Three Knowledge Management Strategies: Knowledge Hierarchies, Knowledge Markets, and Knowledge Communities

This work examines the use of markets, hierarchies, and communities that are internal to the firm and the focus is the knowledge management strategy rather than the user per se.

Abstract

We draw on the “fundamental theory of the firm” to present three distinct knowledge management strategies: a knowledge hierarchy, a knowledge market, and a knowledge community. Most firms will use one strategy for some knowledge needs and a different strategy for other knowledge needs. All three strategies deliver knowledge by blending people-to-document (codification) and people-to-people (personalization) approaches, depending on the nature of the knowledge. A knowledge hierarchy views knowledge as a formal organizational resource. It manages knowledge creation, development, and reuse through deliberate, authority-based processes, using the traditional management hierarchy of a welldefined organizational unit. This knowledge hierarchy strategy is best suited for rapidly changing knowledge where the goal is to substitute expert knowledge for the knowledge of less experienced people.A knowledge market treats knowledge as an individual resource. It manages knowledge creation, development, and reuse through organizational policies that encourage knowledge sharing. This knowledge market strategy is best suited for knowledge that evolves slowly and where the goal is to augment the knowledge of experts.A knowledge community views knowledge as a communal resource. It manages knowledge creation, development, and reuse through informal, trust-based processes within a group of individuals. They share a common interest, but they are often spread throughout the firm. This knowledge community strategy is best suited for moderately changing knowledge where the goal is to augment the knowledge of experts.