THE IMPLEMENTATION OF KNOWLEDGE MANAGEMENT STRATEGY IN MALAYSIAN LOCAL AUTHORITIES FOR URBAN MANAGEMENT

MUHAMMAD NAJIB RAZALI
Faculty of Technology Management,
Kolej Universiti Teknologi Tun Hussein Onn,
86400, Parit Raja, Batu Pahat, Johor, MALAYSIA.

ZAHARAH MANAF
School of Economics & Finance,
University of Western Sydney, Blacktown Campus,
Blacktown, NSW, AUSTRALIA.

INTRODUCTION 

Urban management activity is part of urban development besides urban planning, construction and management (An and Cook, 2003). Andy Lake from Home Office Partnership, United Kingdom said, urban development not solely the workplace, property prices, and transport networks but the relationship of the town to its rural hinterland, the power of family ties, ethnic considerations, religion, politics, and other cultural factors all play their part. In Malaysia, which has been experiencing rapid economic and social transformation over the past three decades, there are many new urban areas being developed. The increasing trend of urbanization in Malaysia was characterized by the doubling number of urban centers as well as the concentration of people in the metropolitan (Siwar and Kasim, 1997). According to Department of Statistic, Malaysia, the 2000 census showed that about one in every persons in Malaysia residing in urban areas was found in the built up areas, as shown in table 1.0. This substantial proportion was due to population growth in the built-up areas being higher then the core areas of the towns, brought about by the inflow of migrants both from the rural areas as well as from the core areas. 

TABLE 1.0: Population change in urban areas, Malaysia, 1991- 2000 

Source: Department of Statistics Malaysia, 2005.

Urbanization process in Malaysia had grown rapidly from 1970 to 2000 with the level of urbanization recorded at 62.0% (Table 1.1). In order to ensure urban management is well structured according to the government plan, local authorities play a major role as the regulatory and enforcement body. Being the third level government in Malaysia, local authorities have to implement some strategic management to achieve not only world class cities but also knowledge cities.  

TABLE 1.1: Level of urbanization by state, Malaysia, 1970, 1980, 1991 and 2000 

 Source: Department of Statistic Malaysia, 2005. 

            In the business world, knowledge management (KM) is considered as the process of creating value from the intangible assets of an enterprise. It deals with how best to leverage knowledge internally within the enterprise and externally to the customers and stakeholders ( Ergazakis et. all, 2004). This way of running a business can also be implemented in local authorities for urban management. It is because in LAs, urban management also deals with customers who are people in urban areas and stakeholders which consists of government, city council members etc. Ergazakis (2004) discusses criteria of well developed urban area which is also known as ‘knowledge cities’. Knowledge cities are:- 

1.      High quality of life

2.      Provision of efficient, dependable and cost competitive access to infrastructure for transport of people, goods and information

3.      An urban design and an architecture that incorporate the new technologies

4.      Central educational strategy including all cultural facilities and services

5.      Economy with enough ‘critical mass’ to support world competitive specialization

6.      Networks of commercial influence, in order to attract funds

7.      Market access and awareness, that is to say high capacity in sustaining robust trading relationship with other markets

8.      A business culture, which is at once collaborative and competitive

9.      Responsive and creative public services

10.  Open, tolerant and merit based culture and inclusive society 

Nevertheless, in order to fulfill the above requirement, the main important element that needs to be taken into account is to achieve sustainable development in urban area. In the United Kingdom Sustainable Development Strategy, the government is committed to review the Framework, and office of the Deputy Prime Minister’s is fully engaged with this at both official and ministerial level. The following actions are in hand to address the existing issues which are:-

1.      Overarching commitment

2.      Travel

3.      Water services

4.      Waste

5.      Energy

6.      Procurement

7.      Estate management

8.      Biodiversity

9.      Social impacts

Besides, communities in urban area also have to move into information society where knowledge is the main element. Future society must be regarded as having high information or as an e-community. Thus knowledge management concept is going to play important roles in this area.

            In urban management, local authorities need to take into account some of the major problems occurring in urban areas such as:- 

1.      Employment creation

2.      Provision of housing and social amenities

3.      Development of growth centres

4.      Centres within centres

5.      Centres in new region

6.      Rural urbanization

( Siwar & Kasim, 1997).

KNOWLEDGE MANAGEMENT STRATEGY 

In knowledge management strategy, most of the current design is made for enhancing organizational and individual performance through increased competitiveness and value; reduce costs of knowledge acquisition, ease of storage, and dissemination of knowledge. These have been describe in Siemieniuch and Sinclair, 1999, Marshall et all 2001 and Wong et all, 2005. And according to Perez and Pablos (2003), the most difficult element to control in an organization is the people. In local authorities, organizational resources can be combined and defined as assets of different types which enable the firm to conceive and implement strategies leading to the LA’s to improve its efficiency and effectiveness and enhancing its competitiveness.  Managing knowledge is a key element in the achievement and sustainability of competitive advantage. The knowledge management concept is defined as the necessary identification of knowledge categories for the support of the global organization strategy, the evaluation of the firm’s present state of knowledge management, and the transformation of the current knowledge into a new, powerful basis for knowledge, filling in any existing gaps (Gopal and Gagnon, 1995). Figure 1.0 show how a KM strategic management can be implemented in local authorities as a whole.

