Competitive Intelligence and Knowledge Management: A study of enhancing the employees´ motivation to sharing their knowledge
©2015
Textbook
83 Pages
Summary
Companies which are active in Competitive Intelligence (CI) face the problem of accessing the employees´ knowledge for specific inquiries. Most of the knowledge and of the intelligence already exists within the company – however, it is not available for the CI-department. This study finds a solution for the problem by taking a view on the inner organization of CI- and knowledge management. It creates a reference framework of strategic knowledge management called the “Knowledge House” and gives the employees a context they can orientate towards. The objective is to actively anchor the strategic cultivation of knowledge in the company which promotes knowledge sharing. Beyond this strategic approach, knowledge sharing from the employees´ view is outlined. In addition, it is also outlined what preconditions – which go beyond the organizations´ influence – have to be set to make the employees work in a knowledge sharing- promoting environment.
Excerpt
Table Of Contents
Executive Summary
Companies which are active in Competitive Intelligence (CI) face the problem of
accessing the employees´ knowledge for specific inquiries. Most of the knowledge and
of the intelligence already exists within the company however, it is not available for
the CI-department.
This master thesis finds a solution for the problem by taking a view on the inner
organization of CI- and knowledge management. It creates a reference framework of
strategic knowledge management called the "Knowledge House" and gives the
employees a context they can orientate towards. The objective is to actively anchor the
strategic cultivation of knowledge in the company which promotes knowledge sharing.
Beyond this strategic approach, knowledge sharing from the employees´ view is
outlined. In addition, it is also outlined what preconditions which go beyond the
organizations´ influence have to be set to make the employees work in a knowledge-
sharing-promoting environment.
For better readability, just one gender-specific term is used. Of course, also the other
genders are addressed as well.
4
List of abbreviations
B.C.
Before Christ
BCG
Boston Consulting Group
CI
Competitive Intelligence
GE
General Electric
HUMINT
Human Intelligence Network
i.e.
Id est
ICT
Information and Communication Technology
KIT
Key Intelligence Topics
KM
Knowledge Management
R&D
Research and Development
SCIP
Strategic and Competitive Intelligence Professionals
STEEP
Sociological, Technological, Economical, Environmental and Political
Change
5
List of figures
Figure 1 Thesis overview
... 12
Figure 2 An Intelligence System in Operation
... 18
Figure 3 Intelligence Pyramid
... 20
Figure 4 Possible categorizing of information sources
... 24
Figure 5 Onion-principle for CI-research
... 24
Figure 6 Sources of information in a CI-report
... 26
Figure 7 Hierarchy of Intelligence Reports
... 28
Figure 8 CI-cycle which is based upon the KM-segments of Probst et al. (2010)
... 31
Figure 9 Knowledge Staircase
... 34
Figure 10 Two types of knowledge
... 36
Figure 11 Reference framework of a strategic knowledge management
... 37
Figure 12 Scope of knowledge objectives
... 40
Figure 13 Knowledge environment
... 44
Figure 14 System of knowledge strategies
... 45
Figure 15 Phases of knowledge transfer
... 47
Figure 16 Possibilities of tacit and explicit knowledge transfer
... 48
Figure 17 Overview of KM-supporting organizational structures
... 52
Figure 18 The Knowledge House
... 53
Figure 19 Dynamic of motivation
... 58
Figure 20 Paradoxes in association with knowledge
... 62
Figure 21 Quadrants of Darwiportunism
... 66
Figure 22 Intersection and connecting factor of knowledge sharing
... 67
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1. Introduction
1.1 Motivation
Companies face each other more than ever in a fast-changing environment, including
global competition and fast-changing markets. A company today has to react quickly to
the market changes or - in the ideal case it has to notice the competition- and market
developments from the very beginning in order to keep or advance its position in the
market. To achieve this, somebody has to provide the corporate management with the
most current information.
In this special working field, a professional interdisciplinary corporate management and
corporate development drift appeared as a part of market research in the 1970s, called
"Market Intelligence" or "Competitive Intelligence" (in the following named as
Competitive Intelligence, abbreviated as "CI"). The mission of Competitive Intelligence
is to win advantages over competitors by systematic legal investigation and analysis of
fragmented market information. In time of raising competitive pressure in a complex
and fast moving competitive environment it is very important to be one step-ahead of
the competitors. Companies have to anticipate the activities of their competitors in
their strategic adjustment (Michaeli, 2006).
