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organizations
Emanuele Lettieri, Francesca Borga and Alberto Savoldelli
Emanuele Lettieri is a Ph.D. Abstract The non-pro®t sector is at present involved in a deep renewal process. Non-pro®t
Student (emanuele.lettieri@polimi.it), organizations are required to deliver tailored and high-quality services in order to overcome
Francesca Borga is a Researcher environmental complexity and scarcity of resources. In this context, non-pro®t organizations are
(francesca.borga@polimi.it), and being called to reengineer their core processes and organizational paradigms. To achieve
Alberto Savoldelli is a Contracting
excellence, all available resources should be managed with increased effectiveness and
Professor (alberto.savoldelli@
ef®ciency, the most important of these being knowledge. This paper contributes to the literature
polimi.it), all in the Department of
about the role which knowledge management plays in achieving excellence in the non-pro®t
Management, Economics and
Industrial Engineering, Politecnico
sector. In particular, the main results from an explorative survey of Italian non-pro®t
di Milano, Milan, Italy. organizations are formalized and discussed.
Keywords Knowledge management, Non-pro®t organizations
Introduction
The non-pro®t sector (also called the ``third sector'') encompasses all the organizations aimed
at creating social value for society as a whole and which do not recognize as their main goal the
creation of pro®t for stockholders. This sector is at present involved in a deep renewal process
that is changing both the structure of the sector and its internal workings (Borzaga and Santuari,
2000; Lester, 1999; Ryan, 1999; Rifking, 1997). Non-pro®t organizations (NPOs) are required to
continuously improve their performance. The demand for services that are integrated, tailored
and timely, urges NPOs to follow new managerial paradigms.
Although this challenge is intuitively understood, neither the implications, nor how to pursue
these goals is clear (Mason and Melandri, 1999; Teebe, 1996). The heterogeneity of the non-
pro®t sector makes it extremely hard to de®ne a general roadmap to achieve excellence: the
de®nition of guidelines that ®t with the speci®c contingencies of an NPO is a utopian ideal; on
the other hand the de®nition of broad guidelines could produce useful hints for the speci®c
NPO. A possible way to solve such a dilemma is to identify which are the levers (success
factors) that promote achievement of excellence. In this view, the ability to manage
appropriately the available assets (knowledge in primis) is one of these factors. The creation
of an organizational culture that promotes knowledge generation, sharing and exploitation
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seems to be a necessary premise in order to create NPOs that are innovative, ¯exible, effective
and ef®cient. Only by identifying and sharing the available knowledge spread across the whole
organization, can each worker operate appropriately, synthesizing in each action he takes all
the experience the whole organization has matured until that moment. In this way, the
experience of each worker (especially the ones who are involved directly in providing services) is
®ltered by the successes and failures acquired by the whole organization.
I cycle
(individual level)
Use
Transfer and
II cycle
(group level) Sharing
Creation
Formalisation
and Diffusion
Integration
IV cycle
(community level) III cycle
(organisation level)
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design and implement knowledge management systems (KMSs) for the NPOs, and fewer
efforts still have been dedicated to research in this ®eld.
On the other hand, more attention has been paid to KM in the for-pro®t sector, where in the last
two decades several scholars have contributed to outlining the theoretical structure of the ®eld.
Two main research streams can be highlighted, which differ depending on the object under
investigation.
The ®rst stream focuses on understanding the concept of ``knowledge,'' emphasizing the
various attributes and formalizing different taxonomies. Knowledge has been de®ned as a range
of information (Zack, 1999; Davenport and Prusak, 1998) through which the single individual is
able to select the most appropriate actions in order to react to external pressures. The
knowledge an individual holds is ®ltered by his mind set and the ®nal form is strictly linked to his
culture and values (Nonaka and Takeuchi, 1995).
More taxonomies have been de®ned. Zack (1999) designs a taxonomy based on nature,
highlighting three main groups: declarative (know what), procedural (know how) and causal
(know why). On the other hand, Nonaka (1991) chooses as a criterion the level of diffusion within
a reference environment and de®nes knowledge held by individuals, groups, a whole
organization and several organizations. Then, Nonaka and Takeuchi (1995) evaluate the level of
formalization (explicit vs. tacit knowledge).
