Knowledge management and enterprise risk management implementation in financial services

This paper starts from the viewpoint that enterprise risk management is a specific application of knowledge in order to control deviations from strategic objectives, shareholders’ values and stakeholders’ relationships. This study is looking for insights into how the application of knowledge management processes can improve the implementation of enterprise risk management. This article presents the preliminary results of a survey on this topic carried out in the financial services sector, extending a previous pilot study that was in retail banking only. Five hypotheses about the relationship of knowledge management variables to the perceived value of ERM implementation were considered. The survey results show that the two people-related variables, perceived quality of communication among groups and perceived quality of knowledge sharing were positively associated with the perceived value of ERM implementation. However, the results did not support a positive association for the three variables more related to technology, namely network capacity for connecting people (which was marginally significant), risk management information system functionality and perceived integration of the information systems. Perceived quality of communication among groups appeared to be clearly the most significant of these five factors in affecting the perceived value of ERM implementation.

Policy into practice:a study of public policy implementation and the role of learning

Public policy becomes managerial practice through a process of implementation. There is an established literature within Implementation Studies which explains the variables and some of the processes involved in implementation, but less attention has been focused upon how public service managers convert new policy initiatives into practice. The research proposes that managers and their organisations have to go through a process of learning in order to achieve the implementation of public policy. Data was collected over a five year period from four case studies of capital investment appraisal in the British National Health Service. Further data was collected from taped interviews by key actors within the case studies. The findings suggest that managers do learn to implement policy and four factors are important in this learning process. These are; (i) the nature of bureaucratic responsibility; (ii) the motivation of actors towards learning; (iii) the passage of time which allows for the development of competence and (iv) the use of project team structures. The research has demonstrated that the conversion of policy into practice occurs through the operationalisation of solutions to policy problems via job tasks. As such it suggests that in understanding how policy is implemented, technical learning is more important than cultural learning, in this context. In conclusion, a "Model of Learned Implementation" is presented, together with a discussion of some of the implications of the research. These are the possible use of more pilot projects for new policy initiatives and the more systematic diffusion of knowledge about implementation solutions.

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.

Bridging the gap from the general to the specific by linking knowledge management to business process

A phenomenon common to almost all fields is that there is a gap between theory and practical implementation. However, this is a particular problem in knowledge management, where much of the literature consists of general principles written in the context of a ‘knowledge world’ that has few, if any, references to how to carry out knowledge management in organisations. In this chapter, we put forward the view that the best way to bridge this gap between general principles and the specific issues facing a given organisation is to link knowledge management to the organisation’s business processes. After briefly reviewing, and rejecting alternative ways in which this gap might be bridged, the chapter goes on to explain the justification for, and the potential benefits and snags of, linking knowledge management to business processes. Successful and unsuccessful examples are presented. We concentrate especially on the issues of establishing what knowledge is relevant to an organisation at present, the need for organisational learning to cope with the inevitable change, and the additional problems posed by the growing internationalisation of operations. We conclude that linking knowledge management in terms of business processes is the best route for organisations to follow, but that it is not the answer to all knowledge management problems, especially where different cultures and/or cultural change are involved.

Accounting information systems as knowledge objects:some effects of objectualization

This paper will outline a research methodology informed by theorists who have contributed to actor network theory (ANT). Research informed from such a perspective recognizes the constitutive role of accounting systems in the achievement of broader social goals. Latour, Knoor Cetina and others argue that the bringing in of non-human actants, through the growth of technology and science, has added immeasurably to the complexity of modern society. The paper ‘sees’ accounting and accounting systems as being constituted by technological ‘black boxes’ and seeks to discuss two questions. One concerns the processes which surround the establishment of ‘facts’, i.e. how ‘black boxes’ are created or accepted (even if temporarily) within society. The second concerns the role of existing ‘black boxes’ within society and organizations. Accounting systems not only promote a particular view of the activities of an organization or a subunit, but in their very implementation and operation ‘mobilize’ other organizational members in a particular direction. The implications of such an interpretation are explored in this paper. Firstly through a discussion of some of the theoretic constructs that have been proposed to frame ANT research. Secondly an attempt is made to relate some of these ideas to aspects of the empirics in a qualitative case study. The case site is in the health sector and involves the implementation of a casemix accounting system. Evidence from the case research is used to exemplify aspects of the theoretical constructs.

