**2. The SMEs knowledge**

118 New Research on Knowledge Management Technology

enterprises were forgotten. This is the main reason why in this paper analyze the SMEs knowledge and knowledge management, the risk management process and the professional risk assessment as essential part of SMEs business, the knowledge bases built and use to

The SMEs product development process has become an intensive process of knowledge application and it consists of a process of transformation of information. The knowledge creation is the major resource of organizational innovation and it, therefore, plays a more crucial role in developing a sustained competitive advantage for organizations, especially in a dynamic environment (Huang, 2009). The business advantage in having knowledge application, lies in the ability to analyze large amounts of data from any business model,

assess the risk at the SMEs level.

Fig. 1. The SMEs market strategy matrix

Fig. 2. The SMEs risk assessment matrix

Knowledge is power and knowledge has value, but knowledge value is still a challenging topic that has not been completely clarified, whether it be in engineering science or philosophy, economics, etc. (Xu and Bernard, 2011). Over the past 15 years, knowledge management (KM) has progressed from an emergent concept to an increasingly common function in business organizations (Zach et al., 2009). Understanding knowledge management within SMEs is fundamental to economic advancement, particularly if priorities and practices transferred from large organizations are sub-optimal or counterproductive (Sparrow, 2011). Knowledge exists in the mind of people and circulates within organizations (Nonaka and Takeuchi, 1995). For all companies KM and innovation plays an important role (Porter, 2001). Many of KM initiatives are implemented in large companies but in the last years there is a shift towards small and medium-sized enterprises (Fink and Ploder, 2006). Lately, there is increasing realization of need and significance of KM for sustainable competitiveness for SMEs (Pillania, 2008). According to some studies SMEs need a simple framework to organize their key knowledge processes: knowledge identification, knowledge acquisition, knowledge distribution and knowledge preservation (Fink & Ploder, 2007; Ploder & Fink, 2007). The *key knowledge processes* (KKPs) for SMEs (Rosu et al., 2009b) identified (presented in figure 3) are:


A Knowledge Management Framework as Knowledge Bases

Fig. 4. *Knowledge flow* vs. *knowledge used* in SMEs (Rosu et al., 2009b)

experience and individual characteristics.

(structural capital) and people (intellectual capital).

Fig. 5. *Business value* vs. *knowledge value* in SMEs (Rosu et al., 2010b)

Development Support to Professional Risk Assessment in SMEs 121

*The tacit knowledge* – that are very personal and difficult to formalized, dependent on

 *The implicit knowledge* – stored in the entities that depend on the practical context – products, technologies, processes, etc.; the value of knowledge is manifested in physical goods and services, the intellectual products (patents and licenses), processes

Enterprises are getting more knowledge intensive, and the integration of various types of knowledge becomes a challenge (Huang, 2008). Success of an enterprise is increasingly dependent on its capability to create an environment in order to improve productivity of knowledge work (Maier et al., 2009). At the enterprise level the knowledge could be found to individual, group or external resources. Professional qualifications, personal experiences, capacity to transform information's in knowledge constitute the individual resources. Patent acts, models, concepts, enterprise culture and management form the group resources. Individual and group resources totality represents the enterprise internal resources. Relations set of external resources with client, suppliers and partners, product and services credibility, offering quality. Tacit or explicit knowledge transfer between these resources

Fig. 3. The *key knowledge processes* (KKPs) for SMEs

Knowledge discovery is widely acknowledged as an interactive and iterative multi-step process ranging from the development of business understanding, data understanding, data preparation, modeling, evaluation and ultimately deployment (consolidation) of discovered knowledge (Sharma and Osei-Bryson, 2010). For SMEs it's necessary that the advantages of KM are clear and the implementation is easy otherwise they will continue to focus on their traditional way of working (Nunes et al., 2006). There are four different roles of knowledge in SMEs business (Fink, 2000; Heinrich & Lehner, 2005):


Generally, in some SMEs activity sectors, the knowledge generate capacity exceeds the human records and process capacity, which lead to a super sized knowledge offer. In this way can be generated an inefficacy at the organizational and personal level.

