Proceedings of Applied International Business Conference 2008
DEVELOPMENT OF KNOWLEDGE MANAGEMENT CONCEPTUAL MODEL FOR
PROPERTY MANAGEMENT BUSINESS IN MALAYSIA
Muhammad Najib Razali ψ
Universiti Tun Hussein Onn Malaysia (UTHM), Malaysia
______________________________________________________________________________________
Abstract
This paper tries to suggest the implementation of knowledge management strategy for property
management business in Malaysia. The strategy which is a conceptual model for this research work,
formulated from various literature surveys. This will then be a conceptual model for this study. The study is
based on conceptual design framework on knowledge management approach for property management
companies. Case study is among registered property companies with Board of Valuers, Estate Agents and
Appraisers. This is to determine the level of implementation for knowledge management strategy of the
identified property management companies. Knowledge Management is relatively a new terminology for
property management industry in Malaysia. However, some of the elements are in place. Thus, this model
will be tested to distinguish the level of implementation. And it will then to be as a base of knowledge
management system for property management industry in Malaysia. This study will give significant
contribution to the property management industry in Malaysia. As business environment is evolve which
knowledge is vital, property managers should participate in globalisation changes. This concept will in turn
revolutionise organisation into more innovative and competitive companies.
______________________________________________________________________________________
Keywords: Knowledge management strategy; Property management; Malaysia.
JEL Classification Codes: Q2; Q23.
1. Introduction
In property management industry, the concept of knowledge management (KM) is relatively new. The
concept of knowledge management (KM) is relatively new in property management industry. From the
literature survey, very few studies focus on the concept of knowledge management in property
management. However, literature exists in other subject areas particularly in relation to the concept of local
knowledge that provides debate and useful insight on how knowledge is acquired by and transferred
between individuals (Almond, 2001). Thus, this paper the level of implementation of knowledge
management strategy among property management companies in Malaysia. , Results from this research
works are to some extent will be as a based for the whole KM framework.
The property management industry has also seen innovative change in recent years, not least caused by the
advent of the internet and the evolution of new routes to market (Wynn et al., 2007). Dixon (2005)
highlighted that there was an increasing debate during the late 1990s over the emergence of a ‘new
economy’, built on major structural changes driven by globalisation and information and communication
technology. He further stated that the trend was shifting away from tangible physical assets towards
intangible goods, such as knowledge and information. Consequently, it also reflects the real estate business
nowadays. Traditionally, real estate businesses are engaged with land, money, location, value, property and
estate. Dixon also propagates of the new economy which now takes place in a globalisation environment,
driven by technological change in alliance with other forces (Dixon, 2005). Furthermore, real estate
professionals should re-orientate themselves in a globalise world. In management playing field, knowledge
management is already become common term for organisation turn into better organisation as well as
develop managerial skills among workers. Knowledge management represents a logical progression
beyond information management (Baker and Badamshina, 2002). Furthermore, knowledge management
can also be seen as representing a culmination and integration of many earlier organisation development
ψ
Corresponding author. Muhammad Najib Razali. Universiti Tun Hussein Onn Malaysia (UTHM), 86400,
Parit Raja, Batu Pahat, Johor, MALAYSIA. Corresponding author Email: [email protected]
Proceedings of Applied International Business Conference 2008
ideas such as total quality, reengineering, organisational learning, benchmarking, competitive intelligence,
innovation, organisational agility, asset management, supply chain management, change management, etc.
(Baker and Badamshina, 2002).
According to Shawn Callahan (2003), knowledge management strategy should encompass:
i.
ii.
actions that are intended to result in anticipated business outcomes;
actions that emerge as a result of the many complex activities that are undertaken within an
organisation.