The field experienced a boost with Michael Porter's 1980 publication "Competitive
Strategy: Techniques for analyzing industries and competitors". The focus of CI shifted
from an activity concerned primarily with the competitors, to an activity focusing on
the organizational environment (Schwarz, 2007, p. 56). This development is reflected in
the CI definition of the Society of CI Professionals to which Lux and Peske (2002, p. 27)
refer: "Competitive Intelligence is the process of monitoring the competitive
environment. Competitive Intelligence enables senior managers (...) to make informed
decisions about everything from marketing, R&D, and investing tactics to long-term
business strategies. Effective CI is a continuous process involving legal and ethical
collection of information analysis."
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These market- and competitor-reports are mostly self-made, as each company has its
own requirements and own market targets. As a consequence, CI-experts are mostly
found in big-sized companies (Altensen 2003 in: (Michaeli, 2006, p. 461). With rising
numbers of employees, the amount of CI-full-time-employees increased (Global
Intelligence Agency, 4/2005, p. 23). As core data of competitors is generally available
freely, e.g. by getting quarterly financial reports of stock market companies and limited
companies, other analyzed data can be bought by market research companies (Pfaff,
2005, p. 40). However, strategically important insight-information can seldom be found
in this data.
A supplemental part is to acquire the knowledge about competitors from the
employees of your own company. Most of the staff has direct- or indirectly to do with
the competitors: Some of them may have worked there before, the development
department may best know the technical advantages (or disadvantages) and
specifications of the rival´s products best, the sales department may have experience
in the rivals´ distribution- and price politics, the marketing department could easily
disenchant the marketing appearance to reveal the rivals´ core business.
Collecting all this huge and in the beginning undefined information in the CI-process
cycle corresponds with another management tool: The Knowledge Management.
Ikujiro Nonaka (1991, p. 96) drew a link between Knowledge Management and
Competitive Intelligence already in 1991, stating that "in an economy where the only
certainty is uncertainty, the one sure source of lasting competitive advantage is
knowledge". The other way around, knowledge can be considered as competitive
advantage (McEvily, et al., 2000, p. 295). Peter Drucker (1995, p. 271) stressed that
"knowledge has become the key economic resource and the dominant perhaps even
the only source of competitive advantage". Bünnagel (2010, p. 10) states that the
valuation of knowledge is a core part of the corporate strategy. CI-literature mostly
puts the focus on strategic management tools rather than on knowledge acquisition
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and knowledge connection. This assignment sets the fundamentals between these two
management approaches.
The target group of this thesis are CI-practitioners which are in charge of information
gathering and which are dependent on information within their company, held by the
employees.
1.2 Problem Definition
If your company knew what your company knows you could save a lot of money!
Following Bernhard (1994, p. 19), "most of the intelligence that managers require
already exists inside the firm. The problem, generally, is that no formal mechanism is in
place to leverage internal information resources. Managers and staff from engineering,
finance, human resources, manufacturing, marketing, R&D and sales, all have
something to contribute in terms of valuable competitive information. In addition, they
can all benefit from intelligence feedback. But someone must talk to and motivate
them. It is a key function of CI activity to harness the power and add value to the
capabilities of these knowledge assets."
Pfaff (2005, p. 57) specifies that more than 75% of the information required already
exists in companies, whereas Lux & Peske (2002, p. 78) estimate this number to be
more than 80%,.
It is questionable whether solely communication and motivation are sufficient to
achieve the expected result of autonomous knowledge sharing or what additional
structures are necessary. The Intelligence-Pyramid (Figure 3, p. 20) is a step to
structure data, information and knowledge within the company but without explicating
the connections between.
The gathering of internal information can be a major issue for the CI-employees
involved, considering most of them have their professional background from the
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strategic planning/business development-side
1
(Global Intelligence Agency, 2/2011, p.
9). Although the mostly unutilized knowledge of the own employees is recognized as
being valuable and to be an easily accessible information source (Michaeli, 2006, p.
450) and although some companies built up some skill-databases in frame of a
knowledge management system which can also be used for CI-aspects (Michaeli, 2006,
p. 452), the CI-survey of CI-specialists Frost+Sullivan revealed in 2012 that the biggest
practical problem for the SCIP
2
-related companies
3
is gathering the competitive
information from their own employees (SCIP, 2012, p. 20).
In literature, CI has been perceived as an activity primarily concerned with analyzing
the competitors of an organization and as an activity that considers the environments
of that organization. This means that CI professionals not only have to focus on their
competitors, but also on their organization's stakeholders and on developments in
their environment (Schwarz, 2007, p. 55). However, CI literature mostly focusses on
skills to structure the knowledge rather than on internal knowledge elevation. If so, it
mostly covers the technical side of information gathering rather than presenting a
model of knowledge investigation within the organization.
