A REFERENCE MODEL FOR KNOWLEDGE RETENTION

WITHIN SMALL AND MEDIUM-SIZED ENTERPRISES

Quang Minh Doan

, Camille Rosenthal-Sabroux

and Michel Grundstein

1,2

Paris Dauphine University, Lamsade CNRS, UMR7024, F-75016, Paris, France

MG Conseil, Nogent sur Marne, 94130, France

Keywords: Critical knowledge, Crucial knowledge, Knowledge retention (KR), Reference model for knowledge

retention within SMEs (KR-SME).

Abstract: Knowledge retention (KR) has been identified as one of the critical factors for maintaining sustainable

performance. However, until recently, most of the existing researches have focused on large organizations,

while very few studies have mentioned this issue in Small and Medium-Sized Enterprises (SMEs). To

redress some of this imbalance in the literature, this paper provides a reference model for knowledge

retention within SMEs. This model includes most of the fundamental elements that are believed to be

critical for an effective KR implementation. The model is especially tailored for SMEs to kick-start a KR

initiative in their organization as well as can be served as a template to assess the SMEs’ KR maturity level.

1 INTRODUCTION

For organizations in today’s modern economy,

knowledge is regarded as one of the elements to gain

sustainable competitive advantage over competitors.

Those organizations that are “continuously

learning,” adaptive and agile will be the most likely

to survive. Part of reaching that goal is based on

harnessing and leveraging the human capital in the

organization. That is where knowledge retention

(KR) and transfer techniques can be used to capture,

share, apply, leverage and possibly create

knowledge before employees leave the organization,

or to onboard new employees to quickly get them up

to speed. Organizations that are embracing

knowledge retention activities are gaining a

competitive advantage (Liebowitz, 2011).

Knowledge retention and transfer is an area that

holds great potential for companies in terms of

reducing the costs associated with turnover, and

perhaps more important, in sustaining business

performance (Manpower Inc., 2010). Due to this

fact, today’s SMEs are more and more concerned

with KR as a key factor for improving their

efficiency and competitiveness for the reason that

they are often more vulnerable than larger

organizations in terms of losing key personnel.

Consequently, a KR model for SMEs is necessary

since most of the existing KR researches have

mainly focused on solutions to mitigate the impact

of critical knowledge loss in large organizations.

The objective of this paper is to propose a

reference model for knowledge retention within

SMEs (KR-SME). This model includes most of the

fundamental elements that are believed to be critical

for an effective KR implementation. The model is

especially tailored for SMEs to kick-start a KR

initiative in their organization as well as can be

served as a template to assess the SMEs’ KR

maturity level. In order to achieve this purpose, a

systemic and comparative scientific literature

analysis was selected to investigate and synthesize

the most critical factors that influence knowledge

retention effectiveness in organizations in general

and within the context of SMEs in particular.

The remainder of this paper is structured as

follows. Firstly, an overview of the background

theory in knowledge retention is presented.

Secondly, the existing studies, frameworks, and

models that have already identified the key factors

potentially affecting SMEs’ KR success are

analyzed. Finally, the reference model for

knowledge retention within SMEs is developed.

306

Minh Doan Q., Rosenthal-Sabroux C. and Grundstein M..

A REFERENCE MODEL FOR KNOWLEDGE RETENTION WITHIN SMALL AND MEDIUM-SIZED ENTERPRISES.

DOI: 10.5220/0003632003060311

In Proceedings of the International Conference on Knowledge Management and Information Sharing (KMIS-2011), pages 306-311

ISBN: 978-989-8425-81-2

 2011 SCITEPRESS (Science and Technology Publications, Lda.)

2 BACKGROUND THEORY

2.1 Critical Knowledge

Kaplan (2010) defined critical knowledge as

knowledge that is fundamental to the business or

operational processes of the organization that

support mission delivery and mission success.

According to this point of view, critical knowledge

is often related to the activities of the target business

processes within organizations.

(Jung et al., 2007) also confirmed that, for

organizations, it is important to focus on process-

related knowledge which is created and used within

a business process and can be used by activity

performers when a business process is actually

executed. The concept of process-related knowledge

will also enable enterprises to filter valuable

knowledge and to avoid information overload.

(Similarly et al., 2008) introduced the concept of

crucial knowledge, which is the knowledge (explicit

or tacit) that is essential for decision-making and the

progress of value-adding processes. The reasons for

this type of knowledge is considered crucial are due

to its vulnerability (scarcity, accessibility, cost and

delay of acquisition) and its influence on the

company’s life, markets and strategy. Moreover, the

authors also developed a constructivist and learning

approach (namely GAMETH

)

to identify and locate

crucial knowledge.