Lam (2008) highlighted, from the strategic management point of view, managers should always review the
environmental changes and seizes opportunities to improve their organisational performance. In the
information age, many organisations compete for shrinking profit margin in increasingly global market
(Aurum et al., 2007). Malmberg et al (1996) bring to light three key issues in order to ensure
competitiveness in firms:
i.
ii.
iii.
localised innovation processed
barriers to the diffusion of knowledge
attraction of outsider sources of knowledge
2. Knowledge Management in Property Management Organisation
According to Gibson and Hedley (1999), information is critical to the management process. They added,
the core activities and responsibilities of any corporate property manager rely on having good quality,
accessible and accurate information. Matzdorf et.al (2000) strengthens this statement and come out with
study pertaining on barriers to organisational learning in the chartered surveying programme. One of the
main targets in knowledge management concept is to create learning organisation. The study reveals that
the main obstacles were:
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
emphasis on individual learning;
learning-equals-training;
leraning-equals-lack-of-knowledge attitude;
a not precisely defined but all-pervading notion of professionalism competition;
the complex-or even contradictory-nature of the professional bodies;
those ‘unwritten rules’ within the profession that work against organisational learning;
the traditional hierarchical structure within the profession and in surveying firms;
learning as a cost factor rather than an investment; and
individuals’ prior experiences of learning.
From the aspect of dissemination of knowledge, Almond (2001) emphasises on the important among
surveyors to have well verse in local market condition. His study focuses on how knowledge is
disseminated and the issues impact on practice. The study stresses on strategic knowledge is universally
applied; for example, knowing that horizontal cracking at half-metre intervals is a sign of cavity wall tie
failure, or knowledge of particular property types. Thus, property manager should be very sensitive to the
changes in the economic environment so that contingency plans can be made for the owners in terms of
cash flow planning (Li, 1997). Property managers must also view property in various ways. According to
Gibson (1994), property to property managers is a technical challenge. They only focus on the building and
not the activity which takes place inside. She added property to them is building which needs to be
renewed, accommodation which needs to be refurbished, and a tax liability which needs to be minimised.
Thus Gibson (1994) drafted strategy framework for property management which emphasised operational
property is managed on a par with all other significant resources and property should be part of an
organisation’s strategic planning process. In another word, property managers should integrate operational
objective combined with all information on property, operational and external. At the same time property
managers should give notice on how to achieve (activities, skills requires and responsibilities) and how to
monitor (property and management). After these activities working in tandem, as a result, the property
objective will be achieved (figure 1).
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Proceedings of Applied International Business Conference 2008
Operational Objective
Property Objectives
How to achieve
• Activities
• Skills required
• Responsibilities
How to monitor
• The property
• The management
Information required
• Property
• Operational
• External
Figure 1: Property Management Strategic Framework (Gibson, 1994)
Chin (1999) surveyed on Singapore’s property management industry. From his survey, it is revealed that
clients are more demanding and are taking into consideration whether a company has an ISO certificate. He
added, as the business environment becomes increasingly competitive, many Singapore companies have to
look beyond their shore for opportunities. While Li (1997) found that there are many problems for the
implementation of good property management in this emerging property market. He also stressed this is
especially the case when the supply of good quality buildings is increasing in various cities, and
competition among cities and buildings will soon be very keen. Users have a very different view of
property from that of the property managers (Gibson, 1994). Property managers can be equally blinkered.
Property to them is a technical challenge. They focus on the building and not the activity which takes place
inside (Gibson, 1994). Li (1997) found out that in China, two major obstacles in developing good
management practice in China’s market; training and staffing. Furthermore, Dixon et al., (2005)
highlighted that real estate business is now shifted to the new types of real estate. He mentioned the
importance of property managers need to aware on issues related to the emerging of ICT. The issue that
needs to be responsive on property management are as follows:
i.
ii.
iii.
leasing space but installing dedicated equipment
outsourcing facilities management where the server is maintained by solo management and the
customer is responsible for application programs
renting applications programs from an application service provider associated with systems
integration and other customised software
(amended from Dixon et al, 2005)
Furthermore Kishk et al., (2004) indicates that in property management, performance measurement is
essential due to the development of property management corresponds with the growth of cities. Thus, he
added, with the unpredictability of future demand, there will be an increased recognition of property as an
asset by both individuals and organisations. In their research, it revealed that there is a seeming lack of
structured processes for carrying out the performance measurement of properties. In Chin and Poh (1999)
research, performance indicators based on these measures;
i.
Number of maintenance contracts renewed.
At the end of the usual three year maintenance contract (in case of Singapore), the client assesses
the individual property manager’s performance. In this way, the number of maintenance contracts
secured and renewed will reflect the performance and success of the property management units.