Bueno (1998) also described a KM cycle that can be implemented in LAs as the starting level in KM strategic (Figure 1.2).

            Knowledge management modeling is knowledge based computer applications which is to manage in a systematic way- problem solving and decision making approaches of users whether it is from the organization or the communities. There are several ways to develop KM modeling which can be customized to suite each LAs in Malaysia (table 1.3). This system enables the following: 

1.      retention of in-house expertise even after the human expert has left the organization

2.      greater innovation by allowing creative professionals to explore, understand, discard and rework many alternative paths to a needed solution

3.      an improved understanding of the decision process

4.      greater decision making consistency by having KM system application serve as a common reference base in the organization

5.      increased cost- effectiveness in the transfer and dissemination of existing knowledge (e.g. technical training and staff development)

TABLE 1.3: Modelling techniques and features 

 (Source :  Abdullah et.all, 2003)  

The Guru in knowledge management concept; Kaplan and Norton (1996) also come up with an idea to implement knowledge management performance scorecard which adapts the balance scorecard approach. This concept can measure LAs performance in four key areas: 

1.      financial performance

2.      internal business processes

3.      customers

4.      growth 

The model, in its original conception, is focused on broadening out the measuring of performance in profit- making firm. Even though LAs are not really profit-making organizations; they do have to maximize all resources. The model is highly attractive for this reason, especially in its capacity to embrace the knowledge characteristics of an organization’s business. Table 1.4 shows the organizational key result areas. 

TABLE 1.4: Balanced scorecard for public sector performance management 

 (Source: Kaplan and Norton, 1996). 

KM STRATEGY FRAMEWORK FOR URBAN MANAGEMENT IN LA’S 

This framework will combine all the characteristics in knowledge management to suite the local authorities especially for urban management. To design this we need to identify steps needed to be taken as guidelines for such a strategy. Fawzy Soliman and Keri Spooner (2000) had drafted some guidelines for implementing knowledge management. This guideline is suitable for LAs especially for urban management since to manage urban area it needs participation from the whole organization. 

1. Alignment of knowledge management with urban management

In urban management, mostly it will focus only on physical development. In KM, it attempts to focus equally on managing both tacit and explicit knowledge. This model recommend using the 80:20 rule, i.e spending 80% of resources on one approach and 20% on the other. Clear strategies for implementing KM efforts must be carefully developed and discussed before a significant investment or projects are made. It is essential to be clear about what the benefits would be for the organization and what impact is expected on its strategies. The role of officers and staffs in LAs in identifying where the tacit knowledge resides and how best to utilize it, is important for the success of this strategy.  

1. Identification of the benefits of knowledge management efforts

In order to implement knowledge management concept, the most crucial part is to identify and quantify the benefits of KM since the characteristic of KM itself is intangible. For LAs, the most important is to conduct full-scale business analysis before choosing a KM program to suit the organization. In this matter, the top management play an important role in assessing the employees’ knowledge and in determining if major benefits to the organization can be expected from conducting the analysis. 

1. Implement a know- how strategy

To implement a know-how strategy, reference can be made to a study done by Price Waterhouse Coppers, 1999 as follows:- 

i.                     focus only on what the LAs need to know in urban management, i.e. become knowledge focused;

ii.                   make important knowledge visible for benefit in urban area, i.e. make knowledge visible (e.g. create and make explicit pathways to the experts and important wisdom within the company);

iii.                  pay attention to the vocabulary of knowledge, i.e. what knowledge defines (e.g. customers’ needs versus customer feedback);

iv.                 go beyond the company to tap knowledge from customers, federal government, people in urban area, stakeholders and other LAs, i.e. become a knowledge seeker;

v.                   Make it clear to employees that knowledge sharing is a core value for the company, i.e. become knowledge culture;

vi.                 Measure the results of the implementation of the KM program, i.e. become a knowledge assessor;

vii.                Reward the sharing of expertise and intelligence, i.e. become knowledge exemplified.           

1. Choosing the appropriate knowledge management program

LAs must determine how they can convert the knowledge and make it available. A good knowledge strategy need to delineate clearly the resources to be dedicated to tacit and explicit KM and should include strategies to improve knowledge sharing. A special program for urban management must be suited to all parties. Some of the software is already available in the market but we have to make sure it can be customized because some of the software is not localized. This software can help LAs to manage urban areas in term of physical development, maintenance, facilities and supervision. 

