5.9. Organizational and managerial impacts
There are always a number of organizational and managerial impacts related to the integration of KM and EC. Managerial impacts include issues such as approaches to managing knowledge and distributing the organization's intelligence. Areas that deserve attention include productivity, improved decision making, and impacts on organizational structure. Some potential effects on employees include psychological factors, fear of unemployment, and user resistance to change. There are also ethical and legal issues, such as who owns the knowledge, possible liability for distributing knowledge, the basis and domain of liability for controlling the knowledge, ethical use of knowledge, and the privacy of the knowledge.
5.9.1. Reducing user resistance
KM is a complex process. To integrate KM and EC creates even more complexity, and it can be difficult for users to learn all the related tools, techniques, and applications. Users may need to understand entire sets of functions and features about diverse components such as knowledge management (including knowledge acquisition, knowledge representation, and knowledge engineering), data warehousing, data mining, Internet/web tools, and applications. As a result, adequate training about KM and EC can help increase user acceptance of the new technologies, and thereby reduce user resistance.
5.9.2. Impacts on organization structure
Traditional KM models over-emphasize operations that are often institutionalized in the form of best practices. The new model (adapted from Malhotra [4]) is expected to break this paradigm. Traditional business logic was based on a high level of structure and control, but the dynamics of the emerging e-business environment demand a different organization design, one that assumes considerable freedom with few rules. Designers of organizational KM systems can facilitate the proactive e-business organization. Not only would the organization's members define problems for themselves and generate their own possible solutions, but these knowledge workers would also evaluate, assess, revise, and improve their own solution-generating processes. By explicitly encouraging experimentation and re-thinking of assumptions, this strategy promotes reflection-in-action and creation of new knowledge. Instead of the traditional emphasis on best practices that have been archived in databases, this strategic focus encourages continuous pursuit of better practices that are closely aligned with the changing e-business environment [4].
5.10. Change in the organizational knowledge processes
Greater proactive involvement of knowledge-worker (i.e. employee) creativity and innovation is needed in organizational processes to facilitate better decision making in e-business initiatives. Effective KM in unstable business environments requires imaginative suggestions rather than hard, documented, stereotypical answers. In the past, the development of information systems has emphasized defining optimal programmed logic and then executing instructional cycles to achieve the highest efficiencies. However, today's increasingly dynamic business environment mandates that greater emphasis be placed on ensuring that the right things are being done (effective outcomes) rather than on doing the things correctly (efficient processes) [4].
Emphasis should focus on continually renewing existing knowledge, creating new knowledge, and effectively using that knowledge in e-business practices. This is certainly superior to the old paradigms of archiving data and information in organizational databases that tend to ignore the associated human interpretations of context and content. The traditional information-processing model assumes a problem as given and the intended solution as based on some pre-specified understanding of the business environment. However, a strategic focus constructs (and reconstructs) even the problem definition from knowledge available at a certain point in time [4].
5.11. Changes in the economics of organizational knowledge assets
Malhotra [4] explains Peter Drucker's argument that in the emerging electronic economy, knowledge is the primary resource for individuals and for the economy overall [22]. Land, labor, and capital-the economy's traditional factors of production-are certainly still factors, but they become secondary resources. These traditional factors of production are limited, as every marginal increase in land, labor, and/or capital results in diminishing returns on additional investment. In contrast, information assets and knowledge capital seem to follow a different law of economic returns; that is, investment in every additional unit of information or knowledge created and used can result in a higher return. This phenomenon is often attributed to externalities of the network because the strength and utility of the network increases with it growing membership [4].