Knowledge management in a New Zealand tree farming company:Ambiguity and resistance to the "technology solution"

Purpose - Managers at the company attempt to implement a knowledge management information system in an attempt to avoid loss of expertise while improving control and efficiency. The paper seeks to explore the implications of the technological solution to employees within the company. Design/methodology/approach - The paper reports qualitative research conducted in a single organization. Evidence is presented in the form of interview extracts. Findings - The case section of the paper presents the accounts of organizational participants. The accounts reveal the workers' reactions to the technology-based system and something of their strategies of resistance to the system. These accounts also provide glimpses of the identity construction engaged in by these knowledge workers. The setting for the research is in a knowledge-intensive primary industry. Research was conducted through observation and interviews. Research limitations/implications - The issues identified are explored in a single case-study setting. Future research could look at the relevance of the findings to other settings. Practical implications - The case evidence presented indicates some of the complexity of implementation of information systems in organizations. This could certainly be seen as more evidence of the uncertainty associated with organizational change and of the need for managers not to expect an easy adoption of intrusive IT solutions. Originality/value - This paper adds empirical insight to a largely conceptual literature. © Emerald Group Publishing Limited.

Communities of implementation

The concept of communities of practice (CoPs) has rapidly gained ground in fields such as knowledge management and organisational learning since it was first identified by Lave and Wenger (1991) and Brown and Duguid (1991). In this article, we consider a related concept that we have entitled “communities of implementation.” Communities of implementation (CoIs) are similar to communities of practice in that they offer an opportunity for a collection of individuals to support each other and share knowledge in a dynamic environment and on a topic in which they share interest. In addition, and to differentiate them from CoPs, a community of implementation extends the responsibilities of a CoP by having as its focus the implementation of a programme of change. This may well extend to designing the change programme. Thus, whereas a main purpose of a CoP is to satisfy “a real need to know what each other knows” (Skyrme, 1999) in an informal way, we argue that a main purpose of a community of implementation is to “pool individual knowledge (including contacts and ways of getting things done) to stimulate collective enthusiasm in order to take more informed purposeful action for which the members are responsible.” Individual and collective responsibility and accountability for successfully implementing the actions/change programme is a key feature of a community of implementation. Without these pressures the members might lower the priority of implementation, allowing competing priorities to dominate their attention and resources. Without responsibility and accountability, the result is likely to be (at best) an organisation which has not begun a change programme, or (at worst) an organisation which is stuck halfway through another failing initiative. To achieve these additional objectives beyond those of a CoP, the CoI needs to provide heightened support to its members. In fact often the members will collectively strategise the development and implementation of the change programme they are leading in the organisation. Other concepts similar to CoPs have appeared in the literature, for example “communities of knowing” (Boland & Tenkasi, 1995), but none have a specific focus on implementation. Perhaps the closest example of a CoI, as suggested by our definition, is reported by Karsten, Lyytinen, Hurskainen, and Koskelainen (2001) who describe a CoP in a paper machinery manufacturer which seems to have the necessary focus on implementation. The theoretical aspects of this article will explore the relationship between CoPs and CoIs, and the needs for different arrangements for a CoI. The practical aspect of this article will consist of a report on a case study of a CoI that was successful in its implementation of a programme of change that aimed to improve its organisation’s knowledge management activities. Over two years the CoI implemented a suite of complementary actions across the organisation. These actions transformed the organisation and moved it towards achieving its ‘core values’ and overall objectives. The article will explore: the activities that formed and gelled the community, the role of the community in the implementation of actions, and experiences from key members of this community on its success and potential improvements.

