Knowledge Management

Drawing on the theory of the 'personalization strategy' and on the ' socially constructed models' of Knowledge Management identified by McAdam and Mcreedy (1999), this research project constructs the concept of e-commerce as knowledge management. In order to justify the knowledge management approach and model adopted here it is necessary to review and critique the 'classic models' more traditionally adopted by academics in the field of knowledge management, and to illustrate why they are not considered appropriate for application to a study of consumers' knowledge creation and exchange via the Internet.

Knowledge creation and conceptualization are context-dependent. They depend upon our ways of viewing the world (Johnson & Duberley, 2000). From a positivist perspective knowledge is 'true fact' which can be objectively observed . Whilst from an interpretivist or constructivist perspective knowledge is constructed and negotiated by people in day to day interactions, and can only be understood and communicated subjectively (Chua, 1986; Burrell & Morgan, 1979). The different approaches to the creation of knowledge are echoed in approaches to knowledge management (Hansen, Nohria, & Tierney, 1999). McAdam and McCreedy's paper, A Critical Review of Knowledge Management Models, (McAdam et al., 1999) identifies and critiques three models of knowledge used in a management context:

• Intellectual capital models

• Knowledge category models

• Socially constructed models

Table 4-1 illustrates the characteristics and key thinkers of each approach.

Table 4-1: Key thinkers and characteristics of knowledge management models

Model	Characteristics	Key Thinkers
Intellectual Capital	Objectivist stance. Knowledge is objectified, measured, valued and controlled. Focus is on explicit or tangible knowledge. Neglects social processes.	(Stewart, 1997) (Edvinsson, 1997) (Van Buren, 1999) (Roos & Roos, 1997)
Knowledge Category	All knowledge can be identified and categorized. Focus is on dichotomies (e.g. tacit / explicit, personalized / codified). Cursory consideration of social processes.	(Nonaka et al., 1995) (Hedlund, 1994) (Carayannis, 1999) (Earl, 2001)
Socially Constructed	Constructivist stance. Holistic approach to knowledge. Knowledge cannot be controlled. Focus is on communication and knowledge created through social processes.	(Clarke & Staunton, 1989) (Demarest, 1997) (McAdam et al., 1999)

The theory of socially constructed knowledge management does not assume one given definition of knowledge, but adopts a more holistic approach linking knowledge to social and learning processes. This holistic view allows the models to 'be used to represent the key dimensions of Knowledge Management in the widest possible sense' (McAdam & Reid, 2000) and, therefore, renders them suitable for a consumer focused exploration of e-commerce as knowledge management.

This study takes the socially constructed approach, arguing that knowledge is socially constructed and subjectively understood. The model that is adopted for this research is a version of Demarest's (1997) adaptation of Clark and Staunton's (1989) model, modified by McAdam and McCreedy (McAdam et al., 1999). This model emphasizes four stages in the knowledge management process, 'knowledge construction,' knowledge embodiment,' ' dissemination ' and finally 'use,' but it adds 'emancipatory enhancements' through employee use of knowledge and subsequent empowerment. The model is adapted to adopt a consumer focus in order to explore consumer empowerment through knowledge use (Figure 4-3).

Figure 4-3: Socially constructed model of knowledge management

Adapted from McAdam and McCreedy (1999)

Knowledge Management and E-Commerce

It has been argued that to add maximum value for a company, the e-commerce function should attempt to replicate the way people shop in the 'real world' and 'create a sense of community and opportunities to communicate' (IPA, 1995). The success of companies such as eBay, which doesn't actually sell anything but simply facilitates consumer-toconsumer exchanges, or Amazon.com, a pioneer of electronic consumer reviews, illustrates the demand for consumer connectivity. At the same time, consumer research has moved away from the view of a passive, cognitive, information-processing consumer to recognize a more pro-active, discriminatory and social individual. Foxhall et al. state that:

'It is almost certain that he or she will seek information from friends , neighbours or relatives about the relative merits of different brands. Indeed several studies indicate that informal word-of-mouth communication may be more effective than formal advertising in moulding consumers' decisions.' (Foxhall, Goldsmith, & Brown, 1998)

There is substantial literature on word-of-mouth (WOM) marketing (Sheth, 1971; Haywood, 1989; Buttle, 1998; Engel, Kegerris, & Blackwell, 1969). WOM is generally defined as interpersonal communication concerning products, companies or services where the listener regards the communicator as impartial. Established definitions have recently been refined to include not only oral communications, but also electronic communications such as the Internet which is 'a growing source of recommending and complaining communications' (Buttle, 1998; Stokes & Lomax, 2002).

Traditionally, a consumer's ' information-seeking process' may include an internal search evoking the consumer's memories and previous experiences, and an external search gathering information and knowledge from explicit sources such as consumer guides and reviews. It may also include knowledge of products, services and companies constructed through interactions with family, friends, colleagues, manufacturers, and suppliers. It is into this stage of the consumer experience that electronic channels are most likely to be accommodated. Qualitative research with consumers supports this, suggesting commercial benefits of online communities:

'There appear to be commercial benefits for organizations providing virtual communities on their Web sites. Many people would like to use a virtual community to communicate with the company itself.' (Evans, Wedande, Ralston, & Hul, 2001)

And even a reliance upon a virtual community:

'I go to Amazon instead of a regular bookstore because if I'm interested in a book, I can find out what 100 other people think about it. If I go to a bookstore now, I'm lonely . Where are those 100 people?' (Brewer, 2000)

The reach and impact of word-of-mouth marketing is vastly amplified by the Internet.

Social Constructionists argue that it is through communication and social interaction that knowledge is created. This may be knowledge about products on the market, or the quality of customer services departments of various companies. Through the Internet, the potential for consumer connectivity or interaction is vast. A person can exchange opinions and experiences of a product or company with thousands of other consumers. She can read a customer review of a book, and then read how useful that review was to others before making her decision to purchase. Finally, she can add her own ratings. She can compare the experiences of consumers who purchased different brands of cameras a year ago, reflect on their experiences of using the product and interacting with the company before deciding which brand she should purchase.

Through the Internet, a whole new world of such conversations has opened up. It has even been suggested that online communities of consumers operate a 'gift economy,' investing great time and effort in contributing their 'knowledge.' These practices have resounding echoes of the Knowledge Management practices promoted within many organizations, and in particular of the models of socially constructed knowledge management models proposed by Demarest (1997) and McAdam and Mcreedy (McAdam et al., 1999). To explore consumer's use of the Internet as a Knowledge Management system, and to propose ways in which organizations could create maximum value from knowledge created and shared by consumers through the Internet the following research study was carried out.