Figure 4 shows the relationship among knowledge production, knowledge assimilated and the knowledge uses effect. This figure reflects the three essential trends that characterize the new knowledge society and can influence some SMEs activities (Rosu et al., 2009b):


Short, medium and long term knowledge in handling industrial purposes research will focus on three main directions:


The main studies are identified two important distinctions of types of knowledge that has been used (Dragoi et al., 2007; Rosu et al., 2009a, 2009b; Rosu et al., 2010b):

 *The explicit knowledge* – which can be expressed in words and numbers; they can easily be communicated and distributed in the form of data, scientific formulas, codified procedures or universal principles.

Knowledge discovery is widely acknowledged as an interactive and iterative multi-step process ranging from the development of business understanding, data understanding, data preparation, modeling, evaluation and ultimately deployment (consolidation) of discovered knowledge (Sharma and Osei-Bryson, 2010). For SMEs it's necessary that the advantages of KM are clear and the implementation is easy otherwise they will continue to focus on their traditional way of working (Nunes et al., 2006). There are four different roles of knowledge

*Knowledge as support*: there is a low current strategic position of knowledge and in

*Knowledge as manufactory*: knowledge plays now an important role but the importance

*Knowledge as breakthrough*: in future knowledge will play a very important role for the

*Knowledge as weapon*: knowledge is important and the importance will increase in

Generally, in some SMEs activity sectors, the knowledge generate capacity exceeds the human records and process capacity, which lead to a super sized knowledge offer. In this

Figure 4 shows the relationship among knowledge production, knowledge assimilated and the knowledge uses effect. This figure reflects the three essential trends that characterize the

Short, medium and long term knowledge in handling industrial purposes research will

The main studies are identified two important distinctions of types of knowledge that has

 *The explicit knowledge* – which can be expressed in words and numbers; they can easily be communicated and distributed in the form of data, scientific formulas, codified

way can be generated an inefficacy at the organizational and personal level.

been used (Dragoi et al., 2007; Rosu et al., 2009a, 2009b; Rosu et al., 2010b):

 Knowledge assimilated increase, but in a much slow rhythm; Maintaining an almost constant level for knowledge used.

new knowledge society and can influence some SMEs activities (Rosu et al., 2009b):

Fig. 3. The *key knowledge processes* (KKPs) for SMEs

in SMEs business (Fink, 2000; Heinrich & Lehner, 2005):

future too.

future.

will decrease in future.

business still it does not.

Knowledge offer increase;

focus on three main directions: *Knowledge capitalization; Knowledge formalization;* 

procedures or universal principles.

*Knowledge use.* 

Fig. 4. *Knowledge flow* vs. *knowledge used* in SMEs (Rosu et al., 2009b)


Enterprises are getting more knowledge intensive, and the integration of various types of knowledge becomes a challenge (Huang, 2008). Success of an enterprise is increasingly dependent on its capability to create an environment in order to improve productivity of knowledge work (Maier et al., 2009). At the enterprise level the knowledge could be found to individual, group or external resources. Professional qualifications, personal experiences, capacity to transform information's in knowledge constitute the individual resources. Patent acts, models, concepts, enterprise culture and management form the group resources. Individual and group resources totality represents the enterprise internal resources. Relations set of external resources with client, suppliers and partners, product and services credibility, offering quality. Tacit or explicit knowledge transfer between these resources

Fig. 5. *Business value* vs. *knowledge value* in SMEs (Rosu et al., 2010b)

A Knowledge Management Framework as Knowledge Bases

Fig. 6. The *key knowledge employees* (KKEs) in SMEs

enterprise processes and procedures.

knowledge).

consultancy, etc.

and cooperation processes.

customers' wants for anticipations in the future.

production by obtaining relevant results in all activities.

Development Support to Professional Risk Assessment in SMEs 123

 *Specialized Knowledge* - specialized employees knowledge refer to the detailed understanding of enterprise products and services and national and international markets for these products and services, as well as advanced knowledge about

 *Ancient Knowledge* - knowledge that is possessed only older employees or employees who have retired. There are cases in which this knowledge has disappeared (and must be recreated) because the documentation doesn't exist or hasn't been adapted by experts or employees haven't shared before they retire. In these cases, enterprises may use the older or retired employees as consultants (for them to outsource their old or lost

 *Communication Knowledge* - knowledge about how can be shared knowledge from one employee to another employee or group of employees in the enterprise collaboration

 *Gathering data, information and knowledge from customers, providers and partners:* collecting all data, information, knowledge from clients into a knowledge base; using the info on customers for product and services development and modernization purposes; tight connections with customers through the Internet - maybe opening a forum for discussions; a thorough recording of the staff's contacts with the customers, of

