefore ultimately to the creation of economic value and competitive
advantage, in order to be a sustained effort (e.g., Earl/Scott 1999, 36f, Zack
1999a, 57, Zack 1999b, 142). However, this link has not been widely implemented
in practice 168 . This is due to the lack of strategic models to link knowledge management
efforts (in the sense of knowledge-oriented processes, organizational
structures, culture-related activities and the implementation of technologies) on the
one hand and strategic management on the other hand.
166. See section 4.1 - “Knowledge management” on page 21.
167. For a discussion of the differences between enterprise strategy—the umbrella that
encompasses all further strategies and considers the organization’s relationships to the
non-business environment, corporate strategy—what businesses the organization
should be in, business strategy—how should the organization compete in a given business,
and functional strategy—linking functional area policies to the functional area
environments, see Schendel/Hofer 1979, 11ff, also Hofer/Schendel 1978, 46ff. At this
point, it still remains unclear on which level, if not on all levels, knowledge management
should be linked to strategy. Thus, the following investigation will only refer to
strategic management in general which encompasses the complete process of formulation,
implementation and evaluation of strategies on all levels.
168. See Zack 1999b, 126 and the empirical studies cited there; see also part C.