Knowledge management applied to enterprise risk management

Risk and knowledge are two concepts and components of business management which have so far been studied almost independently. This is especially true where risk management (RM) is conceived mainly in financial terms, as for example, in the financial institutions sector. Financial institutions are affected by internal and external changes with the consequent accommodation to new business models, new regulations and new global competition that includes new big players. These changes induce financial institutions to develop different methodologies for managing risk, such as the enterprise risk management (ERM) approach, in order to adopt a holistic view of risk management and, consequently, to deal with different types of risk, levels of risk appetite, and policies in risk management. However, the methodologies for analysing risk do not explicitly include knowledge management (KM). This research examines the potential relationships between KM and two RM concepts: perceived quality of risk control and perceived value of ERM. To fulfill the objective of identifying how KM concepts can have a positive influence on some RM concepts, a literature review of KM and its processes and RM and its processes was performed. From this literature review eight hypotheses were analysed using a classification into people, process and technology variables. The data for this research was gathered from a survey applied to risk management employees in financial institutions and 121 answers were analysed. The analysis of the data was based on multivariate techniques, more specifically stepwise regression analysis. The results showed that the perceived quality of risk control is significantly associated with the variables: perceived quality of risk knowledge sharing, perceived quality of communication among people, web channel functionality, and risk management information system functionality. However, the relationships of the KM variables to the perceived value of ERM are not identified because of the low performance of the models describing these relationships. The analysis reveals important insights into the potential KM support to RM such as: the better adoption of KM people and technology actions, the better the perceived quality of risk control. Equally, the results suggest that the quality of risk control and the benefits of ERM follow different patterns given that there is no correlation between both concepts and the distinct influence of the KM variables in each concept. The ERM scenario is different from that of risk control because ERM, as an answer to RM failures and adaptation to new regulation in financial institutions, has led organizations to adopt new processes, technologies, and governance models. Thus, the search for factors influencing the perceived value of ERM implementation needs additional analysis because what is improved in RM processes individually is not having the same effect on the perceived value of ERM. Based on these model results and the literature review the basis of the ERKMAS (Enterprise Risk Knowledge Management System) is presented.

Organisational learning - a critical systems thinking discipline

Original Paper European Journal of Information Systems (2001) 10, 135–146; doi:10.1057/palgrave.ejis.3000394 Organisational learning—a critical systems thinking discipline P Panagiotidis1,3 and J S Edwards2,4 1Deloitte and Touche, Athens, Greece 2Aston Business School, Aston University, Aston Triangle, Birmingham, B4 7ET, UK Correspondence: Dr J S Edwards, Aston Business School, Aston University, Aston Triangle, Birmingham, B4 7ET, UK. E-mail: j.s.edwards@aston.ac.uk 3Petros Panagiotidis is Manager responsible for the Process and Systems Integrity Services of Deloitte and Touche in Athens, Greece. He has a BSc in Business Administration and an MSc in Management Information Systems from Western International University, Phoenix, Arizona, USA; an MSc in Business Systems Analysis and Design from City University, London, UK; and a PhD degree from Aston University, Birmingham, UK. His doctorate was in Business Systems Analysis and Design. His principal interests now are in the ERP/DSS field, where he serves as project leader and project risk managment leader in the implementation of SAP and JD Edwards/Cognos in various major clients in the telecommunications and manufacturing sectors. In addition, he is responsible for the development and application of knowledge management systems and activity-based costing systems. 4John S Edwards is Senior Lecturer in Operational Research and Systems at Aston Business School, Birmingham, UK. He holds MA and PhD degrees (in mathematics and operational research respectively) from Cambridge University. His principal research interests are in knowledge management and decision support, especially methods and processes for system development. He has written more than 30 research papers on these topics, and two books, Building Knowledge-based Systems and Decision Making with Computers, both published by Pitman. Current research work includes the effect of scale of operations on knowledge management, interfacing expert systems with simulation models, process modelling in law and legal services, and a study of the use of artifical intelligence techniques in management accounting. Top of pageAbstract This paper deals with the application of critical systems thinking in the domain of organisational learning and knowledge management. Its viewpoint is that deep organisational learning only takes place when the business systems' stakeholders reflect on their actions and thus inquire about their purpose(s) in relation to the business system and the other stakeholders they perceive to exist. This is done by reflecting both on the sources of motivation and/or deception that are contained in their purpose, and also on the sources of collective motivation and/or deception that are contained in the business system's purpose. The development of an organisational information system that captures, manages and institutionalises meaningful information—a knowledge management system—cannot be separated from organisational learning practices, since it should be the result of these very practices. Although Senge's five disciplines provide a useful starting-point in looking at organisational learning, we argue for a critical systems approach, instead of an uncritical Systems Dynamics one that concentrates only on the organisational learning practices. We proceed to outline a methodology called Business Systems Purpose Analysis (BSPA) that offers a participatory structure for team and organisational learning, upon which the stakeholders can take legitimate action that is based on the force of the better argument. In addition, the organisational learning process in BSPA leads to the development of an intrinsically motivated information organisational system that allows for the institutionalisation of the learning process itself in the form of an organisational knowledge management system. This could be a specific application, or something as wide-ranging as an Enterprise Resource Planning (ERP) implementation. Examples of the use of BSPA in two ERP implementations are presented.