Knowledge management systems:finding a way with technology

Purpose - To consider the role of technology in knowledge management in organizations, both actual and desired. Design/methodology/approach - Facilitated, computer-supported group workshops were conducted with 78 people from ten different organizations. The objective of each workshop was to review the current state of knowledge management in that organization and develop an action plan for the future. Findings - Only three organizations had adopted a strongly technology-based "solution" to knowledge management problems, and these followed three substantially different routes. There was a clear emphasis on the use of general information technology tools to support knowledge management activities, rather than the use of tools specific to knowledge management. Research limitations/implications - Further research is needed to help organizations make best use of generally available software such as intranets and e-mail for knowledge management. Many issues, especially human, relate to the implementation of any technology. Participation was restricted to organizations that wished to produce an action plan for knowledge management. The findings may therefore represent only "average" organizations, not the very best practice. Practical implications - Each organization must resolve four tensions: Between the quantity and quality of information/knowledge, between centralized and decentralized organization, between head office and organizational knowledge, and between "push" and "pull" processes. Originality/value - Although it is the group rather than an individual that determines what counts as knowledge, hardly any previous studies of knowledge management have collected data in a group context.

Response:Ideas are ten a penny - It's team implementation not idea generation that counts

Cet article présente une synthèse des recherches et théories qui éclairent notre compréhension de la créativité et de la mise en oeuvre de l’innovation dans les groupes de travail. Il semble que la créativité apparaisse essentiellement au cours des premières étapes du processus, avant la mise en oeuvre. On étudie l’influence des caractéristiques de la tâche, des capacités et de l’éventail des connaissances du groupe, des demandes externes, des mécanismes d’intégration et de cohérence de groupe. La perception d’une menace, l’incertitude ou de fortes exigences entravent la créativité, mais favorisent l’innovation. La diversité des connaissances et des capacités est un bon prédicteur de l’innovation, mais l’intégration du groupe et les compétences sont indispensables pour récolter les fruits de la diversité. On examine aussi les implications théoriques et pratiques de ces considérations. In this article I synthesise research and theory that advance our understanding of creativity and innovation implementation in groups at work. It is suggested that creativity occurs primarily at the early stages of innovation processes with innovation implementation later. The influences of task characteristics, group knowledge diversity and skill, external demands, integrating group processes and intragroup safety are explored. Creativity, it is proposed, is hindered whereas perceived threat, uncertainty or other high levels of demands aid the implementation of innovation. Diversity of knowledge and skills is a powerful predictor of innovation, but integrating group processes and competencies are needed to enable the fruits of this diversity to be harvested. The implications for theory and practice are also explored.

Sparkling fountains or stagnant ponds:An integrative model of creativity and innovation implementation in work groups

In this article I synthesise research and theory that advance our understanding of creativity and innovation implementation in groups at work. It is suggested that creativity occurs primarily at the early stages of innovation processes with innovation implementation later. The influences of task characteristics, group knowledge diversity and skill, external demands, integrating group processes and intragroup safety are explored. Creativity, it is proposed, is hindered whereas perceived threat, uncertainty or other high levels of demands aid the implementation of innovation. Diversity of knowledge and skills is a powerful predictor of innovation, but integrating group processes and competencies are needed to enable the fruits of this diversity to be harvested. The implications for theory and practice are also explored.

An investigation of SMEs’ inter-organisational knowledge transfer needs in Internet marketing

Internet marketing, as a key area of e-commerce, plays an important role in SMEs’ e-commerce success. It is the use of Internet technologies in facilitating and supporting marketing activities. Its implementation and success require expert knowledge and extensive experience. SMEs admit that they are willing to embrace Internet marketing to enhance their business competitiveness, but do not know where to start and suffer from a lack of guidance. Evidence suggests that Internet marketing analysis is one of the most needed areas of training in e-commerce for SMEs. It is therefore evident that SMEs need to acquire Internet marketing knowledge from external sources. However, the majority of the literature fails to study what specific knowledge they need and from whom they should acquire the knowledge. This paper has addressed these issues through a questionnaire survey of UK SMEs in the service sector. It identifies SMEs’ specific transfer needs for Internet marketing knowledge, and discusses strategic issues for improving SMEs’ effectiveness of leveraging knowledge.