1. Creating supportive environment for KM programs

Many LAs have work cultures which do not support KM practices. For Las, especially municipal council which directly manage urban areas, it would be rare to find an employee who spends time on knowledge sharing projects if they are not recognized value- added activities. To ensure such application is acknowledged, there are some important roles for human resources department to implement  in supporting KM activities.  

1. Use of enabling technologies for the KM program

The are many emergence technologies such as the Internet, mobile telephones and knowledge based systems which will facilitate the sharing of knowledge and assist the implementation of KM programs. Some of the technologies already employed by the LAs and could go at least part of the way towards employing the KM approach. However many LAs in Malaysia must be aware that technology possesses limitations which could result in many conflicts before a solution is achieved. In Malaysia, infrastructure of ICT is superb but the major problem is to maintain it. This infrastructure is necessarily people- intensive. LAs that have successful approaches to KM do so by trying to manage knowledge of human resources in the organization rather than by identifying high- payback processes for which better knowledge management can yield significant urban values.

1. Creating the KM team

To introduce or implement a new concept, there must be a team to designed KM for each LAs. This is because each LAs have their own characteristics and uniqueness. KM strategy is already there and needs to be customized and locallized to suite LAs especially for urban management. For effective implementation of KM programs, the human resources department needs to assist in: 

i.                     forming the KM team

ii.                   storming the KM program

iii.                  norming the KM rules

iv.                 performing the KM activities

v.                   reforming the KM program 

1. Creating KM leadership

In LAs, Yang Dipertua Majlis (Chief Executive Officer) play an important role to ensure that KM strategy is successfully implemented. He/she can appoint knowledge officer to lead this project and person appointed must have:- 

i.                     interpersonal/ communication skills

ii.                   passionate visionary leadership

iii.                  business acumen

iv.                 strategic thinking skills

v.                   championship of change with the ability to withstand ambiguity and uncertainty and

vi.                 collaborative skills

The Framework 

To ensure this implementation is successful, a framework will be designed as a guideline. Before KM strategy can take place in LAs, we must identify characteristics of urban management and the problems that need to be solved to achieve goals of each urban planning development. Most of the urban development in Malaysia, which is similar to their overseas counterpart, needs to achieve sustainable urban development which may consist many aspects.

The first step to be taken is to identify KM strategic management (figure 1.1) and after identifying all the main elements in LAs, KM cycle can be implemented (figure 1.2). These two steps are the preliminary stage for implementation of KM program. The next step is to develop KM modeling. There are several ways to design KM modeling as shown is table 1.3. In Europe, the most common model used are CommonKADS and Protégé 2000, the Unified Modelling Language (UML) and Multi- perspective modelling. Models are widely used in developing software systems including knowledge management systems. Each of the above techniques currently complements each other in one way or another to develop better models of knowledge. Despite the first step already identified as the strategic management in organization, Kaplan and Norton (1996) suggested to further identify balance scorecard in an organization. This is known as the KM performance scorecard. It measures LAs performance in four key areas as stated in table 1.3. And finally, there are some steps that need to be taken to fully implement the KM strategy. This framework is based on current research and theory on KM, intellectual capital and human resource management. Figure 1.3 shows a framework of KM urban management and figure 1.4 shows the complete framework of KM strategy for urban management in local authorities. 

IMPLICATIONS 

The KM strategy has significant implications for the development of urban management strategy and its associated functions due to the pervasive nature of knowledge within an organization. It is fundamental that LAs demonstrate an awareness of the potential impact of the knowledge concept of KM on urban management. This awareness of the scope of KM provides LAs with opportunities to build linkages and relationship between overall organization strategies. Since human and intellectual capital are indeed the core focus of KM strategy, LAs can play a key role in building and sustaining a dialogue based on understanding and awareness of the discourses underpinning various approaches to KM. This involves recognizing the important role of technology and the tools of IT, and also recognizing the fundamental role played by human and intellectual resources. Figure 1.5 shows the framework of impacts of KM strategy in urban management. 

CONCLUSIONS 

When discussing about urban management, it involves urban development and people manage it. In Malaysia, urban management is managed by local authorities. The concept of knowledge management has begun to attract the interest of communities. It is believe, KM can inextricably linked to human resource in Las, strategic LAs practices help organizing complex urban area for competitive success. This paper addressed KM strategy by examining innovative capacity, organization type, and KM strategy in relation to the beneficial application of systems. This movement will be decisive in terms of innovation and can contribute to a stronger urban competitiveness towards worlds class city and sustainable. The technical capacities of a modern information technology will help this strategy. Local authorities in Malaysia can used this model as a framework in urban management. It may contribute to an integrated understanding of the knowledge development process and its influences into the domains where urban management efforts should be focused. Nevertheless, further research needs to be done to investigate each of the level in KM strategy. This needs more times and budget because to change norm in organizations it’s not an easy things. However, first steps must be taken.