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Chapter 11
Managing Knowledge
Learning Objectives
1. What is the role of knowledge management and knowledge management
programs in business?
2. What types of systems are used for enterprise-wide knowledge management and
Chapter Outline
11.1 The Knowledge Management Landscape
Important Dimensions of Knowledge
The Knowledge Management Value Chain
Types of Knowledge Management Systems
11.2 Enterprise-Wide Knowledge Management Systems
11.3 Knowledge Work Systems
11.4 Intelligent Techniques
Capturing Knowledge: Expert Systems
Organizational Intelligence: Case-Based Reasoning
Key Terms
The following alphabetical list identifies the key terms discussed in this chapter. The
page number for each key term is provided.
3-D printing, 459
Agent-based modeling, 473
Artificial intelligence (AI), 463
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Augmented reality (AR), 462
Backward chaining, 465
Case-based reasoning (CBR), 466
Communities of practice (COPs), 453
Genetic algorithms, 472
Hybrid AI systems, 474
Inference engine, 465
Intelligent agents, 473
Intelligent techniques, 454
Organizational learning, 451
Social bookmarking, 456
Structured knowledge, 455
Tacit knowledge, 450
Taxonomy, 456
Teaching Suggestions
The opening case, “Designing Drugs Virtually,” demonstrates how an organization can
improve its business performance by organizing knowledge more efficiently. Drug
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A scientist developed a structure-based design that focuses on figuring out what a “lock”
looks like so it could fashion the right disease-fighting “key.” The new method relies on
powerful computers to do much of the analysis. The computers help evaluate structures
Section 11.1, “The Knowledge Management Landscape” Most students don’t think
about the differences between data, information, knowledge, and wisdom. It may be
helpful to follow pieces of sales data through each of the four entities. Data would be that
five widgets sold. Information about the widget sales would be that all five widgets were
sold in one month in the northwest region. Knowledge would extend the data and
information to show that it is an extraordinary event to sell five widgets in the northwest
Section 11.2, “Enterprise-Wide Knowledge Management Systems” Enterprise-wide
knowledge management systems help manage structured knowledge, semistructured
knowledge, and tacit knowledge. Enterprise content management systems organize the
first two – structured and semistructured. Taxonomies categorize information making it
easier to access. Companies use digital asset management systems to classify, store and
distribute information contained in graphics, videos, and audio files. Knowledge network
systems organize the third kind of knowledge—tacit knowledge.
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Interactive Session: Organizations: Albassami’s Job is not Feasible without I.T.
Case Study Questions
1. What systems are described here? What valuable information do they
provide?
The shipping information system used at Albassami is described in the case. The system
maintains all the sender information such as the sent car, the truck number, the sender
and receiving branches, and it also sends an SMS to the client acknowledging the arrival
of the car. The system also records the client’s data, and holds maintenance information.
By having all the information needed for the business and facilitating reporting and
3. How did implementing the Shipping information system address the business
needs and information requirements of Albassami?
All business processes are facilitated by the shipping system, and the knowledge
Knowledge Work Systems” Spend a few minutes discussing knowledge assets and
knowledge management. Ask your students to discuss how companies like Microsoft,
Interactive Session: Technology: Firewire Surfboards Lights Up with CAD
Case Study Questions
1. Analyze Firewire using the value chain and competitive forces models.
Firewire is using information systems to achieve a competitive advantage by
introducing new products and services to its customers that others are not. It is
2. What strategies is Firewire using to differentiate its product, reach its
customers, and persuade them to buy its products?
Firewire began using computer-aided designs (CAD) sent to cutting facilities to
design and build surfboards rather than doing all the work by hand. The computer-
3. What is the role of CAD in Firewire’s business model?
The new online CAD system provides a way to extend customization to a wider
market. The Firewire Surfboards’ Customer Board Design system allows users to
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4. How did the integration of online custom board design software (CBD), CAD,
and computer numerical control (CNC) improve Firewire’s operations?
The computer-aided design (CAD) process reduced the amount of work that had to be
done by hand by 10 percent. It also allowed the company to build its surfboards more
quickly and cheaply. It generates a precise three-dimensional model of the stock
Section 11.4, “Intelligent Techniques” In this section, students are introduced to
artificial intelligence, expert systems, cased-based reasoning, fuzzy logic systems, neural
networks, genetic algorithms, and intelligent agents. When discussing the material from
this section, remind your students of the history of our discipline. In the early 1980s,
expert systems were believed to represent the future of artificial intelligence and of
Review Questions
1. What is the role of knowledge management and knowledge management
programs in business?
Define knowledge management and explain its value to businesses.
Knowledge management is the set of processes developed in an organization to
create, gather, store, maintain, transfer, apply, and disseminate the firms knowledge.