The interaction between master production scheduling and detailed capacity requirements planning : closing the loop in manufacturing resource planning (MRPII) systems

The widespread implementation of Manufacturing Resource Planning (MRPII) systems in this country and abroad and the reported dissatisfaction with their use formed the initial basis of this piece of research which concentrates on the fundamental theory and design of the Closed Loop MRPII system itself. The dissertation concentrates on two key aspects namely; how Master Production Scheduling is carried out in differing business environments and how well the `closing of the loop' operates by checking the capcity requirements of the different levels of plans within an organisation. The main hypothesis which is tested is that in U.K. manufacturing industry, resource checks are either not being carried out satisfactorily or they are not being fed back to the appropriate plan in a timely fashion. The research methodology employed involved initial detailed investigations into Master Scheduling and capacity planning in eight diverse manufacturing companies. This was followed by a nationwide survey of users in 349 companies, a survey of all the major suppliers of Production Management software in the U.K. and an analysis of the facilities offered by current software packages. The main conclusion which is drawn is that the hypothesis is proved in the majority of companies in that only just over 50% of companies are attempting Resource and Capacity Planning and only 20% are successfully feeding back CRP information to `close the loop'. Various causative factors are put forward and remedies are suggested.

The discretionary role of the line manager in inspiring work engagement and innovative behaviour:a study of social exchange and job resources in the public sector

This thesis is about the discretionary role of the line manager in inspiring the work engagement of staff and their resulting innovative behaviour examined through the lens of Social Exchange Theory (Blau, 1964) and the Job Demands-Resources theory (Bakker, Demerouti, Nachreiner & Schaufeli, 2001). The study is focused on a large British Public Sector organisation undergoing a major organisational shift in the way in which they operate as part of the public sector. It is often claimed that people do not leave organisations; they leave line managers (Kozlowski & Doherty, 1989). Regardless of the knowledge in the literature concerning the importance of the line manager in organisations (Purcell, 2003), the engagement literature in particular is lacking in the consideration of such a fundamental figure in organisational life. Further, the understanding of the black box of managerial discretion and its relationship to employee and organisation related outcomes would benefit from greater exploration (Purcell, 2003; Gerhart, 2005; Scott, et al, 2009). The purpose of this research is to address these gaps with relation to the innovative behaviour of employees in the public sector – an area that is not typically associated with the public sector (Bhatta, 2003; McGuire, Stoner & Mylona, 2008; Hughes, Moore & Kataria, 2011). The study is a CASE Award PhD thesis, requiring academic and practical elements to the research. The study is of one case organisation, focusing on one service characterised by a high level of adoption of Strategic Human Resource Management activities and operating in a rather unique manner for the public sector, having private sector competition for work. The study involved a mixed methods approach to data collection. Preliminary focus groups with 45 participants were conducted, followed by an ethnographic period of five months embedded into the service conducting interviews and observations. This culminated in a quantitative survey delivered within the wider directorate to approximately 500 staff members. The study used aspects of the Grounded Theory (Glaser & Strauss, 1967) approach to analyse the data and developed results that highlight the importance of the line manager in an area characterised by SHRM and organisational change for engaging employees and encouraging innovative behaviour. This survey was completed on behalf of the organisation and the findings of this are presented in appendix 1, in order to keep the focus of the PhD on theory development. Implications for theory and practice are discussed alongside the core finding. Line managers’ discretion surrounding the provision of job resources (in particular trust, autonomy and implementation and interpretation of combined bundles of SHRM policies and procedures) influenced the exchange process by which employees responded with work engagement and innovative behaviour. Limitations to the research are the limitations commonly attributed to cross-sectional data collection methods and those surrounding generalisability of the qualitative findings outside of the contextual factors characterising the service area. Suggestions for future research involve addressing these limitations and further exploration of the discretionary role with regards to extending our understanding of line manager discretion.

Managing projects in fast track:a case of public sector organisation in India

Completing projects faster than the normal duration is always a challenge to the management of any project, as it often demands many paradigm shifts. Opportunities of globalization, competition from private sectors and multinationals force the management of public sector organizations in the Indian petroleum sector to take various aggressive strategies to maintain their profitability. Constructing infrastructure for handling petroleum products is one of them. Moreover, these projects are required to be completed in faster duration compared to normal schedules to remain competitive, to get faster return on investment, and to give longer project life. However, using conventional tools and techniques of project management, it is impossible to handle the problem of reducing the project duration from a normal period. This study proposes the use of concurrent engineering in managing projects for radically reducing project duration. The phases of the project are accomplished concurrently/simultaneously instead of in a series. The complexities that arise in managing projects are tackled through restructuring project organization, improving management commitment, strengthening project-planning activities, ensuring project quality, managing project risk objectively and integrating project activities through management information systems. These would not only ensure completion of projects in fast track, but also improve project effectiveness in terms of quality, cost effectiveness, team building, etc. and in turn overall productivity of the project organization would improve.