Based on the discussion above, in this paper, the

two notions critical and crucial knowledge are

considered often related to the activities of business

processes within organizations and can be somewhat

interchangeable.

2.2 Knowledge Retention

According to Kirsch (2008), knowledge retention is

about focusing on the critical knowledge that is at

risk of loss, prioritizing what is at risk based on

potential knowledge gaps and their impact upon

overall organizational performance, and then

developing actionable plans to retain that

knowledge.

The following are three specific questions that

must be asked when considering knowledge

retention and any potential risk of loss of

knowledge:

1. What knowledge may be lost?

2. What are the organizational consequences of

losing that knowledge?

3. What actions can be taken to retain that

knowledge?

One of the most significant challenges for any

organization is to get on the “front edge” of any

potential knowledge retention challenge rather than

waiting until organizational knowledge “walks out

the door” (or is walking toward the door, such as in

typical “exit interview” efforts to retain knowledge).

The organization should focus knowledge harvesting

efforts on obtaining as much information about its

projects and processes, including the implicit

knowledge that is often not directly documented.

A key reason for performing knowledge

retention is to grow the institutional memory of the

organization. In this manner, employees can learn

from past successes and failures to ensure positive

results. Learning from others could help avoid going

down the wrong paths or reinventing the wheel

(Liebowitz, 2009).

Knowledge retention is an important part of

knowledge management. According to Daniel Alpert

at the University of Oklahoma, knowledge retention

strategies improve innovation, organizational

growth, efficiency, employee development, and

competitive advantage. At the UNESCO meeting on

High Level Group of Visionaries on Knowledge

Acquisition and Sharing, which met in June 2007,

they stressed the need for improved knowledge

acquisition models and strategies (Liebowitz, 2009).

3 KEY SUCCESS FACTORS

In this section, the existing studies, frameworks, and

models related to knowledge management in general

and knowledge retention in particular are analyzed

to synthesize the key factors potentially affecting the

success of knowledge retention process within the

context of SMEs.

A wide range of success factors for a knowledge

management implementation have been identified in

the literature. One of the earliest studies of

knowledge management critical factors was

presented by Skyrme and Amidon (1997). They

highlighted seven key success factors, including a

strong link to business imperative, a compelling

vision and architecture, knowledge leadership,

knowledge creating and sharing culture, continuous

learning, a well-developed technology infrastructure

and systematic organizational knowledge processes.

Davenport et al. (1998) conducted a study to

explore the practices of 31 KM projects in 24

companies, with the aim of determining the factors

associated with the effectiveness. For those projects

that were considered successful, eight major factors

were identified. These factors included linking

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307

knowledge management to economic performance or

industry value, a clear purpose and language, a

standard and flexible knowledge structure, multiple

channels for knowledge transfer, culture, technical

and organizational infrastructure, change in

motivational practices, and senior management

support.

In the same way, Liebowitz (1999) proposed six

key factors for making KM successful in

organizations. He suggested the need for a KM

strategy with support of senior management, a Chief

Knowledge Officer (CKO) or equivalent and a

knowledge management infrastructure, knowledge

ontologies and repositories, knowledge management

systems and tools, incentives to encourage

knowledge sharing, and supportive culture.

In order to develop a conceptual framework for

knowledge management, Stankosky and Baldanza

(2000) have considered organization, technology,

leadership and learning as the four pillars of KM.

Similarly, (Chourides et al., 2003) highlighted

five critical factors for KM namely, strategy, human

resource management (HRM), information

technology, quality, and marketing.

Likewise and Mathi (2004) proposed four factors

which determine knowledge management success in

an organization including culture, knowledge

management organization, systems and information

technology infrastructure, effective and systematic

processes and measures.

Wong and Aspinwall (2005) empirically

identified eleven critical success factors for adopting

knowledge management within SMEs, including

management leadership and support, culture,

strategy and purpose, resources, processes and

activities, training and education, human resource

management

, information technology, motivational

aids, organizational infrastructure, and

measurement. According to the authors, these

factors were ranked based on the levels of their

importance influencing SMEs in adopting KM.

