Knowledge Management Theories at Nokia

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There are two kinds of knowledge. Gao, Li and Clarke (2008) refer to them as explicit or tacit. Absolute knowledge is transferable through physical media. It is quantifiable and firms can trade it. On the other hand, tacit knowledge has no definite formula. The transfer of silent knowledge can occur best through the internship. Knowledge in an organization is the information that strengthens its competitive edge or allows it to perform its core functions. According to Penrose (1959), without a knowledge increase, firms would become irrelevant after a change of their environment. This would happen because knowledge is critical to their exceptionality. For Nokia, its competitive advantage shifted to the emerging countries in the second half of the last decade (Willigan 2009). Like many other international companies, Nokia realized the importance of knowledge management. It ensures that Nokia is ahead of its peers in the innovation front, which makes it take advantage of various market dynamics. KM at Nokia follows the connectionism theory and the knowledge spiral model. The two theories inform most of the decisions taken in the case study presented in this study.


This was a qualitative exploration. A case study analysis led to the findings presented in the next section of this report. The researcher was familiar with the knowledge management operation of the organization chosen for the study. The researcher had suitable access for the assessment. The exploration focused on the overview of knowledge management. Moreover, an inquisition into the literature surrounding the concept of knowledge management and its two constituents of knowledge and management informed the discussion section of the study. The business environment continues to be competitive as new technology enhances the ways of using resources. Innovations in the market place also alter the restrictions of entry into modern industries. The changes force companies to adapt to retain and grow their market share. For a company, whose competitive strategy includes the aim of staying globally competitive; it has to manage its knowledge appropriately.

Knowledge Management Theories

There are different approaches to the knowledge management cycle. Various KM theoretical bases inform the interpretation and implementation of KM in the organisation.

Definition of Theories

Organisational Epistemology

According to the von Krogh and Roos KM model, there is a distinction between individual knowledge and social knowledge (Girard 2009). The model claims that knowledge exists in individuals. Therefore, people are the custodians of everything known in an organisation. This concept aligns with connectionism, which claims that knowledge has to have a ‘knower’ (Dalkir 2005). The organization epistemology theory explained by von Krogh and Roos advise organisations to produce knowledge ‘enablers’ (Girard 2009). The ‘enablers’ will be the biggest contributors and spreaders of knowledge in the firm. The strength of connectionism comes from the fact that individuals who obtain knowledge and their use of the knowledge create an unbreakable bond (Girard 2009).

Knowledge Spiral Model

Another KM theory is by Nonaka and Takeuchi, known as the knowledge spiral model (Nonaka & Takeuchi 1995). Under the above theory, knowledge travels in spiral forms. It moves from tacit to explicit and back again. Throughout this transfer, there is the involvement of individuals, groups and the entire organization.

Choo and Weick Theory

The theory by Choo and Weick is a sensible approach to focus knowledge management on information elements (Choo 1998). It covers the feeding of information to firms through sense-making, knowledge creation as well as decision-making (Choo 1998).

Wiig Theory

Finally, the Wiig theory claims that in order for knowledge to remain useful, it has to be semantically connected. Moreover, the knowledge should be congruent, complete and hold a viable perspective and purpose (Dalkir 2005). The mashing up of different theoretical models suits KM in organizations. It provides a view of the firm as an organism keen on existence and survival (Dalkir 2005).

Explanation of the Theories

According to Alavi and Leidner (1999), knowledge management links with organizational learning. According to Birkinshaw (2001), knowledge management (KM) provides a challenge to firms. It brings very slight changes to organisations, although it promises many improvements in competitive advantage (Birkinshaw 2001). Many companies try to make KM work. It is difficult to separate KM and act on it as a single business process. KM exists as the central make-up of the organisation. Other than KM, companies also manipulate their knowledge assets through organisational learning and intellectual capital concepts (Birkinshaw 2001).

Research is going on the role and drives of organizations in managing their knowledge. If markets were, the same, new companies would find it very difficult to penetrate them. It would also be impossible for existing companies to outpace their competitors when all other factors remained constant (Porter 2008). Knowledge management is responsible for the acceleration of the volatility in the market. The business environment is dynamic and there are, changes in markets and industries. The changes come from the development of new forms of competition. Other changes arise out because of globalization (Quintas 2002).