Michaeli (2006, p. 445) points out that in implementation of CI the knowledge transfers
and routes within a company are in practice mostly disregarded and difficult to
implement. In contrast to that, however, he points out that the HUMINT (Human
Intelligence Networks)-approach is the most meaningful of the CI-concept.
According to the GIA-poll in 2005 (4/2005, p. 14ff), the gathering and "editing of
relevant information mostly happens at 40% of the 2005-polled companies by internal
1
Results of GIA-2011-survey ´under which organizational function Market Intelligence activities
organizations are set up´:
Strategic Planning/Business Development: 39%
Sales and Marketing: 37%
Research and Development/Product Management: 14%
Supply Chain Management: 4%
Other: 7%
2
SCIP = Strategic and Competitive Intelligence Professionals
3
Either in B2B and B2C business models (SCIP, 2012, p. 21)
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databases and employee attitude surveys. Also newsletters and informal, company-
internal networks serve as information source for CI, also skill enhancement trainings
and continuing education". However, the sole introduction and creation of
technological networks are not sufficient to optimize the exposure to knowledge.
Indeed, IT-technology offers the possibility of connecting employees and departments,
regardless of the place of action and to enhance the knowledge exchange, but it serves
no guarantee that the individuals really share their knowledge with each other
(Wilkesmann & Rascher, 2005, p. 14). The derived question is what factors influence
the employees´ attendance in sharing their knowledge.
1.3 Objectives
This Master thesis calls attention to the organizational structures and humans involved
in the CI-cycle. CI is not seen as an isolated "island" within the company but as an
integrated system which keeps the competitive capability of the company alive. As this
thesis has a fundamental approach the outcomes will be mostly on a theoretical level.
The aim of this thesis is to build a connection between the two disciplines CI and KM in
order to find an answer to the question of how companies can solve their problem in
capturing the competitive information held by their employees.
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Figure 1 Thesis overview (own illustration)
To answer the main research question of what companies can do to capture
competitive information held by their employees, the following sub-questions are
derived.
Research Question 1: How is CI mostly organized in companies in regard to knowledge
acquisition and where are the interfaces to the problem of capturing the employees´
knowledge?
Here, initially a short history of Competitive Intelligence will introduce the topic. The
aim is to point out where CI comes from, under what circumstances the CI-specialists
work and what self-conception they have. The actual and relevant terms of
Competitive Intelligence will be introduced, including Key Intelligence Topics and the
CI-cycle. Further, the first intersections to Knowledge Management will be encircled.
1. How is CI mostly
organized in
companies and where
are the interfaces to
the problem of
capturing the
empoyees´
knowledge?
... ...
3. What enhances and inhibits
employees in sharing their
knowledge?
2. What structures from KM exist
to locate knowledge inside companies and
to involve the employees?
The Competitive Organization: Knowledge Management approaches in Competitive Intelligence
What can companies do to capture competitive information and knowledge from their employees?
12
Aim is to identify the steps where the employees´ knowledge is requested by the CI-
specialists and to outline what special need of Knowledge Management CI demands
within its cycle.
Research-Question 2: What requirements and structures from KM exist to locate
knowledge inside companies and to activate knowledge sharing?
This question focusses on the structural and organizational possibilities to identify the
required knowledge inside the company. The new idea is to enhance the CI-approach
by the active organization of knowledge and knowledge-sharing and to show what
conceptions of KM can stimulate the precise knowledge-sharing. Relevant KM-terms
will be defined and it will be outlined what possibilities exist to structure knowledge to
find contributions to the Key Intelligence Topics (KIT).
The involvement of the employees is a focal point of this research question: The focus
is aimed on the organizational framework and on the involved employees rather than
on derived technical solutions.
Research Question 3: What factors influence the employees´ attendance in sharing
their knowledge?
A combined CI- and KM-system alone is not a self-propelling item and no guarantee for
a successful execution. The aims of the company and of the employee are in practice
often not congruent. In other words: The success of the combined CI-and KM-system
stands and falls with the participation of the employee. Without his willingness and
motivation, the system alone is worthless. It is, however, important to carve out what
factors influence the employees´ attendance in sharing their knowledge. In this
chapter, the employees´ practical view on knowledge sharing will be examined. What
are the intersections between a company and its employees in regard to knowledge
sharing?
13
1.4 Methodology
In research question 1, relevant terms of CI will be defined to point out the
specifications of the CI-cycle and the comprehensive parts of Knowledge Management.
Source to these explanations will be standard literature in the relevant fields. This is
important as CI is mostly a practicable method which has different imprints in each
company. The existing theoretical guiding literature will be the foundation to find the
widest common base.
