**2. Previous taxonomy for organizational knowledge assets**

Organizational knowledge assets, otherwise known as intellectual capital in the knowledge management literature have been construed as any information, belief or skill that the organization can apply to its various activities (Anand, et. al., 2002). According to this view, it can exist in multiple forms. It may refer to the specific scientific knowledge possessed by an organization's research department, or information about an oversee market, or skills that enable managers to make effective decisions in rapidly changing environments (Anand, et. al., 2002). However, irrespective of the various forms in which organizational knowledge exists, it has been broadly differentiated into two types. These are tacit knowledge and explicit knowledge (Polanyi, 1962, Nonaka, 1994; De Long and Fahey, 2000; Markus, 2001; Anand et. al., 2002).

The tacit dimension of knowledge comprises both cognitive and technical elements (Nonaka, 1994). The cognitive element refers to an individual's mental models consisting of mental maps, beliefs, paradigms, and viewpoints. The technical component consists of concrete know how, crafts and skills that apply to a specific organizational context (Alavi and Leidner, 2001). According to De Long and Fahey (2000), tacit knowledge is what we know but cannot explain. Consider, for example, a quality control engineer who through years of experience can identify the quality of a newly manufactured engine by its sound and vibrations on testing the engine. Such tacit knowledge cannot be transferred through a written document, and yet it is very important in the organization (Anand, et. al., 2002).

Explicit knowledge, on the other hand, is articulated, codified, and communicated in symbolic form and/or natural language (Alavi and Leidner, 2001). Explicit knowledge can easily be communicated and shared among individuals. For instance, information about

A Stakeholder Model for Managing Knowledge Assets in Organizations 81

Internal relational knowledge includes the value of the strategic relationships created between the organization and its employees (Menon and Pfeffer, 2003; Lytras and Ordonez, de Pablos, 2009). External relational knowledge represents the external perspective of relational knowledge and includes social relations of the organization with principal agents: customers, suppliers, shareholders, local government and communities, etc. (Lytras and

Based on the stakeholder theory (Freeman, 1984); a firm can only exist through the interaction, transactions and exchanges carried on with those who have vested stakes in it. In the long run the firm must operate in such a way that each stakeholder is satisfied. The primary goal of the firm is survival, the more dissatisfied its stakeholders are, the more certain it is that the company's activities will cease (Freeman, 1984; Carroll, 1989; Nasi, 1982; 1995). Therefore, the long term wealth generating capacity of organizational knowledge assets can only be guaranteed when potential and existing stakeholders are satisfied (Stewart, 1997; Nielsen, et. al., 2009; Joia and Sanz, 2009; Schiuma, 2009; Lytras and Ordonez

Given the importance of satisficing the needs of stakeholders, only relational knowledge cannot achieve this goal; however, the contemporary knowledge management literature has inadvertently restricted both human knowledge and structural knowledge from undertaking the task of meeting stakeholders' interests. A growing number of researchers and consultants have argued that relational knowledge is the only valid notion of knowledge that managers should be concerned with (De long and Fahey, 2000). Hence the literature has failed to incorporate the purpose of human and structural knowledge into the overall organizational goal of putting stakeholders' interests at the centre of business activities. This shortfall shall be arrested by the latter sections of this article. But before this issue is treated I shall first of all link knowledge management to business strategy. This is important because organizational knowledge assets are strategic resources (Lytras and Ordonez de Pablos, 2009; Tongo, 2010; Schiuma, 2009) and the consideration of all stakeholders of organizations borders on the pursuance of a particular business strategy.

**3. Linking knowledge management to business strategy: Past, present** 

Every approach to strategy conceives sources of wealth creation and the essence of the strategic problem faced by organizations differently (Teece, et.al., 1997). The competitive forces' approach pioneered by Porter (1980), views the strategic problem in terms of industry structure, entry deterrence, and positioning; game theoretic models see the strategic problem as one of interaction between rivals with certain behavioural expectations about each other; resource based perspective asserts that long run superior performance is associated with the possession of scarce, valuable and inimitable firm-specific resourceshuman, material and physical resources (Barney, 1991; Teece, et. al., 1997; Penrose, 1959; Wernerfelt, 1984; Studdard and Darby, 2011). However, the knowledge based perspective to strategy, which is the crux of this study, postulates that the services rendered by these firm specific resources is basically a function of the knowledge assets possessed by the firm

This position stems from the notion that knowledge as a focal asset creates unique advantages for governing economic activities through a logic that is very different from traditional resources' management. Unlike other resources that are governed by the law of

Ordonez, de Pablos, 2009; Ho, 2007; Menon and Pfeffer, 2003).

de Pablos, 2009; Hillman and Kiem, 2001).