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Describe the important dimensions of knowledge.
Table 11-1 describes the important dimensions of knowledge:
• Knowledge is a firm asset: an intangible asset; requires organizational
resources; experiences network effects as its value increases as more people
share it.
Distinguish between data, knowledge, and wisdom and between tacit knowledge
and explicit knowledge.
Data by itself has no meaning but is the first step in the creation of knowledge.
Knowledge includes concepts, experience, and insight that provide a framework for
Describe the stages in the knowledge management value chain.
Refer to Figure 11–2 for the knowledge management value chain. These steps
include:
• Acquire: knowledge discovery, data mining, neural networks, genetic
algorithms, knowledge workstations, expert knowledge networks
2. What types of systems are used for enterprise-wide knowledge management and
how do they provide value for businesses?
Define and describe the various types of enterprise-wide knowledge management
systems and explain how they provide value for businesses.
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There are three types of knowledge management systems:
• Enterprise-wide knowledge management systems are general-purpose,
firmwide efforts that collect, store, distribute, and apply digital content and
knowledge. These systems include capabilities for searching for information,
• Knowledge network systems provide an online directory of corporate experts
in well-defined knowledge domains and use communication technologies to
make it easy for employees to find the appropriate expert in a company. Some
knowledge network systems go further by systematizing the solutions
Describe the role of the following in facilitating knowledge management: portals,
wikis, social bookmarking, and learning management systems.
• Portals provide access to external sources of information like news feeds and
research, as well as to internal knowledge resources along with capabilities for
email, chat/instant messaging, discussion groups, and videoconferencing.
• Wikis provide a central repository for all types of corporate data that can be
displayed in a Web browser, including electronic pages of documents,
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2. What are the major types of knowledge work systems and how do they provide
value for firms?
Define knowledge work systems and describe the generic requirements of
knowledge work systems.
Knowledge work systems (KWS) are specialized systems for engineers, scientists,
and other knowledge workers that are designed to promote the creation of knowledge
and to ensure that new knowledge and technical expertise are properly integrated into
Describe how the following systems support knowledge work: CAD, virtual
reality, augmented reality, and investment workstations.
• CAD systems automate the creation and revision of designs using computers
and sophisticated graphics software. Benefits include the production of more
sophisticated and functional designs, reducing the time required to produce
designs, reducing expensive engineering changes, preparing fewer prototypes,
and facilitating the tooling and manufacturing process.
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3. What are the business benefits of using intelligent techniques for knowledge
management?
Define an expert system, describe how it works, and explain its value to business.
Expert systems are an intelligent technique for capturing tacit knowledge in a very
specific and limited domain of human expertise. These systems capture the
Define case-based reasoning and explain how it differs from an expert system.
Case-based reasoning (CBR) uses descriptions of past experiences of human
specialists, representing them as “cases” and storing them in a database for later
retrieval when the user encounters a new case with similar parameters. The system
searches for stored cases similar to the new one, locates the closest fit, and offers the
Define machine learning and give some examples.
Machine learning is the study of how computer programs can improve their
performance without explicit programming. A machine that learns is a machine that,
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Define a neural network and describe how it works and how it benefits
businesses.
Neural networks are usually physical devices (although they can be simulated with
software) that emulate the physiology of animal brains. Neural networks are used for
solving complex, poorly understood problems for which large amounts of data have
Define and describe fuzzy logic, genetic algorithms, and intelligent agents.
Explain how each works and the kinds of problems for which each is suited.
Fuzzy logic is a rule-based AI technology that tolerates imprecision by creating rules
that use approximate or subjective values and incomplete or ambiguous data. Fuzzy
logic represents more closely the way people actually think than traditional IF-THEN
rules. For example, if we all agree that 120 degrees is hot and -40 degrees is cold,
then is 75 degrees hot, warm, comfortable, or cool? The answer is fuzzy at best and
Intelligent agents are software programs that use a built-in or learned knowledge base
to carry out specific, repetitive tasks for an individual user, business process, or
software application. By watching the user of a program or system, an intelligent
agent may customize the software system to meet the user’s needs, reducing software
support costs. Intelligent agents can be used as wizards to help users do or learn how
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Discussion Questions
1. Knowledge management is a business process, not a technology. Discuss.
Knowledge that cannot be communicated and shared with others is nearly useless. It
becomes most useful and actionable when it’s shared throughout an organization.
2. Describe various ways that knowledge management systems could help firms
with sales and marketing or with manufacturing and production.
KMS have been developed for sales and marketing to help them access and share
information about customers, sales leads, competitors, and changes in pricing and
3. Your company wants to do more with knowledge management. Describe the
steps it should take to develop a knowledge management program and select
knowledge management applications.