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Proceedings of Applied International Business Conference 2008
ii.
Number of successful tenders
The professionals fees in each management contract are charged on a per unit per month basis. If
clients are prepared to accept the higher fees in each management contracts are charge on a per
unit management, it would reflect the client’s confidence in the company and the level of service
that it provides
Number of breakdowns and complaints
A decrease in the number of residents’ complaints received and breakdown recorded would
indicate a higher quality of professional service performed. (Chin and Poh, 1999)
iii.
Based on study above, Tas et al., (1996) formulated five areas relating to property manager to sustain their
competency which are follows:
i.
ii.
iii.
iv.
v.
Conceptual- creative (the cognitive skills need for the job)
Leadership (the ability to turn ideas into productive action)
Interpersonal (skills for effective interaction with others)
Administrative (personnel and financial management of the business)
Technical (the knowledge and skills essential to producing the product or service)
Gibson and Hedley (1999) summarise all the essential elements that property managers need to do from a
range of both operational and strategic level of management functions;
i.
ii.
iii.
undertaking day to day activities
planning and making decisions about future activities
tracking progress and evaluation performance
Lam (2008) pointed out that from the strategic management point of view, managers should always review
the environmental changes and seize opportunities to improve their organisational performance in
particular the changes in market competition and customer expectations. In her study, she revealed that
professional housing services have become common strategic choices. This new term in property
management needs to be aware among property managers in Malaysia. In knowledge management,
updating current knowledge is one of the main activities.
Innovation is vital element in organisation. To ensure successful in organisation, the element of innovation
needs to be taken into account in strategic planning. One of the important strategies in knowledge
management is innovation activity. UK government had come out with Knowledge Transfer Partnership
(KTP) scheme to accelerate innovation activity in UK industry (Wynn et al.,2008). The scheme is working
closely with university as a part of the programme. The scheme has consistently delivered major business
benefits for companies with local universities across the UK (Wynn et al., 2008). Cheong (2005) had
developed competence model for professional real estate services (figure 2). In this model, obviously one
of the major components is knowledge.
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Knowledge
Service proper
Skills
Professional Real
Estate Services
Customer Satisfaction
Organisation
Technology
Service Infrastructure
Figure 2: Competence Model for Professional Real Estate Services (Cheong, 2005)
From the review of literature above it is unambiguous it is a significant for property management
companies to have essential knowledge on the property. This research focuses on property management
companies in Malaysia which are closely related to the business world. Obviously, the main target in the
business world is to gain more profit. The way to get more profit depends on various organisation activities.
The most important element in any organisation is management activities. Knowledge management, being
one of the disciplines in an organisation, has progressively become more important. In this research, there
are four areas that need to be focused to develop KM strategies in an organisation based on frameworks
developed by several authors (table 1).
3. The KM Framework for Property Management
Until the recent years, there has been relatively little effort to formulate knowledge management strategy in
the property management practice. Nonetheless, this paper identifies the gap by over viewing all models
relevant to be suited into property management that are appropriate for the property management practices.
Base on KM framework from the literature review were assessed and examined the potential to be
implement in property management. Evidence from the literature surveys were assessed and examined to
seek guidelines for the development of the potential KM strategy to be implemented in property
management practice. Several KM strategy models were use to ascertain hypothetical background to
investigate the KM strategy in property management companies. Though, it is vital to know the background
of property management companies.
According to Diakoulakis et.al (2004), knowledge management has been gradually established as a strong
methodology to support business viability, competitiveness and growth. Grenon (2000), described
knowledge management as tools aiming to provide a framework for anticipating the unknown. While
Rubenstein et al. (2001), defined knowledge management as a conceptual framework for problem-solving
that considers problems in their entirely. In addition, knowledge management can be viewed as a
conceptually complex, evolving, broad umbrella of issues and viewpoints (Smith, 2004).
Nonaka and Takeuchi (1995) differentiated knowledge management model into 4 models which are as
follows (see figure 3):
i.
ii.
Tacit knowledge to tacit knowledge which is called socialisation. It is process of sharing
experiences which creates tacit knowledge such as shared mental models and technical skills.
