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Date: 2008-06-04

Course: EIK 034 Masters Thesis

Authors: Laxmi Rao & Zarina Osmonalieva

Tutor: Ole Liljefors

Title: Which factors facilitate the management of external knowledge?

Introduction: Today more and more organisations are realising that handling internal and external knowledge is a key issue for successful performance. Different theories describe the importance of this topic, for instance, Porter’s Five Forces model and Hedman & Kalling’s General Business Model demonstrate how organizations are strongly influenced by external forces. Hedman & Kalling’s model particularly demonstrates that organizations need to have the competence, capability and resources to effectively manage external knowledge in order to increase their competitiveness and develop and improve their long term survival.

Purpose: Nicholas Carr highlights that for the past decade organizational investment in IT and IS has reached nearly 50% of capital expenditure, while the organizations see little or no performance improvement as a result of this investment. While IT systems are good at storing and retrieving information, the success of the systems heavily relies on the quality of the external and internal knowledge used both during development and usage. A deeper awareness of factors which facilitate the management of external knowledge is relevant to IT managers (indeed all managers) as it will help to facilitate the development and implementation of information systems and technology which are designed to facilitate knowledge management in organisations.

Methodology: In the thesis factors related to effective management of external knowledge are identified and described. The General Business Model was used as a tool to identify and categorize the literature review into key themes.

Conclusions One of the findings is that most published research focuses on factors internal to organizations such as activities and resources and there are few papers dealing with external factors for knowledge management. It was also found that literature which focussed on external factors mainly focused on the role of individuals as resources who cross the boundary of the organization in order to acquire and diffuse the external knowledge. In general the topic of external knowledge management is not studied in a holistic way. The acquisition and diffusion processes have been investigated as separate, but not as the whole process.