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Chapter 11
Managing Knowledge
Student 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
how do they provide value for businesses?
3. What are the major types of knowledge work systems and how do they provide value
for firms?
4. What are the business benefits of using intelligent techniques for knowledge
management?
Learning Catalytics is a “bring your own device” student engagement, assessment, and
classroom intelligence system. It allows instructors to engage students in class with real-
Key Terms
The following alphabetical list identifies the key terms discussed in this chapter. The
page number for each key term is provided.
3D printing, 439
Intelligent agents, 453
Agent-based modeling, 454
Intelligent techniques, 435
Artificial intelligence (AI), 443
Investment workstations, 442
Augmented reality (AR), 442
Knowledge, 430
Backward chaining, 445
Knowledge base, 444
Case-based reasoning (CBR), 446
Knowledge discovery, 443
Communities of practice (COPs), 434
Knowledge management, 431
Computer-aided design (CAD), 439
Knowledge work systems (KWS), 435
Data, 430
Learning management system (LMS), 437
Digital asset management systems, 437
Machine learning, 448
Enterprise content management systems, 435
Massive open online courses (MOOCs), 437
systems, 434
Explicit knowledge, 430
Structured knowledge, 435
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Forward chaining, 444
Tacit knowledge, 430
Fuzzy logic, 446
Taxonomy, 436
Genetic algorithms, 450
Virtual Reality Modeling Language (VRML), 442
Hybrid AI systems, 455
Virtual reality systems, 439
Inference engine, 444
Wisdom, 430
Teaching Suggestions
The opening case, “Jaguar Land Rover (JLR) Transforms with New Design and
Manufacturing Technology,” demonstrates how an organization can improve its business
performance by organizing knowledge more efficiently. Tata Motors merged two
JLR provides cutting-edge technologies to its designers, engineers, and production
specialists that include computer-aided design (CAD), computer-aided manufacturing
(CAM), and computer aided engineering systems (CAE). That helps reduce the time and
The systems also take advantage of live 3D digital models and product simulations
including 3D digital factor overviews. The software reduces errors by providing more
Section 11.1, What is the role of knowledge management and knowledge management
programs in business? Most students don’t think about the differences among 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
Section 11.2, What types of systems are used for enterprise-wide knowledge
management and how do they provide value for businesses? 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
Most students are familiar with and have used blogs, wikis, and social bookmarking
technologies in their personal lives. However, students may be surprised to learn that they
are becoming powerful tools for business collaboration. These tools are easy to install,
often not requiring any IT staff support. They help capture, consolidate, and centralize
Section 11.3 What are the major types of knowledge work systems and how do they
provide value for firms? Spend a few minutes discussing knowledge assets and
knowledge management. Ask your students to discuss how companies such as Microsoft,
Dell, Toyota, or Staples might manage their knowledge assets. Going over the examples
Interactive Session: Technology: Is 3D Printing a Game-Changer?
Case Study Questions
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1. Describe the technologies used in 3D printing. How does 3D printing differ from
CAD?
3D printing is a process for making three dimensional solid objects from a digital file.
Objects are created by laying down successive layers of materials which are seen as
2. What are the advantages and disadvantages of using 3D printing?
Advantages of using 3D printing versus more traditional object creation are:
• Individual replacement parts for products can be produced one-at-a-time
rather than mass-producing parts that may or may not be needed in the future.
Disadvantages of using 3D printing include:
• Mass producing products is slower and in some instances more expensive than
using traditional processes.
3. What kinds of businesses are most likely to benefit from 3D printing? Why?
Give two examples.
Businesses who want to produce small products on a limited production basis can use
3D printing to make the objects. It may be much less expensive to use 3D printing
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4. How could 3D printing impact companies’ supply chains and business models?
It may become necessary for some companies to adjust their supply chains when 3D
printing becomes more prevalent and cheaper. Mass production, storage, and shipping
Section 11.4, “What are the business benefits of using intelligent techniques for
knowledge management? 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
Interactive Session: Organizations: Facial Recognition Systems: Another Threat to
Privacy?
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Case Study Questions
1. What are some of the benefits of using facial recognition technology? Describe
some current and future applications of this technology?
Facial recognition technology can be used to verify identities and reduce abuse of
false identification methods and identity theft. The Oregon Department of Motor
Vehicles used facial recognition software to ensure that driver licenses, instruction
permits, and ID cards are not issued under false names. Police departments use facial
2. How does facial recognition technology threaten the protection of individual
privacy? Give several examples?
The ability to instantly analyze an individual’s facial expressions to detect moods or
inner feelings may be a real threat to individual privacy, especially if the person does
not want to reveal their feelings, moods, or thoughts.
3. Would you like DeepFace to track your activities on Facebook and in the
physical world? Why or why not?
Student answers and opinions will vary. Some students may not be concerned at all
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Review Questions
11-1 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 firm’s knowledge.
Knowledge management promotes organizational learning and incorporates
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.
• Knowledge has different forms: can be either tacit or explicit; involves
know-how, craft, and skill; involves knowing how to follow procedures;
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.
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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
11-2 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.
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,
storing both structured and unstructured data, and locating employee expertise
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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 such as news feeds
11-3 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
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KWS must have adequate computing power to handle the specialized tasks and
complex calculations, provide easy access to external databases to support research,
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.
