Knowledge management adoption in times of crisis
| Pages | 445-462 |
| Date | 24 April 2009 |
| Published date | 24 April 2009 |
| DOI | https://doi.org/10.1108/02635570910948605 |
| Author | Wei‐Tsong Wang |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Knowledge management adoption
in times of crisis
Wei-Tsong Wang
Department of Industrial and Information Management,
National Cheng Kung University, Tainan, Taiwan
Abstract
Purpose – Organizations are threatened by business crises that may be prevented or lessened if
critical knowledge is identified in advance. The purpose of this paper is to enhance the understanding
of the role knowledge management (KM) plays in affecting organizational performance during crises.
Design/methodology/approach – A case study of a business crisis was conducted to investigate
how KM helped mitigate damage caused by the crisis.
Findings – First, KM plays an important role in crisis management. Second, organizations have
different knowledge needs that require the application of different KM strategies at different phases of
a business crisis to achieve the best results. Finally, the experience handling crises makes
organizations consider their incompetence and thus leads to the generation of organization-wide
learning initiatives which facilitate knowledge acquisition, sharing, and institutionalization.
Practical implications – The proposed knowledge-centered crisis management framework can be
used by organizations as guidelines to develop their KM strategies based on their concerns during
business crises.
Originality/value – Few prior studies have specifically addressed the role KM plays when
encountering business crises. This study focuses on investigating how organizations can apply useful
KM strategies based on their knowledge needs and thus achieve desirable crisis management
outcomes.
Keywords Knowledge management, Problem solving,Disasters, Corporate strategy
Paper type Research paper
1. Introduction
Organizations are threatened by business crises that may be prevented or lessened if
critical knowledge is identified in advance. Many frameworks have been proposed for
helping organizations deal with crises (Pearson and Rondinelli, 1998; Richardson, 1994;
Salter, 1997). While these frameworks offer organizations valuable guidelines for
managing crises, they typically overlook the importance of knowledge in the
organizational performance during crises.
It is proposed that knowledge management (KM) has a role to play in crisis
management. Nevertheless, very few studies have been conducted to specifically
examine the influence of the application of KM to crisis management on organizational
performance. Consequently, this study aims to examine how KM practices affect
organizational performance during business crises. A knowledge-centered crisis
management framework that can help organizations apply KM concepts during crises
The current issue and full text archive of this journal is available at
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The author thanks the studied company for providing precious data. The author also thanks the
reviewers for their valuable feedback on this paper. This study was funded by the National
Science Council, Taiwan (project number: NSC95-2416-H-006-050).
Knowledge
management
adoption
445
Received 29 October 2008
Revised 6 January 2009
Accepted 20 January 2009
Industrial Management & Data
Systems
Vol. 109 No. 4, 2009
pp. 445-462
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/02635570910948605
is presented. A case study of an energy company’s crisis is presented to demonstrate
how this framework can help organizations become less vulnerable to business crises.
2. Business crises
2.1 Nature of business crises
From the perspective of organizational management, academics contend that natural
(e.g. hurricanes) and socio-technical (e.g. air crashes) disasters are different from
business crises for two reasons (Richardson, 1994; Turner and Pedgeon, 1997). First,
disasters can be natural or man-made events, or both, while business crises are solely
man-made events. Second, disasters involve threats of injury and loss of human lives,
while business crises damage the quality of personal, social, and work lives of
individuals. Nevertheless, disasters can be viewed as a source from which business
crises may develop (Shaluf et al., 2003). To conclude, business crises can be defined as
man-made events with the characteristics of low frequency and high consequence
(Hensgen et al., 2003) that can significantly hinder organizations from continuing to
operate successfully. An example of business crises is the collapse of Barings Bank
(Sheaffer et al., 1998).
Additionally, Salter (1997) argues that risk is a function of the degree of
susceptibility and resilience of a social system to hazards. Risk management can thus
be defined as a systematic application of management practices to identifying,
analyzing, treating, and monitoring uncertainties to better advise crisis management
(Robert and Lajtha, 2002; Salter, 1997). Risk management, as an important part ofcrisis
management, must be supplemented by more techniques to help organizations plan for
their crisis management (Robert and Lajtha, 2002). In contrast to risk management,
crisis management is broader in scope and can be defined as a set of ongoing and
systematic processes for identifying, analyzing, and treating business crises by
applying management practices (Mitroff, 1994).
2.2 Business crises and KM
In the current knowledge-intensive environment, organizations need to treat KM as an
imperative organizational activity, and then take a strategic view to link their KM
practices with their missions, strategies, and goals (Asoh et al., 2007; Masrek et al.,
2008; Sahay and Ranjan, 2008; Zack, 1999). Pearson and Rondinelli (1998) contend that
organizations should treat crisis management as an integral part of their overall
business goals. The above statements demonstrate the necessity to conduct research
into critical aspects of crisis management, such as KM practices, for achieving
desirable crisis management outcomes (Mitroff et al., 2004).
Business crises, which usually generate task demands for an organization that
exceed, or come close to exceeding, its abilities to handle without considerable additional
resources (Smith, 2005), are different from the other business events. Crisis decisions are
different from routine decisions because of their relatively high uncertainty and
complexity (Dearstyne, 2007; Stubbart, 1987). During business crises, organization s
encounter a unique, threatening, and stress-inducing decision-making environment that
must be dealt with timely and consistently (Zhang et al., 2002; Pearson and Clair, 1998;
Zhou et al., 2008). These statements imply that in order to acquire critical knowledge for
making timely and accurate decisions during business crises, the development of a
specific set of KM practices for crisis management is necessary.
IMDS
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446
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