People are the custodians of knowledge in an organization. Chua (2002) demonstrates two forms of knowledge, one resting on individuals and the other existing as a collective form. However, even at the shared form, it remains fundamentally at the individual level. The difference occurs because the sharing keeps it unlocked and accessible to any group. The organization’s arrangement to realise its goals together with its history makes up the collective knowledge. Therefore, it stays on the entities of the organization. In addition, knowledge could also be on the practices and routines of an institution.

KM could happen as system or human strategy. The first form is on the creation, storing and distribution of the explicit knowledge. The second one works through people interactions. Therefore, it highly benefits from shared networks (Choi & Lee 2002). Often an organization will decide on a single strategy to pursue. Changes in the strategy occur only after the organization either change its purpose or the market forces make the existing strategy difficult to implement. Nevertheless, with either the systems or human strategy, the organisation can still have different forms of implementation that are specific to its nature. The level of integrating the human or system strategy components determine the actual classification of the strategy employed by an institution (Choi & Lee 2002). It could be a focused view of a single strategy. On the other hand, it would be a balanced view if both system and human approaches inform the strategy. Lastly, the organization might undertake a dynamic view, which shifts the main strategy to reflect the current knowledge in the organization.

Understanding the theories of KM leads to the classification of the KM processes, which start from knowledge creation. It later proceeds to the storage, then distribution and ends with the application of the knowledge. The process is often cyclic. Most organizations want their new knowledge to accumulate with what exists in the organization. The revolving nature of the process allows the organization to innovate continuously. Silent knowledge has finer details that build on the general cyclic process outlined above. Initially, unexpressed knowledge transforms through socialization (Katz & Kahn 1996). At this stage, knowledge moves from one person to the next through job training, mainly inform of apprenticeship.

The important distinction of this stage is the learning process that occurs only through the experiences of the learner. In the second stage, the combination ensues. Here, categorical knowledge amalgamates with tacit knowledge. Often the reorganization will result in new forms of explicit knowledge that are denser than their previous forms. Once the blending happens, the next two stages concurrently transform absolute and unvoiced knowledge. First, users understand the explicit form and then experience it, thus making it tacit. This articulation happens at the externalisation stage. The last stage of the knowledge transformation takes place when people internalize explicit knowledge (Becerra-Fernandez, Gonzalez & Sabherwal 2004).

After creating knowledge, firms proceed to store it. Storage of knowledge in organizations takes the form of people, artefacts and the organisational entities. Storage forms will vary depending on whether individuals record the fresh knowledge in, physical objects or internalize it in their minds. Companies also engage in knowledge distribution to ensure that the correct people obtain the right information at the exact time. The distribution could be the process that knowledge transfers or sharing happen. The transmission transpires among groups, between groups and individuals and from groups or individuals to the firm. During this phase, socialization and storage also take place in cyclic nature.

Companies seek to actualize the benefits of the knowledge they hold, by applying it to the relevant organizational processes and tasks. During decision-making, knowledge comes at the right moment when non-specialists want to know how to proceed with a problem. The specialist receives queries from employees and gives them a direction on the best way ahead. The application of knowledge also takes place through routines. The sequential patterns of interaction use special knowledge embodied in the process, which requires the little need for communicating (Grant 1996).

How Knowledge Travels in Global Organizations

The implementation of knowledge management in governments, non-government institutions and the private sector organizations differ. This report covers the management of knowledge in a multinational company. Therefore, this part will look at KM in the global private sector. An international company could have either a centralised hierarchical network structure or a decentralized one. In the former, the headquarters of the firm gives all the knowledge that flows within the firm. In the latter, the flow happens in both directions. Business units create knowledge and transfer it to the head of the corporation, while the head department does the same and transfers it to the respective business units. The large quantity of knowledge within the global firms and their strategic need for efficiency prompts them to use KM systems (KMS). Often, KMS are special information systems specifically designed to manage knowledge (Kim 1999). Thus, their core function is the making, storing, flow and application of knowledge.