 *Creating new incomes by exploiting the existing knowledge:* keeping all patents, licenses, market and necessity research, technical and economic research in a database accessible to the personnel; in case of changing profile within the company into a similar one: keeping all methods and expertise acquired during the former one; selling knowledge/expertise to other companies by means of license, patent,

In SMEs knowledge can be capitalized (see figure 7) through (Rosu et al., 2009a):

The learning knowledge process should receive special attention and organizational structure and culture of the enterprise should stimulate this process in order to improve

and knowledge conversion from a resource to other determines value creation (Rosu et al, 2009a, 2009b). Knowledge from internal and external sources may be categorized into functional or general domain knowledge, organizational knowledge, and problem-specific knowledge (Bolloju et al., 2002). Figure 5 shows how business value is added when the volume and quality of knowledge from the company grows.

The knowledge of employees of an organization is an important asset and such knowledge should be garnered for the ultimate good of the company (Hussain et al., 2010). At the enterprise level knowledge that employees have or should have are varied (see in figure 6 the *key knowledge employees -* KKEs) and can be classified as follows:


and knowledge conversion from a resource to other determines value creation (Rosu et al, 2009a, 2009b). Knowledge from internal and external sources may be categorized into functional or general domain knowledge, organizational knowledge, and problem-specific knowledge (Bolloju et al., 2002). Figure 5 shows how business value is added when the

The knowledge of employees of an organization is an important asset and such knowledge should be garnered for the ultimate good of the company (Hussain et al., 2010). At the enterprise level knowledge that employees have or should have are varied (see in figure 6

 *General Knowledge* - refers to knowledge's that are so popular that would be known by everyone or nearly everyone. The term "general knowledge" is used in everyday conversation (e.g. how good is your general knowledge level?). Another term that could equally well define this type of knowledge might be *Common Knowledge*. Because these skills are widely known would be to restrict general/common knowledge relatively few things taking into account the diversity and geographical distribution of the enterprises. General knowledge doesn't mean special, specialized or specific knowledge. The general/common knowledge is usually limited within certain boundaries (e.g. the general knowledge in a Romanian enterprise are different from general knowledge in a Brazilian company). Commonly, companies require employees with a good level of

 *Commonsense Knowledge* - is a collection of facts and information that an employee is expected to know, which means different people know different things. Common sense refers on the one hand to knowledge and, on the other hand, to solve problems using reasoning skills. Commonsense refers to the everyday knowledge such as to know that every day at work, morning, read the e-mail. Enterprise commonsense knowledge refers to things that an employee has to know just to be able to integrate and work within an enterprise. Employees of different companies may have different

 *Organization Knowledge* - the organization knowledge (*Enterprise Knowledge*) means capitalizing (using information and communications technologies) knowledge employees (knowledge is made jointly). The aim is to build the best alternative use of resources that the enterprise has according to objectives and which, due to internal and external organization developments will be adjusted dynamically. At the enterprise level, employees involved in all activities must be a team and to combine the

 *Acquired knowledge* - are the result of a complex process of collection (by the enterprise employees) information and knowledge necessary to develop and improve the activity (in the area in which they work) and problem-solving process. The result of the knowledge acquisition by employees consists of a lot of information and knowledge unordered. This knowledge and information will be selected, analyzed and interpreted

 *Learned Knowledge* - in the enterprise, learning is a process of documentation, experimentation, analysis and interpretation, a process of sharing the knowledge generated by employees in the past. Learning is a process of permanent change, transformation and updating of knowledge resulting in improved ways of thinking and action of employees. An enterprise is more successful if its employees learn quicker, implement and commercialize knowledge faster than the employees of competitors.

volume and quality of knowledge from the company grows.

general knowledge since their recruitment.

commonsense knowledge.

the *key knowledge employees -* KKEs) and can be classified as follows:

knowledge and skills for their work to become efficiently.

by employees during the learning process.

The learning knowledge process should receive special attention and organizational structure and culture of the enterprise should stimulate this process in order to improve production by obtaining relevant results in all activities.

Fig. 6. The *key knowledge employees* (KKEs) in SMEs


In SMEs knowledge can be capitalized (see figure 7) through (Rosu et al., 2009a):


A Knowledge Management Framework as Knowledge Bases

processes up to formation of internal memory.

knowledge and the adequacy requirements processes.

