KNOWLEDGE

ACQUISITION & LOSS

Prof.Dr.Dr. Dr.H.C. Constantin Bratianu

UNESCO Department for Business Administration
Faculty of Business Administration
Bucharest University of Economic Studies
A new modeling
approach
 External Environment
Internal Environment

Interface

Knowledge Knowledge
Knowledge Creation
Acquisition Loss

The dynamic equilibrium for the

knowledge field
 Knowledge Dynamic Equilibrium

Using a metaphorical thinking we may analyze what happens with

the level of knowledge in a company, considering that company an
open system.

In an open system there are fluxes of knowledge that cross the

interface of the system in both directions (i.e. inside-outside, and
outside-inside).

The variation of the knowledge level in the company is given by:

Variation of knowledge level =

Knowledge acquisition + Knowledge generation - Knowledge loss
 Knowledge Acquisition (I)
Some authors consider knowledge creation and knowledge
acquisition of the same type, since both of them provide new
knowledge for the company.

However, there is a clear distinction between them:

- Knowledge creation means that knowledge is generated from
within the company, using internal human resources and
integrators action.
- Knowledge acquisition means that knowledge is brought
through different mechanisms from outside in the
organization. Knowledge acquisition is basically a process of
knowledge transfer.
At the individual level, knowledge acquisition means for one
person to get some knowledge from another one by using
questions. This process is used in creating expert systems or
artificial intelligence.
 Knowledge Acquisition (II)
Knowledge acquisition in organization spans a large spectrum of
activities aiming at increasing the organizational knowledge level.

Knowledge acquisition refers mostly to rational knowledge which

is easily transferable. Emotional knowledge and spiritual
knowledge are generated internally by people.

The most used method of acquiring knowledge is by purchasing it.

Companies purchase knowledge when:
- they buy books, professional journals, software, databases,
video materials, patents, registered marks, access to huge
international databases etc.
- they hire experienced and talented people.
- they hire consultants to analyze some problems and find
solutions.
- they purchase other companies with a great potential for
knowledge creation.
 Knowledge Acquisition in SMEs
SMEs have usually a low level of organizational knowledge (the
knowledge of the 1-2 founders and some other people hired initially).

For them knowledge is critical and thus their strategy is to increase

the level of knowledge by purchasing it. They are looking to hire
experienced and talented people, and to buy software programs and
databases.

For instance, a small company working in online sales would buy

databases with email addresses and expertise in web design.

A small company in logistics would buy software programs able to

represent and document all transport and storing activities, and
optimize the transportation costs.

For SMEs it is important to create networks and to acquire

knowledge from the network flow of knowledge.
 Knowledge Capturing
Knowledge capturing refers to that process through which trained
people can obtain valuable knowledge from experts and integrate it
into expert systems or expert databases.

Experts are considered those persons that have a high level of

understanding and knowledge in a certain field of activity. Experts
take advantage of their valuable experience and of their capacity of
transforming tacit knowledge in explicit knowledge.

Expertise is the capacity of people to use their knowledge and

intelligence in solving problems from a certain field of activity.

Usually, people working in consulting companies are considered

experts, and their capacity of using knowledge in solving complex
problems, expertise.
 Experts and Expertise
Studies show that expertise is related to experience which means
variety and intensive work. Experts works much harder than other
people in order to achieve a high level of expertise in a certain field.

The general rule for becoming an expert is to work 10,000 hours in

the same field of activity. That means to achieve the level of
mastery.

To become a chess grandmaster also seems to take about 10

years, which means about 10,000 hours of hard work.

Expertise is a developmental process that increases the mastery

level in an incremental way, from novice to master.
Deep Blue IBM versus Garry Kasparov

They played 5 games and the result was

2 and vs. 2 and .

On May 11, 1997 in New York City there

was the 6th game in which Garry
Kasparov was defeated.
 Expert Systems (I)
Expert systems are knowledge-based software tools or decision
support systems, intended to assist the decision makers.