Firms use electronic mail, document management systems and collaboration tools as the main components of KMS (Becerra-Fernandez, Gonzalez & Sabherwal 2004). Ideally, the system facilitates the exchange of ideas in a formal and informal way. A common collaboration tool is the Wiki technology whose best application example is the global online encyclopaedia called Wikipedia. A Wiki is software whose deployment occurs on the internet. Individuals simultaneously access its pages online using their browsers and can edit different parts or the whole document. Companies use Wiki systems to enhance collaboration and reduce the time and money taken to change and distribute important information. Today, much of the KMS relies on the ICT infrastructure of the organization. Therefore, the set of tools, protocols and networks within the firm have to be reliable.

Impacts of KM

There are several impacts of knowledge management in organizations. They could be the intended consequences or unintended results. In either case, the company has to deal with the effects. KM has an influence on people. They become better employees through enhanced learning processes. The externalization, internalization and socialization processes of KM allow employees to retrieve knowledge, which is necessary for their response. An ability to confront any circumstances in the organization leads to employee job satisfaction (Wiig 1999).

Without KM, companies would be unable to improve their efficiency, effectiveness and innovation in the way they currently do. Efficiency leads to the production of cheaper outputs fast. Effectiveness leads to the production of better and fresh output (Becerra-Fernandez, Gonzalez & Sabherwal 2004). KM also enables an organization to produce invigorated solutions to its internal process. KM directly affects the products, and customers readily see the differences. Therefore, the overall performance of the organization also depends on the success of the KM implementation. A successful impact of KM is the formation of new products or the improvement of the existing products. The fresh production leads to a growth in revenue and profit. The impact of KM here is calculable by finding the difference in the return on investment. The organization could also develop an advantage in negotiating with suppliers and competitors. This would be an indirect impact that does not readily associate with its vision and competitive strategy. Moreover, the winding impact could have no apparent revelation in the account books of the firm.

Influencing Factors of KM

Information and communication technology (ICT) is the main factor influencing KM since KM depends on the robustness of the KMS in an organization. Alavi and Leidner (1999), claim that ICT is an important enhancer of KM. Without ICT, organizations would lack the necessary communication and storage capacities to handle KM. Other than ICT, staffs in the organization are another factor that facilitates KM. People as a factor influence the success of KM through the willingness of employees to share their expertise (Storey & Quintas 2001). Staffs will voluntarily share knowledge when they trust the organization and their fellow employees. Therefore, their cooperation mainly depends on the organizational culture of the firm. When the culture enhances a sense of equity and fairness in the decision-making process, the employees will be able to create a good social environment for sharing (Bacon 2007). Furthermore, the communication channels present in the institution should be transparent and foster openness. The clear engagements should happen on personal and organizational interactions.

On the other hand, the same factors that promote the management of knowledge could also be inhibiting. In one instance, ICT codifies information to allow for its transformation and transferability. However, not every form of knowledge is modifiable. In another instance, the ICT infrastructure may exist in a firm as a disintegrated system. Where hardware, software and the network infrastructure exist as independent components, employees will have little or no incentive to take part in the KM activities. Any hindrance on the part of employees in sharing knowledge will prevent the success of KM in the organisation. Sometimes, the resistance arises because there is a lack of an appropriate organizational culture, or the leadership style is inappropriate (Mertins, Heisig & Vorbeck 2001).

Challenges Facing Organisations

There are six major challenges of KM. They arise out of the shortfalls happening between the initial stages of designing the KM to the reality encountered while implementing it. According to Heeks (2006), the six dimensions of KM challenges are information, technology, processes, objectives, staffing and management systems. Other resources also affect KM in a variety of ways. The organization needs vital and reliable information sources to carry out any project successfully (Gupta & Govindarajan 2007). The KM project requires technology to capture knowledge and support implementation. Here, the focus on the organization is to make the technology seamless in its uses and components. The overall aim of technology integration should be to link the information that develops the understanding of knowledge. The linkage should also enhance the creation of fresh knowledge. The challenge here is to integrate the KMS into the organization’s routine (Davenport & Prusak 2000).