Fig. 8. The key knowledge management processes (KKMPs) in SMEs

discharge (see figure 9), (Rosu et al., 2008, 2009a, 2009b):

organization, in terms of efficiency.

appropriate knowledge.

customers, suppliers, etc.

(Malhotra, 2005).

(Rosu et al., 2010b):

Development Support to Professional Risk Assessment in SMEs 125

change the organization's present pattern of knowledge processing to enhance both it and its outcomes (Firestone and McElroy, 2005). Knowledge processes supported by knowledge infrastructures improve individual and team creativity and facilitate innovation (Janev and Vranes, 2005). The processing-driven paradigm of KM has its focus on best practices, training and learning programs, cultural change, collaboration, and virtual organizations

The KM processes involves (see in figure 8 the *key knowledge management processes* - KKMPs)

*Knowledge clustering* – the kinds of knowledge from the sources of the organization, the

*Knowledge storage* – this aims to store knowledge in the knowledge infrastructure of the

*Knowledge classified* – for evaluating and granting priorities that reflect the quality of

*Knowledge selection* – this allows the user to use certain criteria for identifying the most

 *Knowledge dissemination* – that knowledge stored in various forms (tacit, explicit or implicit) are accessed by all members of the organization and even stakeholders –

Successful SMEs are those who can leverage their knowledge in an effective and efficient manner, so as to make up for deficiencies in traditional resources, like land, labor, and capital (Desouza and Awazu, 2006).The knowledge of the enterprise contains the sharing knowledge of each individual (Dragoi et al., 2007; 2010). For increase the knowledge in SMEs for an efficient management of the intellectual capital and to improve the business value, we proposes a KM scenario in eleven steps: obtains and uses, learn and contribute, evaluates, sustain, support, exchange, combination, transfer,preservation, recovery and

1. *The step obtains and use* is well known within organizations. People always seek information and use them later to solve their problems, to take decisions or to create new products. Therefore, new technologies (e.g. Intranet/Internet/Extranet) allow that the large amount of information that flows within organizations can be correctly managed. 2. *The step learn and contribute* are relatively new for organizations. For example, it has been difficult to convince employees to contribute to the organization's knowledge

Fig. 7. The key knowledge capitalization processes (KCPs) in SMEs


### **3. The SMEs knowledge management**

Knowledge management (KM) is the process that is organization and coordination of knowledge from the knowledge of the organization. KM is the set of processes that seeks to

Fig. 7. The key knowledge capitalization processes (KCPs) in SMEs

diversity and multicultural representation lead to creativity.

in management and mainly in knowledge management.

**3. The SMEs knowledge management** 

experts to newly employ.

 *Creating a culture of knowledge sharing:* encouraging learning and improvement; supporting those failing their attempts; upholding a competitive environment and rewarding personal initiative; creating a culture of knowledge sharing from the top of the organization to all its lower levels; enlarging people's knowledge area beyond their field of expertise; setting goals to employees; creating environment for knowledge transfer - such as teamwork, meant especially for knowledge and info transfer from

 *Knowledge acquisition:* keeping all experience gained in every (previous) activity in a knowledge or database; creating a knowledge database comprising the best practice, methods, rules and facilitating communication through e-mail, videoconference, Internet forum, etc.; rewarding employees having good results in the acquisition and accumulation process; equal male and female employment, as well as of foreigners;

 *Measuring creation and knowledge processes:* performing a knowledge quality audit; calibrating customers, providers and partners according to the value of their contribution to the knowledge process; annual balance-sheet including profit and loss in HR terms and a balance of HR investments; discouraging the use of financial indices

Knowledge management (KM) is the process that is organization and coordination of knowledge from the knowledge of the organization. KM is the set of processes that seeks to change the organization's present pattern of knowledge processing to enhance both it and its outcomes (Firestone and McElroy, 2005). Knowledge processes supported by knowledge infrastructures improve individual and team creativity and facilitate innovation (Janev and Vranes, 2005). The processing-driven paradigm of KM has its focus on best practices, training and learning programs, cultural change, collaboration, and virtual organizations (Malhotra, 2005).