• Virtual reality systems have visualization, rendering, and simulation
capabilities. This type of system uses interactive graphics software to create
11-4 What are the business benefits of using intelligent techniques for knowledge
management?
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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
knowledge of skilled employees in the form of a set of rules in a software system that
can be used by others in the organization.
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
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,
like a human being, can recognize patterns in data and change its behavior based on
its recognition of patterns, experience, or prior knowledge.
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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
been collected. They find patterns and relationships in massive amounts of data that
would be too complicated and difficult for a human being to analyze. Neural
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
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Discussion Questions
11-5 Knowledge management is a business process, not a technology. Discuss.
Student answers to this question will vary.
11-6 Describe various ways that knowledge management systems could help firms
with sales and marketing or with manufacturing and production.
Student answers to this question will vary.
11-7 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.
Student answers to this question will vary.
Hands-On MIS Projects
Management Decision Problems
11-8 U.S. Pharma Corporation: Headquartered in New Jersey the company has
research sites in Germany, France, the United Kingdom, Switzerland, and Australia.
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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
11-9 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
was using daily mailings and thick product catalogs to inform its dealers about new
products, merchandise setups, best practices, product ordering, and problem
resolution. It is looking for a better way to provide employees with human resources
and administrative documents. Describe the problems created by doing business this
way and how knowledge management systems might help.
First, the company is wasting dollars and time by using offline mailings and paper
Improving Decision Making: Building a Simple Expert System for Retirement
Planning
Software skills: Spreadsheet formulas and IF-THEN function or expert system tool
Business skills: Benefits eligibility determination
11-10 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.
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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
which rules are applicable.
Remind them about what “rules” the expert system is looking for: The “if” portion of a
rule can actually be thought of as the “whenever” portion of a rule because pattern
matching always occurs whenever changes are made to facts. The “then” portion of a rule
• PC AI—Expert systems resources
www.pcai.com/pcai/New_Home_Page/ai_info/expert_systems.html
This site hosts a brief introduction to expert systems and an extensive collection
of links to expert system Web sites, vendors, articles, and references.
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
Improving Decision Making: Using Intelligent Agents for Comparison Shopping
Software skills: Web browser and shopping bot software
Business skills: Product evaluation and selection
11-11 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 TG-820. Visit MySimon (www.mysimon.com), BizRate.com (www.bizrate.com),
and Google Product Search to do price comparisons for your purchase. Evaluate these
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shopping sites in terms of their ease of use, number of offerings, speed in obtaining
information, thoroughness of information offered about the product and seller, and price
selection. Which site or sites would you use and why? Which camera would you select
and why? How helpful were these sites for making your decision?
Answers will vary on which camera to purchase. The point of the question is for students
to explore the idea of using bots to help them navigate all of the various sites and gather
Collaboration and Teamwork Project
11-12. In MyMISLab, you will find a Collaboration and Teamwork Project dealing
with the concepts in this chapter. You will be able to use Google Drive, Google Docs,
Google Sites, Google +, or other open source collaboration tools to complete the
assignment.
Case Study: IBM’s Watson: Can Computers Replace Humans?
Case Study Questions
11-13 How powerful is Watson? Describe its technology. Why does it require so
much powerful hardware?
The hardware required for Watson to work so quickly and accurately was
staggeringly powerful. Watson consists of 10 racks of IBM POWER 750 servers
running Linux, uses 15 terabytes of RAM and 2,880 processor cores (equivalent to
6,000 top-end home computers), and operates at 80 teraflops. Watson needed this
amount of power to quickly scan its enormous database of information, including
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IBM is moving many of Watson’s capabilities to the Internet through cloud services
that many different businesses and industries will use. Examples of the services
include:
• Developer Cloud: tools and methodologies for developers to work with a
Three new cloud-based products will be available that use Watson’s cognitive
intelligence and capabilities:
• Discovery Advisor: aimed at pharmaceutical, publishing, and education
industries.
11-14 How “intelligent” is Watson? What can it do? What can’t it do?
Watson learns from its mistakes and successes, much as humans do, through machine
learning. Algorithms programmed into its memory evaluate the language used,
gathers information and generates hundreds of solutions. If a certain algorithm works
11-15 What kinds of problems is Watson able to solve? How useful a tool is it for
knowledge management and decision making?
Future applications for Watson are numerous and wide-ranging in medicine, financial
services, or any industry where sifting through large amounts of data (including
unstructured data) to answer questions is important.
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It’s unclear how effective Watson will be in the medical fields where information
available in medical journals and other sources is highly disorganized, often
contradictory, and littered with typos and inconsistent naming conventions. When
11-16 Do you think Watson will be as useful in other disciplines as IBM hopes? Will
it be beneficial to everyone? Explain your answer.
IBM hopes to use Watson in medicine, financial services, or any industry where
sifting through large amounts of data to answer questions is important. WellPoint
Inc., a health insurer, uses Watson to help it choose among treatment options and
11-17 How do each of the following types of systems acquire and represents
knowledge: expert system, case-based reasoning, neural network?
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Visit MyMISLab for suggested answers.
11-18 How do enterprise content management systems help organizations manage
structured and semistructured knowledge? What are two examples of each type of
knowledge handled by these systems?
Visit MyMISLab for suggested answers.
For an example illustrating the concepts found in this chapter, view the
videos in mymislab.com.