The third challenge for organisations is to make all processes and activities manifest the appropriate KM components. The parts of the organizations have to perform their functions well and yield processes that promote knowledge creation and sharing behaviours. The leadership style should promote the exploration of novel ways of tackling problems. The HRM practice should establish a good reward system for KM activities of creation, storage, distribution and application. This recommendation follows the theory by Wiig, which claims that knowledge has value when it is semantically connected (Dalkir 2005). Moreover, the different initiatives of each part of the organization should be measurable (Chong et al. 2000). Determining the actual economic return of KM is difficult. Nevertheless, various methods attempt to measure KM. The performance management framework is one of them. Another one is the KM performance index by Lee, Lee and Kang (2001). This method adapts to the principles of the balanced scorecard proposed by Kaplan and Norton (1996).

Organisations also face challenges from their objectives and values. The strategies of the firm and its organisational culture have to promote the components of KM or the organisation will encounter implementation problems. The organisation culture has to promote KM. The knowledge culture as explained by Oliver and Kandadi (2006) should motivate and empower people to undertake KM activities. The empowerment drives the organization towards its mission. People derive motivation from the values, norms and accepted practices within the organisation (Szulanski 1996). There is a sturdy link between the triumph of KM and the openness of the organisation. A collaborative culture also enhances the success of KM initiatives.

Running of knowledge management in an organisation requires a given number of employees who are competent in KM-related activities. They should have explicit knowledge as well as the tacit knowledge of dealing with KM. Employees use and interact with management systems and structures within the organisation. Therefore, the systems have to align with the objectives of KM-related activities. They should also facilitate the change of organisational processes, which includes their modification, expansion or removal. For most organizations, a team or department dealing with the KM projects is sufficient. Having a dedicated part of the organisation to undertake the design and implementation of KM as a project frees more employees and departments to focus on their core competencies (Chase 1997).

Above all, the organisation will not be able to meet all other challenges of implementing KM when it lacks time and money. As a project, the organization has to justify the expenditures of constituting a KM team. It has to justify the investments into various aspects of KM in relation to their fulfilment of the company’s objectives and its strategy of remaining competitive.

Problems of Implementing KM

Many KM projects fail because organisations are not aware of the application. Some firms fail because they substitute social interaction with information technology. In other cases, failure occurs because the firm focuses on recycling the existing knowledge and ignores the creation and modification aspects of KM. Still, many KM implementations fail because there are no differences in their structure and objective compared to traditional techniques. Organisations need to recognize that informal social networks are avenues for knowledge sharing (Birkinshaw 2001).

Therefore, they should manage their worker interactions as they have meals or drinks together, with the same intention of facilitating knowledge transfer, creation and storage. IT tools complement social tools of KM. It is not enough to codify knowledge; firms should also develop personalisation strategies to build strong communal networks. Management should ask whether KM leads to better understanding and implementation of the firm’s strategies. They appeal for the focus on what is critical to the organisation’s existence rather than what feels good to own. KM should enable groups to get new knowledge and complete their tasks. It is pre-eminent for managers to raise the importance of KM by highlighting its related activities. Once employees recognize the KM activities, they should interact with them as part of their participating in the company reward system.

KM at Nokia

Nokia is a global handset manufacturer. Its headquarters are in Espoo, Finland. In 2008, the company held about 40 per cent of the global handset market. The organization has a presence in 150 countries with more than 117000 employees. The company also engages in mobile network infrastructure development through the Nokia Siemens Network, which operates as a subsidiary company. Nokia had 51.1 billion euros in revenues in 2007. The KM turnaround at the company began in 2006 when it received a new CEO. The CEO transformed the core strategy of the organization to encompass the mobile device, service and software.

Previously, Nokia had begun taking seriously the concept of knowledge management in 1996 when it experienced a rapid increase in its competitive environment. To protect its market share by satisfying its consumers it had to act fast. The company recognized the need to make decision-making take place at the lowest unit to take advantage of the different market peculiarities. It understood and used the organization epistemology theory of KM. The theory stresses the fact that knowledge resides in people (Dalkir 2005). Therefore, Nokia had to facilitate the collaboration of its headquarters and the various cultures and partners whom it had. To realize the accomplishment, Nokia did an exploration of its employees and stakeholders as well as customers. It came up with a bigger and advanced focus for its culture to promote and implement KM.