Consequently, it is easy to recognize that top

management support, culture, and strategy were

considered as the most important factors, while

organizational infrastructure and measurement were

believed to have lower influence on the KM

adoption within SMEs. This finding also supports

their opinion when these researchers believed that

SMEs will have distinct advantages for

implementing KM since their structures are often

simple, flatter, and not very complex compared to

large organizations (Wong and Aspinwall, 2004).

Grundstein (2008) presented a model for general

knowledge management within the enterprise

(MGKME). This model was composed of two main

categories of elements: (i) the underlying elements

consist of socio-technical environment, and value-

adding processes; (ii) the operating elements focus

on the underlying elements (managerial guiding

principles, ad hoc infrastructures, generic

knowledge management processes, organizational

learning processes, and methods and supporting

tools). Socio-technical environment constitutes the

relations and interactions between information and

communication technologies, structure and people.

Recognizing the importance of KM to the

economies of its member countries, and in particular

its importance to SMEs, the Asian Productivity

Organization (APO) commissioned a fact-finding

mission to leading KM institutions and practitioners

in Europe and the USA in May 2007 to study the

latest trends and developments in KM and to share

their best practices with the rest of Asia. Following

that mission, an Expert Group was convened to

formulate an APO KM framework that would be

practical and easy to implement specifically in the

Asian SME context (Nair and Kamlesh, 2009). In

this framework, four success factors were identified

namely leadership, processes, people, and

technology.

In order to investigate the drivers of knowledge

worker retention, Nelson and McCann (2010)

conducted an empirical study in 150 organizations

including SMEs and large enterprises, operating in a

wide range of industries, and mostly located in the

United States, Canada, and Europe. The result

showed that strategic knowledge orientation,

learning culture, and HR practices are three critical

factors directly effecting on the successful retention

of knowledge workers within companies.

Recently, Kong et al. (2011) have suggested that

companies should take a strategic approach in

developing HR practices enabling the development

of knowledge and learning capabilities to foster

organizational innovation. These researchers claim

that HR practices play a key role in retaining

organizational knowledge. This point of view has

also been supported by a large numbers of scholars

since they have argued that knowledge is dependent

on people and therefore KM must be related to HR

practices, such as recruitment and selection,

education and development, pay and reward, and

performance management (Carter and Scarbrough,

2001); (Hunter et al., 2002); (Evans, 2003); (Currie

and Kerrin, 2003).

After systematically reviewing and analyzing the

studies mentioned above, especially based on the

findings of recent empirical researches, the authors

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have summarized and classified the most important

factors potentially influencing the success of the

knowledge retention process within SMEs in five

main categories as follows: top management

support, knowledge retention strategy, learning

culture, human resource practices, and information

and communication technology (ICT) tools.

The list below presents the factors together with

their sources:

1. Top Management Support (Skyrme and Amidon,

1997); (Davenport et al., 1998); (Liebowitz, 1999);

(Stankosky and Baldanza, 2000); (Wong and

Aspinwall, 2005); (Nair and Kamlesh, 2009).

2. Knowledge Retention Strategy (Skyrme and

Amidon, 1997); (Davenport et al., 1998);

(Liebowitz, 1999); (Chourides et al., 2003); (Wong

and Aspinwall, 2005); (Grundstein, 2008); (Nelson

and McCann, 2010).

3. Learning Culture (Skyrme and Amidon, 1997);

(Davenport et al., 1998); (Liebowitz, 1999);

(Stankosky and Baldanza, 2000); (Mathi, 2004);

(Wong and Aspinwall, 2005); (Grundstein, 2008);

(Nelson and McCann, 2010).

4. Human Resource Practices (Carter and

Scarbrough, 2001); (Hunter et al., 2002); (Evans,

2003); (Currie and Kerrin, 2003); (Chourides et al.,

2003); (Wong and Aspinwall, 2005); (Grundstein,

2008); (Nair and Kamlesh, 2009); (Nelson and

McCann, 2010); (Kong et al., 2011).

5. ICT Tools (Skyrme and Amidon, 1997);

(Davenport et al., 1998); (Liebowitz, 1999);

(Stankosky and Baldanza, 2000); (Chourides et al.,

2003); (Mathi, 2004); (Wong and Aspinwall, 2005);

(Grundstein, 2008); (Nair and Kamlesh, 2009).

4 KR-SME MODEL

Based on the discussion above, a reference model

for knowledge retention within SMEs (KR-SME)

has been developed (Figure 1). The model includes

the key elements that are believed to be critical for

fostering and facilitating the knowledge retention

process within organizations.