Linking design and manufacturing domains via web-based and enterprise integration technologies

The manufacturing industry faces many challenges such as reducing time-to-market and cutting costs. In order to meet these increasing demands, effective methods are need to support the early product development stages by bridging the gap of communicating early design ideas and the evaluation of manufacturing performance. This paper introduces methods of linking design and manufacturing domains using disparate technologies. The combined technologies include knowledge management supporting for product lifecycle management systems, Enterprise Resource Planning (ERP) systems, aggregate process planning systems, workflow management and data exchange formats. A case study has been used to demonstrate the use of these technologies, illustrated by adding manufacturing knowledge to generate alternative early process plan which are in turn used by an ERP system to obtain and optimise a rough-cut capacity plan. Copyright © 2010 Inderscience Enterprises Ltd.

Knowledge management in support of enterprise risk management

Risk management and knowledge management have so far been studied almost independently. The evolution of risk management to the holistic view of Enterprise Risk Management requires the destruction of barriers between organizational silos and the exchange and application of knowledge from different risk management areas. However, knowledge management has received little or no attention in risk management. This paper examines possible relationships between knowledge management constructs related to knowledge sharing, and two risk management concepts: perceived quality of risk control and perceived value of enterprise risk management. From a literature review, relationships with eight knowledge management variables covering people, process and technology aspects were hypothesised. A survey was administered to risk management employees in financial institutions. The results showed that the perceived quality of risk control is significantly associated with four knowledge management variables: perceived quality of risk knowledge sharing, perceived quality of communication among people, web channel functionality, and risk management information system functionality. However, the relationships of the knowledge management variables to the perceived value of enterprise risk management are not significant. We conclude that better knowledge management is associated with better risk control, but that more effort needs to be made to break down organizational silos in order to support true Enterprise Risk Management.

Enterprise management and ERP development:case study of Zoomlion using dynamic enterprise reference grid

The enterprise management approach provides a holistic view of organizations and their related information systems. In order to cope with the globalization, virtualization, and volatile competitive environment, traditional firms are seeking to reconstruct their organizational structures and establish new IS architectures to transform from single autonomous entities into more open enterprises supported by new Enterprise Resource Planning (ERP) systems. This paper reports on ERP engage-abilities within three different enterprise management patterns based on the theoretical foundations of the "Dynamic Enterprise Reference Grid". An exploratory inductive study in Zoomlion using the narrative research approach has been conducted. Also, this research delivers a conceptual framework to demonstrate the adoption of ERP in the three enterprise management structures and points to a new architectural type (ERPIII) for operating in the virtual enterprise paradigm. © 2010 Springer-Verlag.

Knowledge management in the energy sector:review and future directions

Purpose – The purpose of this paper is to examine the state of knowledge management (KM) in the energy sector and more broadly, and consider future directions for research and practice. Design/methodology/approach – The paper reviews the literature on KM and the practice of KM as relevant to the energy sector. Findings – There are many examples of good practice in KM in the sector, and some organisations, especially in the oil industry, are seen as leaders in KM practice. However, other organisations have yet to embark on explicit KM initiatives or projects at all. In addition, some parts of the energy sector discuss KM without any reference to the more general KM literature. Originality/value – Although some parts of the energy sector have justifiably earned a good reputation for KM, other parts are completely unaware of the field, as is apparent from the literature. This review helps to raise awareness and guide future work.

Proposing a systems vision of knowledge management in emergency care

This paper makes a case for taking a systems view of knowledge management within health-care provision, concentrating on the emergency care process in the UK National Health Service. It draws upon research in two casestudy organizations (a hospital and an ambulance service). The case-study organizations appear to be approaching knowledge (and information) management in a somewhat fragmented way. They are trying to think more holistically, but (perhaps) because of the ways their organizations and their work are structured, they cannot ‘see’ the whole of the care process. The paper explores the complexity of knowledge management in emergency health care and draws the distinction for knowledge management between managing local and operational knowledge, and global and clinical knowledge.

Intelligence agents (knowledge management)

Reports some insights into knowledge management (KM) derived from UK one-day workshops with six businesses, three non-profits and one public sector organization. Lists the four questions posed to participants and discusses the themes which emerged, e.g. the need for a KM strategy to make raw information more useable, KM performance measurement etc. Stresses the need for commitment from a top-level champion and a wide range of employees to make this work and identifies three types of solutions for improving KM strategy: technological (e.g. databases and intranets), people (e.g. motivation, retention, training and networking) and processes (e.g. procedural instructions and balancing formal/informal knowledge sharing methods). Finds that accountants and senior managers do not generally see KM as very important but argues that management accountants are suitable knowledge champions who could develop explicit links between KM and organizational performance.