The leadership of Nokia realises that for an intercontinental company, culture would hold it together globally. Moreover, the culture of the company depends on its values. Nokia relied on the robustness of its values to deliver its KM goals. The values of the company have remained the same for more than a decade. When the company needed to change the values, it had to engage its entire people. The company has a philosophy of involving ‘the many’ when the decision affects ‘the many’. Here, ‘the many’ were its employees whom it kept intellectually engaged. Dealing with a global staff did not occur as an easy accomplishment for the company. First, management had to be serious and committed to the whole exercise of finding new values for the company. They had to assume unknown values that arise from the grassroots level in the same way they would, for those from higher units. The fate of the organization depended on the acceptance of management to the change.

Two methods were fundamental in shaping the value transformation in the company. Nokia used the online platform to engage its people in dialogue. It also used the World Café method as a way of accommodating many people who were located in diverse areas of the world. The method made it possible for the company to create a socialization platform that allowed both the sharing of explicit and tacit knowledge. Participants in the platform assumed the name Intellectual Capital Partners. The methodology made it possible to divide the participants into small groups to mimic a café. The general agenda of the discussion that took place in the company at the time was to come up with a way of recreating the company. Nokia used the analogy of having to set up on another planet from nothing. Therefore, its employees were to think of values that would drive the company’s growth to make it a global giant, in case there was a need to recreate Nokia (Willigan 2009).

The selection of the intellectual company partners happened through the already existing business units of Nokia around the globe. Units had to nominate participants whom they thought had the best qualities of engaging in the discussion. Nokia expected the chosen participants to have the deepest form of tacit knowledge in the company. In addition, the choice was random and the nominating persons had the option of choosing themselves. The chosen participants stated by studying the present values of the firm. They used the website set up by the firm for new value creation. The web site’s name was the Nokia way. The website was a technological tool that offered the participants an option of signing into a local café. Once inside the café, within the web site, they would discuss what they thought should continue to be the part of company value. Furthermore, they would also give their opinion on what values the company should drop (Willigan 2009).

The café discussion lasted for two months. There were sixteen cafés with more than 100 employees participating in each. The cafés also operated like a speed-dating site. There were people who remained on the same café and managed the specific discussion. Meanwhile, the rest of the participants engaged in the debate pertaining to the precise topic of the café they were currently serving. Thereafter, they moved to a new café and took the next issue coming up. The participants went around the cafés every time they logged in. Eventually, they found themselves back to their original café. Moreover, side engagements came up as the results of the various café discussions. For example, the participants created video blogs that non-participants used to learn of the progress of the discussion and offer their opinions. The diversity of the participants was the best thing the company’s leadership wanted. The design of the KM process proved to be successful (Willigan 2009).

The web café gave the company a way of listening to a diverse group of people in an intelligent manner and democratically promoting or declining their ideas. The whole process took place without a feeling of personal prejudice on the part of the employees serving as members of the intellectual capital partners. The critical success factor of the above method is the universality of its acceptance criteria. There were no in-group and out-group behaviours. Each participant got a fair mention of his or her opinions. The neutrality of the café allowed engineers, marketers, salespeople and everyone else from a different department to speak of their expertise and what was important to them. The web café provided a common language and vision that literally stuck the interests of each participant together.

Four values emerged as the focus points that all the participants agreed on. One grand café took place after the expiry of the web cafés. The leaders of the preceding cafés became the participants of the big café. Here, they further engaged in the discussion of how to make the results of the previous engagement exercise to have a lasting effect on the company. To capture every emotion and promote an atmosphere of sharing tacit knowledge, the second café used skits, songs and visual aids. It allowed the expression of thoughts and feelings for the values and was a valuable point for creating semantic connections, in accordance with KM theory proposed by Wiig (Dalkir 2005). After deliberations, the leadership at Nokia received the recommendations from the café. The intensity and sincerity that accompanied the presentation of the values to the leadership of the company overcame any form of resistance previously anticipated. The new values represented the voices of the company’s employees in more than 150 countries.