The second main stream focuses on the concept of ``knowing,'' describing the process of KM.
Knowledge is accumulated dynamically (Prahalad and Hamel, 1990); its generation is due to
incremental processes, in which the available information is synthesized with the memory of
both the individual and the organization. The models present in literature focus on two different
issues: on the one hand the focus is on the identi®cation of the phases that make up the
knowledge ¯ow, and on the other hand the focus is on the contextual factors that enable the
¯ow.
Within the ®rst group, Bollinger and Smith (2001) describe organizational knowledge as a key-
asset that fosters the achievement of a competitive advantage. Bhatt (2001) argues core
competences grow from the symbiotic relationship between foreground knowledge (easy to
get, to codify, to imitate) and background knowledge (tacit and not easily transferable). Sarvary
(1999), focusing on consultancy companies, highlights that KM is a business process through
which a company creates and exploits its own knowledge (both institutional and collective).
Zack (1999) focuses on the management of explicit knowledge, researching the resources that
are necessary to manage it.
Besides formalizing the phases that build knowledge ¯ow, some scholars studied the external/
internal factors that can foster or hamper that ¯ow (that is often not spontaneous) both at an
individual and collective level. Von Krogh (1998) highlights how important it is to take care of the
informal relationships within a company to boost knowledge dissemination and sharing among
the workers. Lang (2001) argues that human relationships are one of the key-enabler factors for
a KM strategy and demonstrates how these relationships are strictly linked to the organizational
culture (according to the concept of an entrepreneurial-administrative continuum). Inkpen
(1996) analyses how knowledge is created and spread among a network of enterprises linked
by partnerships. Some factors which can boost KM are the de®nition of ¯exible targets for
education, the commitment of top management, a culture based on trust, a tolerance of
redundancy, the existence of a creative chaos and myopia towards pro®t-related performance.
Leonard and Sensiper (1998) commit themselves to researching the role tacit knowledge plays
in team-creativity and innovation, and formalizing the concept of ``creative abrasion.'' KM is
enabled by metaphors and high levels of abstraction, whose meaning is understood only at a
tacit level. Kim and Mauborgne (1997) recognize that both knowledge creation and sharing are
intangible activities, which should not constrained by strict controls since they only come about
when people cooperate on a voluntary basis. In this view, they introduce the concept of ``fair
process'' since people want (and need): their ideas to be evaluated and managed seriously;
and the evaluation criteria to be transparent and well known. Trussler (1998) argues that an
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Figure 2 The role of KM in performance improvement and in achieving excellence
SOCIAL VALUE
CREATION
SUSTAINABILITY EFFECTIVENESS
IN THE & REPUTATION
MID-RUN PERIOD & IDENTITY & AWARENESS
COMMUNITY
MANAGEMENT
& FINANCIAL
ECONOMIC
STRATEGY
NEEDS
& VISION
COMMUNITY
BUILDING
SERVICE MAINTENANCE
& PROCESS DURING
EFFICIENCY THE TIME
ASSET
MANAGEMENT
(3) ``social value creation'' is the ability to deliver social values, pursuing a high-quality outcome;
(4) ``asset management'' is the ability to manage all resources ± tangible and intangible (such
as knowledge) ± available within the network of local branches; and
(5) ``economic/®nancial viability'' is the ability to survive in the medium or long term.
According to this model, the main bene®ts that a KM strategy can address in an NPO are:
J a major ``gluing'' effect on the members of the need-driven community ± a unique and usable
knowledge on the part of the actors and the increased identi®cation with and awareness of
the objectives of the NPO;
J an empowered capability to create social value, from the ability to translate into practice all
the experience developed during the previous years;
J a higher operative and allocative ef®ciency, because of a deeper understanding of how the
NPO works, how the processes work and which level of performance could be achieved;
J an improved ability to maintain in the medium and long term coherence between the vision
and the short-term programs; and
J an enhanced ability to both manage and enlarge a need-driven community, pursuing
coherence between the skills/knowledge required and the skills/knowledge available, setting
realistic development plans.
The model that Quagli (2001) proposed indicates how knowledge ¯ows within an NPO, from the
single person to the whole community. However, such a process is not spontaneous; to
achieve positive and lasting results an NPO has to steer and support it through proper KM
interventions.