The first step is to understand the dimensions of knowledge as outlined in Table 11-1.
These guidelines help lay the groundwork for selecting a knowledge management
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Hands-on MIS Projects
Management Decision Problems
1. U.S. Pharma Corporation: Headquartered in New Jersey the company has research
sites in Germany, France, the United Kingdom, Switzerland, and Australia. R& D is
key to its ongoing profits. Researchers need to share information with others within
and outside the company. Design a knowledge portal with design specifications
2. Canadian Tire: One of Canada’s largest companies that sell a wide range of goods
and services. The retail outlets are independently owned and operated. The company
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First, the company is wasting dollars and time by using offline mailings and paper
catalogs to pass information and knowledge to its dealers. All that should be made
available online. By keeping it out of the information system, it cannot be
Improving Decision Making: Building a Simple Expert System for Retirement
Planning
Software skills: Spreadsheet formulas and IF function or expert system tool
Business skills: Benefits eligibility determination
Using the information provided, build a simple expert system. Find a demonstration
copy of an expert system software tool on the Web that you can download.
Alternatively, use your spreadsheet software to build the expert system.
Students will need to find an expert system tool that provides a mechanism, called the
inference engine, which automatically matches facts against patterns and determines
If they want a good resource for their PDA, try www.bitsys.demon.co.uk/download.htm.
This expert system for the palm is a trial version of the ZEN Expert System. The trial
version is free to use but will only operate with the demonstration knowledge base.
Other sites to direct students to include:
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The solution requires a very simple system with a limited number of rules. If students
can’t find expert system software to work with, they can build a primitive system using
spreadsheet software and the =IF function of Excel. Although Excel allows for a limited
Improving Decision Making: Using Intelligent Agents for Comparison Shopping
Software skills: Web browser and shopping bot software
Business skills: Product evaluation and selection
This project will give you experience using shopping bots to search online for products,
find product information, and find the best prices and vendors. Select a digital camera
you might want to purchase, such as the Canon PowerShot S100 or the Olympus Tough
Video Cases
You will find video cases illustrating some of the concepts in this chapter on the Laudon
Collaboration and Teamwork: Rating Enterprise Content Management Systems
With a group of classmates, select two enterprise content management products,
such as those from Open Text, IBM, EMC, or Oracle. Compare their features and
capabilities. To prepare your analysis, use articles from computer magazines and
the Web sites for the knowledge network software vendors. If possible, use
electronic presentation software to present your findings to the class. If possible, use
Google Sites to post links to Web pages, team communication announcements, and
work assignments; to brainstorm; and to work collaboratively on project
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documents. Try to use Google Docs to develop a presentation of your finding for the
class.
Because teams will select different enterprise content management products, no firm
answer can be supplied for this project. Teams will probably visit each vendor’s Web site
Case Study: Knowledge Management and Collaboration at Tata Consulting Services
1. Analyze the knowledge management efforts at Tata Consulting Services (TCS)
using the knowledge management value chain model. Which tools or activities
were used for managing tacit knowledge and which ones are used for explicit
knowledge?
Using the value chain model, the knowledge management efforts at TCS can be
divided into the following activities:
Knowledge Dissemination: Knowledge was disseminated using a variety of
techniques such as Ultimatix – a web based electronic knowledge management portal;
propel sessions that brought together employees with similar interests; Live Meeting
and Knowledge Transition sessions at the project level; and “Tip of the Day” email
comprising technical, conceptual or human skills tips were shared within the
organization daily.
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2. Describe the growth of knowledge management systems at TCS? How have these
systems helped TCS in its business?
The concept of knowledge management (KM) was introduced in TCS in 1995 and a
dedicated KM team called “Corporate Groupware” was formed in 1998. This group
launched the KM-pilot in mid-1999. At that time, KM in TCS covered nearly every
function, from quality assurance to HR management. The employees could access
3. Describe the collaboration tools used at TCS? What benefits did TCS reap from
these tools?
TCS used a variety of collaboration tools – Infinity that includes instant messaging,
IP telephony, and video conferencing; blogs and wikis; IdeaStorm, TIP, and Mysite.
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4. How did Web 2.0 tools help TCS manage knowledge and collaboration among its
employees?
Blogs, wikis, and other tools were used to boost communication and productivity
among the employees. Wikis were used for collaborating on materials related to
project, supporting brainstorming sessions, and developing presentations. Employees
5. How do you think KM tools have changed some key operational processes at
TCS, such as bidding for new projects, project development and
implementation, customer service, and so on?
TCS aims to move up the value chain and to continue to bid for higher-level projects,
beyond those of maintenance and development. By accumulating knowledge, it has
built capabilities to understand how to service clients through consulting and in other
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