The four core values of the company that were to shape its development and implementation of KM were achieving together, engaging you, passion for innovation and very human. They were unique and open. They stimulate further discussion as people try to interpret them. The discussion usually takes place in the context of Nokia and expands the socialization mood in the company. Moreover, the values also shape the engagement of the company, with its customers. For example, in the implementation of innovations in technology, it would ask if the chosen approach was the most human way of doing it. Furthermore, the question of achieving togetherness would arise to examine whether suppliers, employees and customers form a representative part in the technological innovation (Willigan 2009).

One could say that the new values at Nokia aspire for bigger accomplishments and were novel. The organisational value also shaped part of the company’s strategy before its global adoption. They were part of some business units at Nokia. The company is familiar, with the fact that it takes interaction for persons to learn something from one another. The hunger for information sharing shows up in every interaction. For example, before coming up with a fresh device for the Indian market, the company engaged its developers and researchers using its four core values. They could factor in the customer, the suppliers and the production capabilities of the people at Nokia. In the end, they came up with a phone that represented the concerns and anticipation of the Indian consumer. These included affordability and additional components like an alarm clock, radio and flashlight (Willigan 2009).

For Nokia, the four core values meant that it had achieved a common global culture. The success of the KM process at Nokia did not end with the value creation. The company continues to track the effectiveness of its interactions and decisions. Furthermore, it continues to incorporate the four core values in all its engagements with employees, where applicable. The company uses an innovative y of practising its value of listening to you. The firm asks its employees to make multimedia files that express their feelings and messages, for the company. It then engages all employees in the selection of the best expression and prizes for the winners. This involvement happens both at the unit level and at the global level of the company (Willigan 2009). Here, Nokia demonstrated a successful implementation of KM according to the knowledge spiral theoretical model (Nonaka & Takeuchi 1995).

The Effects of Knowledge Management at Nokia

The work environment at Nokia changed since the implementation of the new organizational culture to promote KM-related activities. There was an increase in the distribution of knowledge across business units globally. The increase also became apparent within the respective country operations. This was a direct result of engaging the value of ‘achieving together’. The staffs at Nokia have an obligation to share the knowledge from their new training with other staffs. Different departments have their own way of facilitating the transfer. They might organize workshops and hold an informal discussion. There are mechanisms provided within the global framework of the company that allows the siphoning of ideas without prejudice. The proper distribution of the knowledge condition has a positive impact on the workload allocation among team members, and this further enhances their cooperation.

Even distribution of knowledge, at the firm and its departments or subsidiaries, allows for the easy substitution of employees. As employees become more engaged in the processes of the company, they derive a higher level of job satisfaction. The engagement allows the company to assign them duties and responsibilities based on their availability, skill level and capacity to learn. Therefore, they feel that their personal interests shape their engagement, with the company. In return, they become more open to new suggestions and are willing to share their knowledge. The fluidity of employee relations makes reorganization of the company easy. The period it takes to create innovations, research their relevance to the market and offer products based on those innovations becomes very short. This enhances the completive strategy of the firm. Inter-employee relationships also improve. Achieving together as a value means that, knowledge –sharing sessions become the favourable means of engaging with each other. The result is a promotion of an information openness that shows the willingness of employees to share their knowledge with others in an exposed way. The company succeeded in creating knowledge enablers in people as recommended by the organisation epistemology theory by van Krogh and Roos (Dalkir 2005).

At Nokia, the passion for innovation as a value ensures that the company is not only abreast with the latest technological development, but also with their use to enhance knowledge transfer and storage. The use of online training methods of video streaming and the extensive development of intranet fosters employee self-teaching initiatives. The engagement with other employees in the virtual-learning atmosphere prompts them to learn more and be as competent as their colleagues. The overall effect of peer engagement is that the comprehensive knowledge, at the company, increases with each additional employee engagement. In addition, the company enhances its value of togetherness as more employees enhance their skills and become ready for new projects. Project readiness enhances the output of the company. Processes become effective and efficient. The distribution of projects and their related knowledge online, within the company reduces the learning curve and provides a feedback mechanism for the identification of competent employees to undertake it. Therefore, the combination of comfortable access to knowledge and easy identification of experts makes the output of products more certain to meet customer demands.