For research Question 2, it will be examined in the following chapter what solutions
from the KM-approach exist to locate knowledge within a company and how the
employees can contribute. This innovative approach will transfer structures from the
KM to CI with using core sources, where possible.
Firstly, a definition of the relevant terms will be made. Afterwards, the existing primary
knowledge approaches which are fitting to the examined problem will be presented.
Here, a meta-analysis of actual research results will be executed. The requirements to
these sources are to find out the dynamic knowledge within a company which is not
yet stored or compiled yet. The results will be adopted and transferred to the CI-cycle.
Knowledge Management contains several disciplines
4
in this thesis, the discipline
"knowledge exchange" will be specially regarded (IWM, 2012).
With research question 3, the factors influencing employees in sharing their
knowledge with the company will be answered by theoretical literature analysis of
motivation. This chapter will be based on the previous outcomes, especially on the
connections between CI and KM from the previous research question.
The aim is to present actual research results in a new context. Also, the target group of
knowledge management differs: Addressees are professionals from the strategic
4
Knowledge acquisition in Hypermedia, Cybermedia, Multimedia
Social-motivational processes, Knowledge exchange, Knowledge construction
14
management. A transfer of disciplines will therefore be attempted. The validity of the
meta-analysis will be the knowledge approach within the CI-cycle.
1.5 Expected results
The definition of the relevant terms of CI and KM will bring an actual theoretical scope
of the mostly practical approach of the CI-cycle and the point of contact to Knowledge
Management. The introduction of the relevant KM terms enlarges the scope of CI
practitioners and steer the attention to the necessary foundations for the further
discussion.
As secondary research methods will be used and fundamentals will be set, the results
of the research will be mostly universal. This means independent of the business
model or size, the presented solution has the claim to give a strategic approach of
knowledge sharing from the scientific side. The compendium shall be anchor to the CI-
professionals to work on their internal communication and organization-system, in
order to get the right information at the right time.
In chapter 3, the expected result is an integrated model of CI and KM. The focus lies on
the structural preconditions and on the preconditions for a conceptual design to
succeed with the solution of the initial problem of including the employees' knowledge
in competitive intelligence.
Chapter 4 will present factors of knowledge sharing from the employees´ view which
give a compendium of motivators and de-motivators of the employees and focusses
therefore on the human rather than on the technical side.
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2. Competitive Intelligence
2.1 Definitions
Bernhardt (1994, p. 13) defines CI as "both a process and a product, rooted firmly in
the notion that ´Increased understanding of competitors´ strengths and weaknesses ...
leads to a more effective strategy formulation. CI thus ranks as one of the most
important strategic tools that managers possess` (Walleck, et al., 1991). We can use the
following as a two-part working definition of CI:
1.
An analytical process that transforms disaggregated competitor, industry, and
market data into actionable strategic knowledge about the competitor´s
capabilities, intentions, performance, and position; and it is
2.
The end product, or output, from that process."
Following Fuld (2010, p. 4), Competitive Intelligence is ,,analyzed information that gives
insight and competitive advantage". The term "intelligence" comes from military usage
and means "early reconnaissance". By "early reconnaissance" of the enemy it is
possible to anticipate his actions in order to respond to and surprise him quickly with a
counterstrike. The more purposeful information someone has about his counterpart
and competition, the better the positioning of the own "troops" and the more
successful the own decisions and arrangements are. The oldest known military strategy
by Sun-Tzu (500 B.C.) brings the purpose of CI to the point:
x If you know the enemy and know yourself, you need not fear the result of a
hundred battles.
x If you know yourself but not the enemy, for every victory gained you will also
suffer a defeat.
x If you know neither the enemy nor yourself, you will succumb in every battle
The term "Intelligence" therefore describes the adjustment of the CI-department and
their strategic operation method. The Strategic and Competitive Intelligence
Professionals "SCIP" (2013) emphasize in their code of ethics "to comply with all
applicable laws, domestic and international", to "accurately disclose all relevant
16
information, including one's identity and organization, prior to all interviews", to
"promote this code of ethics within one's company, with third-party contractors and
within the entire profession" and to "faithfully adhere to and abide by one's company
policies, objectives and guidelines".
However, intelligence means more than accumulating as much information as possible
about competitors, markets and technology and the edited presentation to the
decision board. Intelligence is strategic selected information from various sources
which has been put together, processed and analyzed and which can be used as a basis
to make reasonable, sound decisions. Information by itself is available to anyone and
does not provide an organization with a benefit over another. Intelligence, on the other
hand, is how that information is processed and analyzed and used to provide a
competitive advantage (Kahaner, 1998, p. 20ff).