(Alavi and Leidner, 2001; Grant, 1996).

**and future** 

market size and regulations in an overseas market can be precisely transferred to a report that can be shared within the organization (Anand, et. al., 2002).

It is important to note that both tacit and explicit knowledge are stored within individuals, organizational systems and processes. Tacit knowledge that exists within individuals is referred to as human knowledge or human capital. Human knowledge is the combined knowledge, skill, innovativeness and ability of individuals to realize organizational tasks and goals (Tongo, 2010; Skandia, 1996; Alas, 2009; Joia and Sanz, 2009; De Long and Fahey, 2000). It also includes wisdom, experience, intuition, and even spirituality of organizational members (Lytras and Ordonez de Pablos, 2009). Human knowledge is the property of individual employees which does not belong to the corporate entity (Tongo, 2010; Lytras and Ordonez de Pablos, 2009). Even though employees may possess some explicit knowledge alongside their unique tacit knowledge, such explicit knowledge is not part of human knowledge because it is common to some or the entire members of the organization.

Knowledge that is explicit and common to organizational members is called structural knowledge or capital. Structural knowledge signifies knowledge assets that remain in the organization when it does not take into consideration human knowledge (Ordonez de Pablos, 2009). Structural knowledge connotes organizational knowledge that has moved from individuals or from the relationships between individuals embedded in organizational systems and processes, such as organizational routines, policies, culture, or structure (Lytras and Ordonez de Pablos, 2009).

According to Lytras and Ordenez de Pablos, structural knowledge can be further broken down into technological knowledge and organizational knowledge. Technological knowledge represents industrial and technical knowledge, such as results from research and development and process engineering. Organizational knowledge includes all aspects that are related to the organization of the company and its decision making capabilities and processes. For instance, organizational knowledge comprises organizational culture, organizational structure design, coordination mechanisms, organizational routines, planning and control systems, among others (Bontis, Chong, and Richardson, 2000; Skandia, 1996).

Apart from human and structural knowledge, the literature on knowledge management also recognizes another class of knowledge assets. It is termed relational knowledge or capital. It is also called social capital or social knowledge by some knowledge management theorists (Anand, et. al; 2002; De Long and Fahey; 2000). Unlike human and structural knowledge, relational knowledge can exist in both explicit and tacit forms (Anand, et. al; 2002). Explicit relational knowledge can be obtained from external sources through the use of impersonal communication media such as electronic data interchanges, as well as faxes and letters. On the other hand, tacit relational knowledge requires personal communication that allows for direct and intense interaction among individuals (Anand, et. al., 2002).

Both the explicit and tacit forms of relational knowledge constitute the value of organizational relationships. In general it has been accepted that these relationships are mainly focused on parties that are external to the organization. This includes customers, suppliers, shareholders, etc. (Ordonez de Pablos, 2005). Nevertheless, it must be appreciated that the relationship of an organization with its employees creates value. So for this strategic reason it is necessary to put them in mind. Therefore, to advance in the study of relational knowledge, it is convenient to differentiate between internal relational knowledge and external relational knowledge (Ho, 2007; and Ordonez de Pablos, 2009).

market size and regulations in an overseas market can be precisely transferred to a report

It is important to note that both tacit and explicit knowledge are stored within individuals, organizational systems and processes. Tacit knowledge that exists within individuals is referred to as human knowledge or human capital. Human knowledge is the combined knowledge, skill, innovativeness and ability of individuals to realize organizational tasks and goals (Tongo, 2010; Skandia, 1996; Alas, 2009; Joia and Sanz, 2009; De Long and Fahey, 2000). It also includes wisdom, experience, intuition, and even spirituality of organizational members (Lytras and Ordonez de Pablos, 2009). Human knowledge is the property of individual employees which does not belong to the corporate entity (Tongo, 2010; Lytras and Ordonez de Pablos, 2009). Even though employees may possess some explicit knowledge alongside their unique tacit knowledge, such explicit knowledge is not part of human knowledge because it is common to some or