The main elements of the KR-SME model,

including knowledge retention process; top

management support; KR strategy; learning culture;

HR practices; and ICT tools, are explained as

follows:

 According to Wright (2007), knowledge

retention process consists of three stages: (i)

initiation - organizations will indentify

positions/individuals where the potential for critical

knowledge loss is greatest and most imminent; (ii)

implementation - organizations will address the

potential critical knowledge loss as well as will

develop and implement knowledge retention plans.

At this stage, the process-related knowledge that is

at risk of loss will be captured, transferred, stored,

and reapplied effectively; (iii) evaluation -

organizations are able to monitor the status of the

implementation of knowledge retention process and

evaluate the success of knowledge retention plans in

accomplishing stated goals. It is also necessary to

assess the impact of knowledge retention process on

overall organizational performance.

Figure 1: Model for Knowledge Retention within SMEs.

 Top Management Support refers to the degree

to which top managers acting as role models when

participating in knowledge retention activities and

establishing all the necessary conditions for

knowledge retention process as well as will provide

additional resources if considered necessary.

 Knowledge Retention Strategy consists of four

main constructs: alignment with business strategy,

transparency, feasibility, and flexibility. Alignment

with business strategy refers to the degree to which

knowledge retention strategy is supporting business

strategy. Transparency refers to the extent to which

the objectives, goals, and action plans for knowledge

retention process are expressed clearly. Feasibility

refers to degree of success when implementing

knowledge retention plans based on the existing

A REFERENCE MODEL FOR KNOWLEDGE RETENTION WITHIN SMALL AND MEDIUM-SIZED ENTERPRISES

309

resources and culture of organizations. Flexibility

refers to the extent to which knowledge retention

strategy can be adapted when having the change in

business environment.

 Learning Culture is characterized by four main

constructs: teamwork, collaboration, adaptability,

and solidarity. Teamwork refers to the degree to

which people in an organization are encouraged to

work in team. Collaboration is a degree of active

support and help among individuals within an

organization (Lee and Choi, 2003). Adaptability

refers to the extent to which individuals expresses

their attitude toward learning, takes risk and creates

change (Fey and Denison, 1999). Solidarity refers to

the degree to which members of an organization

share goals and tasks (Goffee and Jones, 1996).

 Human Resource Practices comprise five main

constructs: staffing, job design, performance

appraisal systems, reward and compensation

systems, and training and development. Staffing

refers to the extent to which companies consider

person-environment fit to ensure congruence of

individual and organizational values and goals that

will facilitate knowledge sharing among employees

when conducting recruitment and selection

procedures (Cabrera and Cabrera, 2005). Job design

refers to the degree to which employees will be

assigned to positions that are consistent with their

skills and abilities since it can influence workers’

motivation, and opportunities to use their knowledge

(Kelloway and Barling, 2000). Further more; team-

based work design can increase social interactions

among team members which is likely to facilitate

knowledge sharing behavior. Performance appraisal

systems refer to the extent to which companies

evaluate individual performance when considering

knowledge sharing ability as one of the main

performance criteria. Reward and compensation

systems refer to the degree to which people who

involve in knowledge transfer activities will be

recognized and rewarded. Training and development

refer to the extent to which employees will be

provided great opportunities for personal growth and

career advancement.

 ICT Tools refer to the extent to which ICT

applications can be used to facilitate the process of

knowledge retention.

The KR-SME model can provide a holistic view and

better understanding of how the knowledge retention

could be practiced within SMEs. Furthermore, it also

can be used as a reference model for effectively

implementing the knowledge retention process in

small and medium-sized companies.

5 CONCLUSIONS

In today’s business environment, knowledge

management in general and knowledge retention in

particular are considered as the main source of

competitive advantage for any type of organizations,

especially for those belonging to the SME sector

since they are often more vulnerable than larger

organizations in terms of losing key personnel.

However, it seems that knowledge retention

specifically in the context of small and medium-

sized enterprises has not attracted much research

efforts as little information is available about the

knowledge retention within SMEs. Due to this fact,

this paper attempts to fill some of the gap in the

literature by providing the reference model for

knowledge retention within SMEs (KR-SME).

This model includes most of the fundamental

elements that are believed to be critical for an

effective knowledge retention implementation,

including knowledge retention process; top

management support; knowledge retention strategy;

learning culture; human resource practices; and

information and communication tools. The model is

especially tailored for SMEs to kick-start a

knowledge retention initiative in their organization

as well as can be served as a template to assess the

SMEs’ KR maturity level.

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