The KM processes involves (see in figure 8 the *key knowledge management processes* - KKMPs) (Rosu et al., 2010b):


Fig. 8. The key knowledge management processes (KKMPs) in SMEs

Successful SMEs are those who can leverage their knowledge in an effective and efficient manner, so as to make up for deficiencies in traditional resources, like land, labor, and capital (Desouza and Awazu, 2006).The knowledge of the enterprise contains the sharing knowledge of each individual (Dragoi et al., 2007; 2010). For increase the knowledge in SMEs for an efficient management of the intellectual capital and to improve the business value, we proposes a KM scenario in eleven steps: obtains and uses, learn and contribute, evaluates, sustain, support, exchange, combination, transfer,preservation, recovery and discharge (see figure 9), (Rosu et al., 2008, 2009a, 2009b):


A Knowledge Management Framework as Knowledge Bases

applying existing or new research in decision-making.

process.

resources.

organization.

Knowledge Work Systems.

knowledge before they leave.

management function of the organization.

Development Support to Professional Risk Assessment in SMEs 127

5. *The step support* can be used for the continuous improvement of the product design

6. *The step exchange* represents an intelligence and creativity combination of organization employees to find better solutions to their problem. Knowledge exchange involves interaction between decision makers and researchers or project development teams and results in mutual learning through the process of planning, disseminating, and

7. *The step combination* can be making by means of the Industrial Informatics Systems or

8. *The step transfer* realized by teaching process, e-learning and simulations. At the organization level the knowledge could be found to individual or group (collective)

9. *The step preservation* used for knowledge storing in a warehouse. In this repository, knowledge components, structured and classified, are deposited for further use. 10. *The step recovery* utilized when the organization must re-create knowledge that disappears because documentation isn't adequate or experts don't pass along

11. *The step discharge* excludes any useless knowledge from the organizations knowledge base. However, some knowledge can be more valuable if transferred outside the

**4. Professional risk assessment as part of risk management process in SMEs**  Risk management is the process (see figure 10) of identifying riskand its sources (Gavrilescu, 2009), assessing risk, and taking steps to reduce risk to an acceptable level (Rosu et al., 2010a). Commonly, the risk management process (RMP) includes three phases: *risk identification*, *risk analyses* & *risk feedback*. Risk management process is an important component of a successful project development process (see in figure 11 the project management process). Risk is associated with knowledge resources and infers that problems

In the enterprise, we can distinguish some basic project components (steps) in the development of a project: start of project study, start project planning, start project execution, basic project design ready, project introduction, project monitoring and controlling, release project product, project product acceptance, close project and retrospective investigation of project. The individual parties involved in a project adopt different terminology for describing risks, use different methods and tehniques for dealing with risk analysis and management, producing different and conflicting results (Tah and Carr, 2001). The complex relationship between an employee's knowledge, attitude, and behavior was not sufficiently explored (Khachkalyan et al., 2006). Enterprise project development presupposes knowledge and assumption of multiple risks. In a project, risks are those conditions or events whose occurrence is not certain, but whether they occur may adversely affect the project. The RMP should not be treated primarily as a technical function carried out by the IT experts who operate and manage the IT system, but as an essential

In EU countries there is an experience and good practice both in classifying, identifying, and evaluating risks and in eliminating and reducing those (Botezatu et al., 2008). Among others we can mention that at SMEs level, a lot of attention is paid to: air quality (ventilation

would be caused due to the loss or inadequacy of knowledge (McBriar et al., 2003).

base. New technologies have helped companies easily organize, send and transfer certain types of information. However, the employee has seen this facility as a threat for his/hers own job security. The most difficult task is to convince individuals that their contribution will give return to their organization as well as to themselves.


Fig. 9. A *knowledge management scenario* in SMEs as knowledge bases development support

3. *The step evaluates* indicate that the organization should define its own necessary knowledge for its mission and classify its own currently intellectual capital. In other words, the knowledge manager does more than organize the content in system on-line;

4. *The step sustain or maintain* should assure that the future intellectual capital would maintain the organization viable and competitive. Organizations tend to build their own intellectual capital through their relationships with customers, employees, suppliers etc. The knowledge manager should also be responsible for the maintenance

Fig. 9. A *knowledge management scenario* in SMEs as knowledge bases development support

contribution will give return to their organization as well as to themselves.

he/she should understand and foresee the community's needs.

of the organizations knowledge base.

base. New technologies have helped companies easily organize, send and transfer certain types of information. However, the employee has seen this facility as a threat for his/hers own job security. The most difficult task is to convince individuals that their