They are created for specific type of problems and contains two
major components: a software structure or framework, and a
content of knowledge.

The software structure is built usually on the if-then logic.

Many expert systems developers discovered that the difficult

problem is not to write the computer program but to elicit
knowledge from experts.

Many experts do not want to offer their knowledge, and many

engineers who develop the computer programs do not have
experience in extracting significant knowledge from experts.
 Expert Systems (II)
In realizing an expert system there are several important phases:

1. Collect preliminary knowledge through document analysis and

direct observation. The person who would like to interview the
expert should be able to understand the field of activity and the
types of knowledge that is characteristic.
2. Learning hierarchy analysis. In performing any task there is a
hierarchy of steps with specific knowledge associated. Knowledge
representation can be done using flow charts or knowledge maps.
3. Critical decision method. It is important to understand very well
the decision process and it works in practice. The experts should
be able to explain how he or she makes decisions.
4. Interviews. These are essential in knowledge capturing.
5. Program validation. Consider some specific problems and
evaluate how the expert system answers to the practical
situations.
 Knowledge Waste
In many organizations there is knowledge that is not used at all, or
it is underused. That knowledge that is not used is called
knowledge waste. It is not lost, but not used.

Knowledge waste appears as a result of a bad management.

Knowledge waste means also to have very good people in

organization and not to use them at their upper level of their
experience and talent. They are used only in accordance with the
job description practice.

Intelligent management tries to reduce knowledge waste like

reducing any other waste. That happens frequently in the Japanese
companies and new creative companies (Google).
 Knowledge Loss
In USA and in Europe, knowledge loss became in the last years a
very complex problem due to ageing population and to increasing
the number of retired people.

When people retire, they leave companies with their experience

and professional knowledge that is difficult to be replaced fast
enough to avoid knowledge crises.

Also, when there are economical crises and multinational

companies with huge number of employees fire 5,000 or 10,000 of
employees, the knowledge loss generates managerial earthquakes.

The problem is how to reduce the knowledge loss and to increase

the knowledge retention.
 Boeing

After Boeing offered early retirement to 9,000 senior employees

during a business downsizing, an unexpected rush of new
commercial airplane orders left the company critically short of
skilled production workers.

The knowledge loss from veteran employees combined with the

inexperience of their replacements threw the firms 737 and 747
assembly lines into chaos.
 National Aeronautics and Space
Administration (NASA)

More than $24 billion was invested in NASA over 10 years to

research and produce the spacecraft and the whole system for
launching it, aiming at landing the first astronaut on the moon.

At its peak, about 400,000 employees were working for the Apollo
project.

After about 30 years and many re-structuring programs, many of

these highly specialized employees have been asked to retire or
have been fired out. With them, NASA lost a huge amount of
expertise.

Today, NASA applies cost-cutting strategies and it is not able to

recover all the knowledge lost.
 Intergenerational learning
Intergenerational learning is used in order to increase knowledge
retention in organization.

Mentoring. It is a very effective method if the mentor and the

mentee have the same interests and there is a compatibility
between there personalities. Mentoring means that the more
experienced person will share his/her experience toward the less
experienced person. It is a method in which all types of knowledge
(i.e. rational, emotional, and spiritual) come into play.

Mentoring is a method that takes time for knowledge transfer and

intergenerational learning.

Mentoring is used frequently in universities where professors work

together with younger assistants.
Johary window
Johary window
 Intergenerational research teams
In universities and many companies where there several
generations of employees it is advisable to create mixed age teams
for research or solving complex problems.

When people share the same responsibilities, they try to make use
of their full experience and rational knowledge.

In such teams, old people can share their experience with the
younger colleagues, and young people can share their knowledge
about internet or new high-tech devices with their older colleagues.

That means to have a two-way learning process, and when old

employees will retire a good part of their knowledge already have
been transferred to the younger employees.
Thank you for your attention !