Challenges of KM at Nokia

The advancement in technology continues to make capturing of knowledge easier. However, the continual engagement with a global workforce and the diversification of the knowledge management objectives creates a challenge for Nokia. The rapid changes in the market and the need to remain committed to innovation require that the company adapt fast. Often project schedules offer a short duration to allow employees to obtain new knowledge and use it immediately. Therefore, the KMS might become a hindrance in the future. Nokia needs to continue streamlining it and making it more effective in the short run. Another challenge is that not every employee shares the same preference for the chosen reward system in the company. While most choices in the company are for the general good, of the company, some employees have unique preferences that require acknowledgement. The sharing of tacit knowledge is difficult to measure, and some likely disadvantages of a universal reward system would be that employees who specialize in sharing this kind of expertise feel left out.

Other challenges for the company are generic, and any other company with a similar global presence would experience them. They include the need to integrate and maintain KM-related ICT infrastructure. Here, the overseer of KM must ensure that KM tools and systems receive enough hardware allocations (Markus & and Majchrzak 2002). The integration of tools and systems should happen on a continuing basis, and each subsequent installation or modification should remove errors and increase effectiveness and efficiency. For the above reason, the company has to maintain an autonomous department that handles the KM process. The overall value of togetherness at Nokia might become a hindrance in creating an independent department. Coming up with a consensus agreement might require fresh ways of thinking about the problem. It would be an appropriate oversight unit to remain at the headquarters of the company to enhance coordination.


The Nokia case study shows that knowledge management increased the readiness of employees to undertake projects. KM is essential because it allows staffs to react to different circumstances by reaching out to the knowledge available in the company. Without the storage and distribution of knowledge, employees at distinct global units of the company would be unable to increase their learning and deliver innovations from outside their countries (Senge 1990). KM has an impact on both the employee’s learning process and the unit’s work process. The influence varies with the internalization, externalization and socialization of knowledge. Nokia received the most impact through the socialization of knowledge. This happened with the web to represent real-world informal settings. Web technologies eliminated geographical boundaries. It made it possible for employees to gain knowledge from their local units and other global units or external partners of Nokia. The direct impact of the enhanced knowledge source was an improvement in the efficiency and effectiveness of the different operations at the company (Becerra-Fernandez, Gonzalez & Sabherwal 2004). The quality of products from Nokia also improved. The enhancement on output quality came about because KM facilitated the production of customization as demanded by customers.

Other than the desired consequences, the company also realized unintended impacts of KM on its operations. There was an improvement in the inter-employee relationship. When the company undertook a global exercise to come up with a new value system and an organization’s culture, it opened up its employees to the cultures of its operations in countries that are not similar. The staffs appreciated the characteristics of their colleagues in distinctive parts of the world. The engagements offered them an understanding of the dissimilar challenges faced by each. Collaboration between varied employees from diverse departments also increased the appreciated of disparate skill sets. The willingness to share the knowledge developed the organizational trust (Hilsop 2005).

Nokia chose to focus on values because it understood the need for collaboration in its global operations. The firm depends on its extensive network for manufacturing and development of its brand. The collaboration of many people forces them to sacrifice some of their interest and embrace others. The give and take situation creates a bond that holds employees and the entire organization jointly. The KM items that bring together employees, for the collaboration, act as the unifying factor. For Nokia’s case, its organisational values serve the purpose. The extensive and intensive discussions that led to the creation of four key values to drive organisational culture at Nokia also touched on other strategic aspects of the company. They created knowledge in strategy, management style, priorities and market. They also opened the firm to its failures such as inadequate reward systems. Values shape organizational culture. In turn, culture affects the execution of KM-related initiatives.

The case of Nokia demonstrates that organizational culture has a significant bearing on how KM turns out in an organisation. It affects the internalisation, socialisation and externalisation of knowledge. The value system at Nokia provided a robust way of applying a streamlined strategy to all job functions practically. The implementation favoured the different components of KM. For example, they made the company worth working for, and this is important in attracting or creating new knowledge. The values also capture a greater sense of dignity. The appreciation of personal work and lives provides a favourable environment from the transfer of knowledge and its modification.