Knowledge that is explicit and common to organizational members is called structural knowledge or capital. Structural knowledge signifies knowledge assets that remain in the organization when it does not take into consideration human knowledge (Ordonez de Pablos, 2009). Structural knowledge connotes organizational knowledge that has moved from individuals or from the relationships between individuals embedded in organizational systems and processes, such as organizational routines, policies, culture, or structure (Lytras

According to Lytras and Ordenez de Pablos, structural knowledge can be further broken down into technological knowledge and organizational knowledge. Technological knowledge represents industrial and technical knowledge, such as results from research and development and process engineering. Organizational knowledge includes all aspects that are related to the organization of the company and its decision making capabilities and processes. For instance, organizational knowledge comprises organizational culture, organizational structure design, coordination mechanisms, organizational routines, planning and control systems, among others (Bontis, Chong, and Richardson, 2000;

Apart from human and structural knowledge, the literature on knowledge management also recognizes another class of knowledge assets. It is termed relational knowledge or capital. It is also called social capital or social knowledge by some knowledge management theorists (Anand, et. al; 2002; De Long and Fahey; 2000). Unlike human and structural knowledge, relational knowledge can exist in both explicit and tacit forms (Anand, et. al; 2002). Explicit relational knowledge can be obtained from external sources through the use of impersonal communication media such as electronic data interchanges, as well as faxes and letters. On the other hand, tacit relational knowledge requires personal communication that allows for

Both the explicit and tacit forms of relational knowledge constitute the value of organizational relationships. In general it has been accepted that these relationships are mainly focused on parties that are external to the organization. This includes customers, suppliers, shareholders, etc. (Ordonez de Pablos, 2005). Nevertheless, it must be appreciated that the relationship of an organization with its employees creates value. So for this strategic reason it is necessary to put them in mind. Therefore, to advance in the study of relational knowledge, it is convenient to differentiate between internal relational knowledge and

direct and intense interaction among individuals (Anand, et. al., 2002).

external relational knowledge (Ho, 2007; and Ordonez de Pablos, 2009).

that can be shared within the organization (Anand, et. al., 2002).

the entire members of the organization.

and Ordonez de Pablos, 2009).

Skandia, 1996).

Internal relational knowledge includes the value of the strategic relationships created between the organization and its employees (Menon and Pfeffer, 2003; Lytras and Ordonez, de Pablos, 2009). External relational knowledge represents the external perspective of relational knowledge and includes social relations of the organization with principal agents: customers, suppliers, shareholders, local government and communities, etc. (Lytras and Ordonez, de Pablos, 2009; Ho, 2007; Menon and Pfeffer, 2003).

Based on the stakeholder theory (Freeman, 1984); a firm can only exist through the interaction, transactions and exchanges carried on with those who have vested stakes in it. In the long run the firm must operate in such a way that each stakeholder is satisfied. The primary goal of the firm is survival, the more dissatisfied its stakeholders are, the more certain it is that the company's activities will cease (Freeman, 1984; Carroll, 1989; Nasi, 1982; 1995). Therefore, the long term wealth generating capacity of organizational knowledge assets can only be guaranteed when potential and existing stakeholders are satisfied (Stewart, 1997; Nielsen, et. al., 2009; Joia and Sanz, 2009; Schiuma, 2009; Lytras and Ordonez de Pablos, 2009; Hillman and Kiem, 2001).

Given the importance of satisficing the needs of stakeholders, only relational knowledge cannot achieve this goal; however, the contemporary knowledge management literature has inadvertently restricted both human knowledge and structural knowledge from undertaking the task of meeting stakeholders' interests. A growing number of researchers and consultants have argued that relational knowledge is the only valid notion of knowledge that managers should be concerned with (De long and Fahey, 2000). Hence the literature has failed to incorporate the purpose of human and structural knowledge into the overall organizational goal of putting stakeholders' interests at the centre of business activities. This shortfall shall be arrested by the latter sections of this article. But before this issue is treated I shall first of all link knowledge management to business strategy. This is important because organizational knowledge assets are strategic resources (Lytras and Ordonez de Pablos, 2009; Tongo, 2010; Schiuma, 2009) and the consideration of all stakeholders of organizations borders on the pursuance of a particular business strategy.