People, technology, processes and risk knowledge sharing

The present global economic crisis creates doubts about the good use of accumulated experience and knowledge in managing risk in financial services. Typically, risk management practice does not use knowledge management (KM) to improve and to develop new answers to the threats. A key reason is that it is not clear how to break down the “organizational silos” view of risk management (RM) that is commonly taken. As a result, there has been relatively little work on finding the relationships between RM and KM. We have been doing research for the last couple of years on the identification of relationships between these two disciplines. At ECKM 2007 we presented a general review of the literature(s) and some hypotheses for starting research on KM and its relationship to the perceived value of enterprise risk management. This article presents findings based on our preliminary analyses, concentrating on those factors affecting the perceived quality of risk knowledge sharing. These come from a questionnaire survey of RM employees in organisations in the financial services sector, which yielded 121 responses. We have included five explanatory variables for the perceived quality of risk knowledge sharing. These comprised two variables relating to people (organizational capacity for work coordination and perceived quality of communication among groups), one relating to process (perceived quality of risk control) and two related to technology (web channel functionality and RM information system functionality). Our findings so far are that four of these five variables have a significant positive association with the perceived quality of risk knowledge sharing: contrary to expectations, web channel functionality did not have a significant association. Indeed, in some of our exploratory regression studies its coefficient (although not significant) was negative. In stepwise regression, the variable organizational capacity for work coordination accounted for by far the largest part of the variation in the dependent variable perceived quality of risk knowledge sharing. The “people” variables thus appear to have the greatest influence on the perceived quality of risk knowledge sharing, even in a sector that relies heavily on technology and on quantitative approaches to decision making. We have also found similar results with the dependent variable perceived value of Enterprise Risk Management (ERM) implementation.

Introduction: improving manufacturing performance through technology diffusion, implementation and management

