Read the following case study on knowledge management in the banking industry and then answer the questions that follow:

Extracts from Knowledge-management practices at selected banks in South Africa By Joel Chigada and Patrick Ngulube

This study focused on investigating the knowledge-management practices at selected banks in South Africa. The objective was to establish the extent to which selected banks had implemented knowledge-management practices such as the acquisition, sharing and retention of knowledge.

Knowledge sharing occurs during induction (of new employees) or when employees quit the organisation. Knowledgeable and experienced employees who possess knowledge should be willing to share it. Knowledge shared by individuals and by a community of practice becomes organisational knowledge.

The banking customers ever-changing tastes and preferences require banks to proactively improvise products, exit projects and product lines that can drag down the business and engage in others that maximise the growth potential as radical market shifts threaten to put the banks business with the wrong product. By rapidly exploiting and applying fragmented internal and external knowledge, a bank can reliably detect emerging windows of opportunity before competition takes the market by surprise.

Management needs to put in place strategies for retaining organisational knowledge before it is lost. The knowledge and expertise of employees should be retained before they leave the organisation. In the absence of knowledge retention strategies, organisations lose tacit knowledge when employees leave for other organisations or due to other forms of attrition.

To safeguard against a loss of knowledge, organisations need to devise ways of retaining employees know-how and best practices so that knowledge can be passed on to future workers, and replacements who should regain the on-the-job knowledge that ex-employees spent years accumulating.

Knowledge can be retained in an organisation through various strategies that may involve education, training, establishing communities of practice and professional networks, documenting the processes and using advanced technology to capture work processes. This knowledge has to be captured and stored in databases, documents, software and processes, products and services.

The human-resources management function of the banks plays a significant role to coordinate planning programmes for training and development as well as induction and succession. For these elements to work together, the prevailing organisational culture, as enabler of KM, helps to facilitate synergy between the KM practices. The absence of documents to indicate the progress on implementing KM practices could possibly explain why he cultures prevailing at the selected banks were not in favour of knowledge retention. In the event of the loss of key staff in these banks, management would have to revert to contingency measures to mitigate the loss in tacit knowledge.

Externalisation: It refers to the process of articulating tacit knowledge in the form of explicit concepts such as metaphors and analogies (Nonaka & Takeuchi 1995). The study established that selected banks use automated processes as well as manual systems to externalise tacit knowledge into paper records (organisational memory and archival repositories) that are accessed by the employees for use (codification).

Externalisation (interacting ba) in the selected banks is expressed through the building and management of a collection of knowledge that comes in a variety of formats and their associated technology (Nemani 2010). In the case of FNB, innovative teams excel in bringing new services or products on board whilst, at Nedbank, externalisation is triggered by dialogue, regular formal meetings and brainstorming sessions (dashikai).

Internalisation: It is the process of converting explicit knowledge to tacit knowledge and is closely related to learning by doing (Nonaka & Takeuchi 1995). In this study, archives and procedure manuals were identified as sources of technical knowledge that were acquired by employees and then used to solve some work-related problems. The card divisions of selected banks refer to merchant profiles to determine the levels of fraudulent transactions, merchant transactions and other queries. Innovation by bank staff who work in a modern information environment is subsequently reflected in the enhanced quality of service and innovative products provided.

The study established that a culture that promotes the creation of new knowledge in the organisation is vital because this allows organisations to create new knowledge from shared and existing knowledge repositories. The new knowledge must be preserved and retained as

knowledge assets in appropriate media. Albers (2009) states that an ideal knowledge- management culture is characterised by trust, openness, teamwork, collaboration, risk taking,

common language, courage and learning. Stankosky (2005) states that people are rewarded and recognised for individual achievements, sharing knowledge and contributing to teamwork. This is possible in an environment where the culture of knowledge sharing is a common practice. The implication of a lack of open-mindedness concerning KM practices is that any attempt by the banks to encourage these KM features would be fruitless if they are not a part of the banks knowledge sharing culture. It would not even matter if there were no proper IT platform to share information. It was established that reward systems could be used to create re-usable knowledge resources. Contributing towards a collection of re-usable knowledge resources, knowledge capture could, if put in place, start happening in a formal way.

Knowledge portals become effective KM enablers if the systems are aligned to organisational KM policies. The study established that FNBs IT department is tasked to manage knowledge-related issues to reduce the cost of information publishing and distribution; to increase compliance with corporate standards, rules and processes for information storage and dissemination; to automate business processes such as price-quote generation or lead and forecast sharing and to preserve and leverage prior investments in back-end document management, enterprise resource planning (ERP) and data-warehousing systems.

One observation was that expert systems are used by organisations to acquire knowledge from experienced individuals before the expiry of that knowledge. Though the selected banks have platforms for the acquisition, creation, sharing and retention of knowledge, it was noted that some of the KM practices do not provide employees with opportunities for asking questions or making suggestions.

Note: In your answers, you will be awarded more marks for integrating the theory and facts from the case study than if you discuss them separately.

Questions-

Q.2.4 Assess the drivers of knowledge management for South African banks from the case study.

Q.2.5 Analyse the knowledge management-sub-processes related to knowledge capture with application to the case study.