2–Codification
organisation
3–Storage
1–Acquisition - Evaluation 4–Retrieval
Tacit - Formalisation Systems
- Homogeneisation to store
Explicit knowledge - Definition
knowledge of simple
and efficient
rules
Technological
Infrastucture
External
souces 7–Creation 6–Application 5–Diffusion & Presentation
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`` Acomprehensive
KM strategy must be coherent and integrated with a
strategy whose goal is to pursue
excellence.
''
community, it is easy to note that ¯exibility is another important characteristic of a KM system for
NPOs.
After that, knowledge can ®nally be applied, that is to say transformed into action and used for
NPO activities. In doing so, the organization accumulates new experiences, interacts with other
subjects and generates new ideas and, through this, it is able to create new knowledge for
nourishing and restarting the whole process. In this sense, the creation activity includes also
knowledge integration, as de®ned in the previous paragraph.
On the whole, the knowledge path is indeed a cyclical process that activates and nourishes
itself. In each step of this path, different members of the NPO's community could participate,
but normally the ``operative'' activities (knowledge acquisition, codi®cation, storing and
retrieving) are managed at organizational level, while the activities of diffusion, application and
creation should involve all the members of the community.
A key issue is to map the knowledge spread within an NPO, highlighting the core knowledge
and its critical attributes. To achieve this goal a speci®c grid was de®ned, matching three
orthogonal dimensions (Figure 4):
(1) the nature, distinguishing tacit vs. explicit knowledge (the latter split into codi®ed or not),
(Nonaka and Takeuchi, 1995; Zack, 1999);
(2) the level of diffusion, distinguishing between whether the knowledge is held by individuals or
groups (Nonaka, 1993); and
(3) the holders of knowledge, recognizing three main clusters (volunteers, employees and
managers) inside an NPO ± all the other members of the NPO's community which are
outside of the NPO's boundaries are rejected, being out of the scope of this research.
The speci®c position within the grid clari®es the main characteristics of the different knowledge
typologies within an NPO. The ideal con®guration is when knowledge is mainly held at group
level and is codi®ed, in order to reduce as much as possible the dependence on speci®c
TARGET
Explicit
Codified
Non
Tacit
TARGET
Main
Main from Main from Main from Main from Main from
Holders from
volunteers managers volunteers employees managers
employees
At an individual level Shared among groups
Knowledge Level of Diffusion (Epistemology)
Sector of activity Social services Social services Social services Social services
Status Association of volunteers Trust of trusts ?? of Research-aimed foundation Association of
cooperatives volunteers
Main activities Nursing and entertainment Coordination and support of Support, research sensitivity Help for families and
for children in hospital the trusts of cooperatives towards anxiety, depression the needy
Year of foundation 1978 1987 1993 1842
No. of persons About 4,000 About 23,000 About 300 About 19,600
Persons typology Mainly volunteers Mainly employees Mainly volunteers Only volunteers
No. of branches 52 local branches 5 trusts and 900 7 local branches 1,921 local branches
cooperatives
Life cycle position Development Maturity Creation Maturity
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NPOs, but in IDEA, where it is individually-held. Knowledge about KM itself belongs to this
cluster.
(3) Teaching/training knowledge: i.e. the knowledge about how to train and update the skills
of both employees and volunteers. This knowledge is critical for the NPOs characterized by
a high-level of volunteer-turnover rates. It is usually formalized and held at group level;
(4) Fund raising/public relation management (PRM)/marketing knowledge: i.e. the
knowledge required to both de®ne and manage relationships with the providers of ®nancial
resources, like partners, private sponsors, ®rms and local authorities;
(5) Operational knowledge: i.e. the knowledge utilized in daily activities; it is heterogeneous
and speci®c to the single NPO: it varies between socio-healthcare notions to the under-
standing of the issues of deprived-areas, from ways of re-introducing (disagiate)
disadvantaged workers (like ex-prisoners) into the labor market to techniques to support
and entertain children that are in hospital for long periods.
(6) Miscellaneous, non-characteristic knowledge: i.e. the knowledge continually acquired
from external sources ± above all from the volunteers ± and related to the life/background of
each operator. It is always in a non-explicit format and it is often neglected.