The role of technology management in achieving improved manufacturing performance has been receiving increased attention as enterprises are becoming more exposed to competition from around the world. In the modern market for manufactured goods the demand is now for more product variety, better quality, shorter delivery and greater flexibility, while the financial and environmental cost of resources has become an urgent concern to manufacturing managers. This issue of the International Journal of Technology Management addresses the question of how the diffusion, implementation and management of technology can improve the performance of manufacturing industries. The authors come from a large number of different countries and their contributions cover a wide range of topics within this general theme. Some papers are conceptual, others report on research carried out in a range of different industries including steel production, iron founding, electronics, robotics, machinery, precision engineering, metal working and motor manufacture. In some cases they describe situations in specific countries. Several are based on presentations made at the UK Operations Management Association's Sixth International Conference held at Aston University at which the conference theme was 'Achieving Competitive Edge: Getting Ahead Through Technology and People'. The first two papers deal with questions of advanced manufacturing technology implementation and management. Firstly Beatty describes a three year longitudinal field study carried out in ten Canadian manufacturing companies using CADICAM and CIM systems. Her findings relate to speed of implementation, choice of system type, the role of individuals in implementation, organization and job design. This is followed by a paper by Bessant in which he argues that a more a strategic approach should be taken towards the management of technology in the 1990s and beyond. Also considered in this paper are the capabilities necessary in order to deploy advanced manufacturing technology as a strategic resource and the way such capabilities might be developed within the firm. These two papers, which deal largely with the implementation of hardware, are supplemented by Samson and Sohal's contribution in which they argue that a much wider perspective should be adopted based on a new approach to manufacturing strategy formulation. Technology transfer is the topic of the following two papers. Pohlen again takes the case of advanced manufacturing technology and reports on his research which considers the factors contributing to successful realisation of AMT transfer. The paper by Lee then provides a more detailed account of technology transfer in the foundry industry. Using a case study based on a firm which has implemented a number of transferred innovations a model is illustrated in which the 'performance gap' can be identified and closed. The diffusion of technology is addressed in the next two papers. In the first of these, by Lowe and Sim, the managerial technologies of 'Just in Time' and 'Manufacturing Resource Planning' (or MRP 11) are examined. A study is described from which a number of factors are found to influence the adoption process including, rate of diffusion and size. Dahlin then considers the case of a specific item of hardware technology, the industrial robot. Her paper reviews the history of robot diffusion since the early 1960s and then tries to predict how the industry will develop in the future. The following two papers deal with the future of manufacturing in a more general sense. The future implementation of advanced manufacturing technology is the subject explored by de Haan and Peters who describe the results of their Dutch Delphi forecasting study conducted among a panel of experts including scientists, consultants, users and suppliers of AMT. Busby and Fan then consider a type of organisational model, 'the extended manufacturing enterprise', which would represent a distinct alternative pure market-led and command structures by exploiting the shared knowledge of suppliers and customers. The three country-based papers consider some strategic issues relating manufacturing technology. In a paper based on investigations conducted in China He, Liff and Steward report their findings from strategy analyses carried out in the steel and watch industries with a view to assessing technology needs and organizational change requirements. This is followed by Tang and Nam's paper which examines the case of machinery industry in Korea and its emerging importance as a key sector in the Korean economy. In his paper which focuses on Venezuela, Ernst then considers the particular problem of how this country can address the problem of falling oil revenues. He sees manufacturing as being an important contributor to Venezuela's future economy and proposes a means whereby government and private enterprise can co-operate in development of the manufacturing sector. The last six papers all deal with specific topics relating to the management manufacturing. Firstly Youssef looks at the question of manufacturing flexibility, introducing and testing a conceptual model that relates computer based technologies flexibility. Dangerfield's paper which follows is based on research conducted in the steel industry. He considers the question of scale and proposes a modelling approach determining the plant configuration necessary to meet market demand. Engstrom presents the results of a detailed investigation into the need for reorganising material flow where group assembly of products has been adopted. Sherwood, Guerrier and Dale then report the findings of a study into the effectiveness of Quality Circle implementation. Stillwagon and Burns, consider how manufacturing competitiveness can be improved individual firms by describing how the application of 'human performance engineering' can be used to motivate individual performance as well as to integrate organizational goals. Finally Sohal, Lewis and Samson describe, using a case study example, how just-in-time control can be applied within the context of computer numerically controlled flexible machining lines. The papers in this issue of the International Journal of Technology Management cover a wide range of topics relating to the general question of improving manufacturing performance through the dissemination, implementation and management of technology. Although they differ markedly in content and approach, they have the collective aim addressing the concepts, principles and practices which provide a better understanding the technology of manufacturing and assist in achieving and maintaining a competitive edge.

The board of directors, executives and risk knowledge management

Enterprise Risk Management (ERM) and Knowledge Management (KM) both encompass top-down and bottom-up approaches developing and embedding risk knowledge concepts and processes in strategy, policies, risk appetite definition, the decision-making process and business processes. The capacity to transfer risk knowledge affects all stakeholders and understanding of the risk knowledge about the enterprise's value is a key requirement in order to identify protection strategies for business sustainability. There are various factors that affect this capacity for transferring and understanding. Previous work has established that there is a difference between the influence of KM variables on Risk Control and on the perceived value of ERM. Communication among groups appears as a significant variable in improving Risk Control but only as a weak factor in improving the perceived value of ERM. However, the ERM mandate requires for its implementation a clear understanding, of risk management (RM) policies, actions and results, and the use of the integral view of RM as a governance and compliance program to support the value driven management of the organization. Furthermore, ERM implementation demands better capabilities for unification of the criteria of risk analysis, alignment of policies and protection guidelines across the organization. These capabilities can be affected by risk knowledge sharing between the RM group and the Board of Directors and other executives in the organization. This research presents an exploratory analysis of risk knowledge transfer variables used in risk management practice. A survey to risk management executives from 65 firms in various industries was undertaken and 108 answers were analyzed. Potential relationships among the variables are investigated using descriptive statistics and multivariate statistical models. The level of understanding of risk management policies and reports by the board is related to the quality of the flow of communication in the firm and perceived level of integration of the risk policy in the business processes.