Tacit knowledge to explicit knowledge or externalisation. It is a knowledge creation process in
that tacit knowledge becomes explicit, taking the shapes or metaphors, analogies, concepts,
hypothesis or models.
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iii.
iv.
Explicit knowledge to explicit knowledge or combination. It involves combining different bodies
of explicit knowledge.
Explicit knowledge to tacit knowledge or internalisation. It is a process of embodying explicit
knowledge into tacit knowledge and is closely related to ‘learning by doing’.
Tacit Knowledge
Explicit Knowledge
Tacit
Knowledge
Socialisation
Externalisation
Explicit
Knowledge
Internalisation
Combination
Figure 3: Four modes of knowledge conversion (Source: Nonaka and Takeuchi, 1995)
After examining all relevant KM models, this paper accentuates on four major elements in KM to
investigate KM strategy implementation in property management. In this paper, the findings are based on
strategy below;
S1
KM Organisation Strategy
Roberston (2004) described every organisation has a unique environment, defined by factors such as:
i.
Purpose and activities of the organisation
ii.
Overall strategic direction
iii.
Organisation culture
iv.
Size of the organisation
v.
Geographic spread
vi.
Staff skills and experience
vii.
Organisational history
viii.
Available resources
ix.
Marketplace factors
Soliman and Spooner (2000) suggested that a key element in the business case is deciding how to apportion
efforts aimed at harnessing tacit knowledge versus explicit knowledge. He added and recommended that
company using the 80:20 rules, i.e. spending 80 percent of resources one approach and 20 percent on the
other. In addition, organisation needs to distinguish between data, knowledge and information. According
to Bhatt (2001) data, information and knowledge can only be distinguished from a user’s perspective. He
added, data are considered as raw facts, information is regarded as an organised set of data, and knowledge
is perceived as meaningful information. For the purpose of this research, KM activities have been identified
to stipulate level of KM organisation activities in property management. Thus ten items have been
identified which are as follows:
Table 1: Item Description for KM Organisation Strategy (KMO)
Item Code
Item Description
Organisation encourages the practice of understanding, documenting,
KMO1
archiving customer requirement.
Organisation encourages staff to transfer their working knowledge/
KMO2
knowledge to new and inexperienced staff.
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KMO3
KMO4
KMO5
KMO6
KMO7
KMO8
KMO9
KMO10
KMO11
Organisation encourages knowledge sharing among staff that attended
training, CPD, conferences and seminar.
Brainstorming, team work, work in pairs are well accepted and recognized
among staff
All responses from customer will be in close attention and dealt prior to
the next testing.
Customer’s queries will be dealt with in prompt manner
Organisations provide incentives and acknowledgement to the staff for
innovations, new ideas and sharing of experiences.
Development of policy and program to boost loyalty and to reduce staff
turnover rate.
Staff assessments are based on their individual contribution to the
knowledge development in organisation.
A special task unit being formed to manage knowledge within the
organisation.
A special task unit being formed to manage knowledge within the
organisation
S2
KM Technology Strategy
Infrastructure and technologies could support all KM processes. The level of ICT support and the kind of
ICT infrastructure needed by a consulting firm, depend on its KM strategy. The core elements of suitable
architecture are a central electronic repository of explicit knowledge focusing on knowledge as an object
(Zack 1999, Maier & Remus, 2003). At present, the emerging technology in business world is e-commerce.
According to M.M Helms et al (2008), e-commerce includes business-to-consumer (B2C), business to
business (b2b) and internal business interaction via an Intranet. They added, both e-commerce and
knowledge management rely on the Internet. In real estate, e commerce has already used widely in retail
property. However, in property management it is still at the foundation leg. Thomson (2005) suggested that
sophisticated analytical tools have emerged to help companies address optimisation of their supply chain
networks. He added, these tools allow companies to model existing and alternative supply chain networks
and identify the trade-offs in cost, service and time that must be made in developing a supply-chain strategy
that optimise their competitive position. However, the challenge is to make a distinction what type of
infrastructure and technology KM strategy is suitable for property management. Hamilton and Selen (2004)
suggest establishing web interfacing using quality function deployment (QFD) to improve service chain
network in real estate. QFD provides a chain like interface between customer needs, engineering, or design
characteristics, parts characteristics, key process interfaces for each real estate property (Hamilton and
Selen, 2004). From the literature review survey four items have been identified to be as test variables in
property management. Sub items are created under each item to specify activities of KM Infrastructure and
Technology strategy.