The full set of knowledge found in the four NPOs is synthesized in Table II, using the previous
taxonomy. The proposed categories cover with adequate precision the spectrum of knowledge
spread over the whole network of NPOs.
The above taxonomy is speci®c for the non-pro®t sector and is related to the taxonomies
proposed in the literature (Zack, 1999; Blacler, 1995). The latter typology ± miscellaneous and
non-characteristic knowledge ± is different from the previous ones. It collects all the knowledge
held by each individual that are not directly linked to the activities of a speci®c NPO. This
knowledge is a creative mean for the NPOs; although it is often ignored and its exploitation is
neglected, it can foster the achievement of radical performance improvements through
innovative solutions. The value of this knowledge is that people spend only a small part of their
spare time working in the NPOs, while they spend a large part developing other knowledge in
other activities (related to their job, recreation time, hobbies, etc.). So the NPOs are able to
C (1-2-3-5) C (2-3)
I (1) I (5) I (3)
Explicit
V(1) V (2-3-5)
A (2) A (3) A (2-4)
Codified
Non
C (2-5) C (5)
I (2-4) I (5) I (3)
V (5) V (2-4)
A (2)
Tacit
C (3-6) C (2)
I (6) I (6)
V (2-6) V (6)
Main from Main from Main from Main from Main from Main from
Holders
volunteers employees managers volunteers employees managers
At an individual level Shared among groups
Knowledge Level of Diffusion (Epistemology)
Key:
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Figure 6 The knowledge management process in the organizations analyzed
ABIO
Accounting/ Cons. CGM
Administrative Fond. IDEA
S. Vincenzo
ABIO
Managerial/ Cons. CGM
Organisational Fond. IDEA
S. Vincenzo
ABIO
Teaching/ Cons. CGM
Training Fond. IDEA
S. Vincenzo
Fund Raising/ ABIO
Public Relation Cons. CGM
Mgmt Fond. IDEA
Marketing S. Vincenzo
ABIO
Cons. CGM
Operational
Fond. IDEA
S. Vincenzo
ABIO
Miscellanea Cons. CGM
Non-characteristic Fond. IDEA
S. Vincenzo
Codification
Presentation
Distribution
Acquisition
Utilisation
Retrieval
Creation
Storage
Table III Most frequent problems and suggested actions for organizations analyzed
Knowledge Problem Action Expected results
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(2) Set of values: according to the case study, NPOs seem to be in¯uenced by the ethical or
cultural way of thinking of the particular historical-social context in which they were created
and operate. These roots in¯uence the KM process, creating a culture more or less
favorable to the introduction of ad-hoc KM solutions. For instance, the set of values behind
San Vincenzo obliges anonymity and secrecy among the volunteers: such a mind-set is
surely an insuperable barrier to knowledge sharing.
(3) Judicial status and context of activity: the NPO judicial status de®nes the boundaries of
its range of action, and, as a consequence, it in¯uences the sensibility of the governing
board towards KM issues. The NPOs which operate in a context nearer to the for-pro®t one
(such as social cooperatives) seem to be better disposed to design and develop speci®c KM
strategies than NPOs operating in contexts farther away from the rules typical of the pro®t
sector (such as volunteers' associations).
(4) Hierarchical network structure and level of autonomy: KM depends also on the internal
structure of the network of branches. NPOs characterized by low levels of autonomy, with a
centralized power structure, where the value-added activities are managed directly by the
headquarters, are less interested in KM issues; while the NPOs characterized by a network
of peer branches, with a high level of autonomy, pay more attention to KM (in particular to
sharing good practices), being more sensitive to communication ef®ciency and effective-
ness.
(5) Governing board background and operators' average age: KM methods are more
common in NPOs with more managers coming from the for-pro®t sector than in others. This
is probably due to the major experience of these managers in such issues, but also to a
minor suspicion towards solutions coming from the for-pro®t context.
(6) Operators average age and turnover: these factors in¯uence mainly the attitude to
change of a NPO. The introduction of KM solutions is more dif®cult when the age of the
operators is older or their permanence in the organization is longer, especially if relevant
changes on procedures and new IT infrastructure are required.
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