Michaeli (2006, p. 3) identifies the term "Competitive" as the competition oriented
adjustment of a function and CI therefore as the systematic process of information
gathering and information analysis, by delivering a basis for decision-making by
analyzing the fragmented (raw)-information about markets, competitors and
technologies. In this context, namely as result of this process, "Intelligence" means
knowledge of markets and competition which serves as the common base for the
decision-making.
Following Fleisher (2001, p. 3) is "CI (..) the process by which organizations gather
actionable information about competitors and the competitive environment and,
ideally, apply it to their decision-making and planning processes in order to improve
their performance. Competitive intelligence links apparently unrelated signals, events,
perceptions, and data into patterns and trends concerning the business environment.
Competitive intelligence can be simple, such as scanning a company's annual report
and other public documents, or elaborate, such as performing a fully digitized war
gaming exercise over continents and time."
17
Pfaff (2005, p. 9) sees the relevant character of CI in the future-oriented protection and
business of sustainment of the company and characterizes CI as a "new management
task in markets of today which are hallmarked by raising competitive dynamics and
raising complexity".
The mentioned definitions show that CI covers the competitive environment of a
company, including a broad range of inputs. It mostly involves Porters 5-forces
including the inspection of the suppliers, customers, substitute products, threat of new
entrants and the competitive rivalry within an industry (Porter, 1980). The
specifications and demands of the single company determine the respective set up of
CI. Figure 2 shows the context of CI in a graphical way.
Graphical Overview of CI
Figure 2 An Intelligence System in Operation (Global Intelligence Agency, 3/2010, p .8ff)
Figure 2 identifies the Intelligence-Process, respectively the CI-cycle as the core process
of CI. On the one hand side, external information is brought into the CI-cycle, on the
18
other hand, internal information which is here seen separated from the external, is
delivered. The intelligence process synthesizes all this information and delivers project-
and process-related intelligence support to diverse departments such as the strategic
planning, sales & marketing, Research & Development and other. By continuous market
monitoring relevant information will be given to the management board for strategic
conclusions, implications and decision-making.
This procedural method is distributed by main CI-capacities: Michaeli (2006, p. 451)
points out the importance of internal and external networks which make the CI-
responsible by this very individual approach to an essential person. Detl (2011, p. 132)
separates between internal and external information sources but a structure regarding
the base of knowledge is not given.
Figure 2 (p.18) outlines the internal and external inputs to the intelligence process and
the outworked monitoring plan in requested focus fields. Following Probst, et. al.
(2010, p. 29), companies import a significant part of their knowledge-need from
sources outside the company. The relationships to customers, suppliers, to competitors
and partners in co-operations bear an enormous and often unexploited potential for
the acquisition of knowledge.
This thesis premises that most of the external information already exists within the
company (compare 1.2 Problem Definition) which does not need an extra investigation
for CI. As a consequence, Figure 2 actually shows a separation of external and internal
information, which is in practice not given.
The conclusions of the intelligence-report constitute the base for management
decisions. This shows that CI is future-oriented and the cycle is a permanent process.
Basic requirement for CI is the knowledge of the own strategy and basic knowledge of
the competitors. CI is therefore no instrument to achieve knowledge about the own
strengths and weaknesses, but instead to carve out the own core competences and to
show future ways of business development from the company within.
The detailed intelligence process will be outlined in chapter "2.2 CI-cycle".
19
Figure 3 Intelligence Pyramid (Global Intelligence Agency 2004, p.4)
As the aim of CI is to produce intelligence out of data, according to GIA (2004, p. 4) its
goal is also to structure the data, information, knowledge and intelligence and to
bundle it together to the form of the "Intelligence Pyramid". This pyramid separates
the single steps of raw, random and dispersed information up to distilled and
integrated intelligence. What added value information has compared to data is not
specified. Furthermore, the precise capacity of the employee in each step is not
mentioned at all. "What turns information into intelligence (...) is processing it into
forecasts and utilizing it in future-oriented decision-making. Hence, managing the
future does not only mean being able to anticipate what will happen outside the
company but also being able to shape the happenings through own actions, i.e. to
proactively create one´s future." (Global Intelligence Agency, 2004, p. 3).
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Details
- Pages
- Type of Edition
- Erstausgabe
- Publication Year
- 2015
- ISBN (eBook)
- 9783954898848
- ISBN (Softcover)
- 9783954893843
- File size
- 1.9 MB
- Language
- English
- Publication date
- 2015 (March)
- Keywords
- competitive intelligence knowledge management
- Contact Product Safety
- Anchor Academic Publishing