Item Code
KT0
KT0-1
KT0-2
KT0-3
KT0-4
KT0-5
KT0-6
KT0-7
KT1
KT1-1
KT1-2
KT1-3
KT1-4
KT1-5
KT2
Table 2: KM Technology Strategy (KT)
Item Description
Sharing Knowledge/Information
Online Messaging
Telephone
Video Conferencing
Document Management System
E-forum
E-mail
Blogs
Technical Appliances
Website
Wireless Internet Connection
Wired Internet Connection
Mobile Technology
Internet
Information Dissemination
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KT2-1
KT2-2
KT2-3
KT2-4
KT2-5
KT3
KT3-1
KT3-2
KT3-3
KT3-4
KT3-5
E-mail
Memo/letters
Bulletin Board
Website
Fax
Assisting Tools for Recording, Controlling and Tracking
Microsoft Project
Spreadsheet
Physical Document
Facilities Management Software
Property Management Software
S3
KM Culture Strategy
Culture is the way a group perceives thinks and feels in relation to problems and acquired for a group
solves a problem (Fitzek, 1999). In knowledge management context, it refers to changing corporate culture
and business procedures to make sharing of information possible (Bhatt, 2001). According to Barney
(1986), organisations which have a culture that supports and encourages cooperative innovation should
attempt to understand what it is about their culture that gives them a competitive advantage and develop
and nurture those cultural attributes. This further supported by Park et al (2004) who mentioned that
cultural change is extremely difficult, time consuming and frustrating process for organisation. Lopez et al
(2004) outlined collaborative culture that need be stresses in knowledge management culture;
i.
a long term vision and advance management of the change
ii.
communication and dialogue
iii.
trust and respect for all individuals
iv.
teamwork
v.
empowerment
vi.
ambiguity tolerance
vii.
risk assumption
viii.
respect and diversity encouragement.
(Lopez et al, 2004)
However, Park et al (2004) stressed out that deep assessment of an organisational culture requires more
than a questionnaire. He added, learning about the history of the company, visiting the place, talking to
employees and observing behaviours can be more effective. The key to create organisational learning
culture through KM lies in the exchange of mental models and their institutionalisation in a firm’s
operational structure by transforming the rules of decision that until then have dominated its behaviour,
thus enabling it to carry out more effective actions (Lopez et al, 2004). The term social complexity is assert
by April (2002) refers to KM culture. Social complexity is when the source of advantage is known, but the
method of replicating the advantage is unclear (April 2002). She added, social complex responsibility
combinations depends upon large numbers of people or teams engaged in co-ordinated action such that few
individuals, if any, have sufficient breadth of knowledge grasp the overall phenomenon. 23 items have been
identifies under KM Culture activities as a variables that were test among property management companies.
KMC1
KMC2
KMC3
KMC4
KMC5
KMC6
KMC7
KMC8
KMC9
KMC 10
KMC 11
Table 3: KM Culture Strategy (KMC)
Sharing information together
Working closely with others
Team oriented work
Trust
Fairness
Enthusiasm for the job
Autonomy
Flexibility
Supportive of Employees
Tolerance of Failure
Rule Orientation
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KMC 12
KMC 13
KMC 14
KMC 15
KMC 16
KMC 17
KMC 18
KMC 19
KMC 20
KMC 21
KMC 22
KM 23
Praised good performance
Experimentation
Demanding of Employees
Take Advantage of Opportunities
Having a Good Reputation
Being Exact
Decisiveness
Problem Solving
Adaptability
Developing Friends at Work
Being Thoughtful
Security of Employment
S4
KM Human Resource Strategy Strategy
Human resource is the most vital component in organisation. Because of human character itself is too
complex, thus to manage human in organisation is difficult. Traditionally, firm constantly measure
performance based on tangible assets such numbers of employees and assets. However, as the globalisation
takes place, the term of intellectual capital is emerged. Organisation should facilitate knowledge sharing
among staff. Hislop (2002) found out three major elements that organisational commitment may affect a
number of attitudes and behaviours relevant to the management and sharing knowledge
i.
ii.
iii.
attitudes of worker towards knowledge-sharing activities
extent to which workers actively participate in KM and knowledge sharing activities
loyalty of workers to their organisation and the likelihood that they will choose to remain
with it.