The method used by Nokia to come up with new values is worth highlighting because it represents a successful form of KM. The use of the café approach led individuals to look at the company’s current operations and offer an ideal way of doing business. The method captured individuals’ interests and feedbacks without intruding on their privacy. It was a perfect way of reaching out to their tacit knowledge about the company. The method made provisions for creativity. The allowances acted as stimulants for fresh knowledge. The equal right to use accorded to all participants, assisted in capturing obvious and the not so self-evident details, which make the company unique among its peers. The bi-directional flow of information between ages and ranks stimulated a knowledge understanding that storage systems would be unable to capture.

The success of KM depends on the leadership of a firm. Leaders embody knowledge in the firm and transfer it to the organisation while they also learn from it. The case arguments well with the theory by Nonaka and Takeuchi, about the spiral nature of knowledge and its proper management (Nonaka & Takeuchi 1995). The café method used by Nokia demonstrated that its leadership supported the improvement of knowledge about the company. As well, they supported the inclusion of all employees in the decision-making process without the fear of losing their authority. Having an organisation-wide implementation of KM also removes the challenges of a few deep-seated employees hijacking the process, which may cause resistance with their colleagues.

There are various risks that Nokia embraced in its use of a mass participation approach to KM. Employees who lacked enough knowledge at the beginning of the process could have generated bad ideas. Some senior management could derail the application of the recommendations if the employees felt left out. A failure of the system could trigger the company’s board to request for a management change, which is a negative effect on the current leadership. However, the benefits realised by Nokia outweigh the potential risk of engaging all employees in a KM process. Besides, the present knowledge worker society requires firms to tap everyone’s knowledge recurrently to remain competitive (Drucker 1993). The company experts are also employees, and they all develop their knowledge by participation (Davenport & Prusak 2000).

Future Directions and Recommendation

Going forward, Nokia will have to enhance its method of storing the existing knowledge. To accomplish the task, the firm will need to align properly the formulation and execution of its strategy with the mandate of KM. The company value and organization culture that promote technological innovation will continue to assist it in storing knowledge (Betz 2003). Moreover, the creation of solutions by many people for the sake of creating a positive impact, for many people, will ensure that the knowledge in the firm is accessible to all staffs (Davenport & Prusak 2000). The heavy use of the internet and intranet technology makes storage of KM scalable (Heeks 2006). Nevertheless, Nokia will still face challenges in availing time for storing knowledge without compromising its operations.

So far, the company is in the right path of managing time for storing and retrieving knowledge by facilitating the creation of videos and other forms of expressions for employees. Videos are good because they allow an employee to continue working while filming their progress. The learning staff can then follow the process outlined in the video and deliver a new output concurrently thus saving the company time. The live session recording is the best way of capturing tacit knowledge. Other than, depending on technology to solve the issue of knowledge storage, the company can also look at its human relation department of a complementary solution (Drucker 1993).

To sustain the culture of sharing knowledge, Nokia has to keep reengineering its reward systems. It will have to prevent the workers’ concerns from going unnoticed. While checking its reward system, the company will need to be careful to ensure that the chosen prize positively influences its business performance. The report showed that the quantification of the KM effect on business is not straightforward. Nevertheless, there is the option of examining the KM performance against its objectives and those of individual employees (Massey, Montoya-Weiss & O’Driscoll 2002). Using this method will ensure that prizes go to those who really deserve and purposefully inspire others (Heeks 2006).


The concept of knowledge management began more than a decade ago. This report explores KM in organisations. It focused on the definition of KM, its present understanding and common application. KM deals with the creation, storage, distribution and actualization of knowledge within firms. It offers the challenges than the organisation would face as it tries to implement KM. KM presents challenges to organisations after they begin its implementation such as the need to create constantly new knowledge. There are various suggestions for dealing with the challenges and optimizing KM. As a qualitative research, the case study of Nokia influenced the examination of KM components. The specific use of a mass approach to managing knowledge at Nokia led to the development of four core values. Therefore, employees felt that their personal interests shape their engagement, with the company. In return, they became more open to new suggestions and were willing to share their knowledge. The values shaped the organisational culture of Nokia and promoted additional KM-related activities. The example of Nokia assists in forming the understanding of how proper KM works in organisations.

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