(Hislop, 2002)
According to Aliaga (2000), the distinguish characteristics of human capital (for example, ideas, training) is
that it is tangible. He added, from an economic perspective, human capital encompasses both knowledge
and intellectual capital because both are intended revenue for the firm. In addition, Soliman et al (1999)
recommended the following strategy for managing the human resources knowledge:
i.
ii.
iii.
iv.
reviewing the drivers and strategies for human resources knowledge management efforts
gaining the commitment and understanding from human resources executives
identifying priorities within the human resources department
implementing knowledge management support system within the human resources
department
v.
managing the expectation of employees
(Soliman et al, 1999)
Clarke and Staunton (1989) outlined model of knowledge management process that can be used in mapping
human resources knowledge (figure 4). The model integrates four concepts; construction, embodiment,
dissemination and use of knowledge. These concepts are blended together to ensure the successful of KM
Human resource strategy.
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Construction:
Creation, theft,
bad mouthing
and
reinterpretation
Embodiment:
Transformation of
tacit knowledge
into process &
practices,
machinery,
Human Resources
Management:
Monitoring, measurement and
intervention in construction,
embodiment, dissemination
and use by knowledge people.
Dissemination:
Distribution of
embodied
knowledge
throughout the
value chain
Use:
Apply disseminated,
embodied knowledge
to problems to make
knowledge work
Figure 4: Model of Human Resource Management in Knowledge Management Strategy (Adapted
from Clark and Stauntan, 1989)
10 variables have been drafted out in order to accomplish KM strategy investigation on property
management (table 4). These variables were tested for property management companies.
KMHR1
KMHR2
KMHR3
KMHR4
KMHR5
KMHR6
KMHR7
KMHR8
KMHR9
KMHR10
Table 4: KM Human Resources Strategy
Staff taking own initiatives to independently upgrade their competency and skills.
Staff encouraged by the organisation to continue their professional
course/education.
Peers provide informal training related to knowledge management within the
organisation.
Staffs capture and use knowledge obtained from other industry sources.
Staffs capture and use knowledge obtained from other public research institutions
and universities.
Staffs use formal mentoring practice including apprenticeship.
Staff regularly updating databases of good work practices, lesson learnt, or listing
of experts.
Staffs feel elated by incentive and rewards schemes provided by the organisation.
Staff plans their projects and progress monitoring systematically for self efficient
recording.
Staffs have awareness of sharing knowledge among peers as well as within the
real estate fraternity.
From the above literature, the conceptual model that is being tested to property management companies is
drawn up. The four elements are based on five key areas are adopted and form a basic of the formulation of
the KM strategy model. All these elements form one main pillar which is called as an integrated resources
knowledge concept (Figure 5).
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INTEGRATED R ESO UR CE KNO W LEDG E
Cultural Environment
People
Knowledge Areas
Organisation
Knowledge Asset
Environment
Analyses Knowledge
Technology
Knowlede Process Orientation
Figure 5: KM Strategy Conceptual Model for Property Management
4. Conclusion
This paper tries to explore the possibilities to develop the KM strategy conceptual model on property
management companies in Malaysia. In doing so, the KM strategies which were formulated as a conceptual
model is applied for examining 25 registered property management companies. The conceptual framework
of KM strategies was developed to catalogue the multiplicity in KM activities. This study only touches on
conceptual method to implement knowledge management by drafting knowledge management strategy.
However, some pilot study needs to be done for further research. It will be base up on the conceptual model
design based on cultural environment, knowledge area, and knowledge asset, and technology, critical
performance, integrating resource knowledge, process orientation and knowledge management system. The
aim is to identify a conceptual model based on various literature and model design by other researchers in
other area.This model needs to be tested among the property management companies in order to analyse the
significant of KM strategy models in these particular of business.
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