Introduction

The growing interest in knowledge management (KM) has been fuelled by real social, technical and economic trends (Raich, 2000; Prusak, 2001). Globalisation is considered to be the most obvious and clearest of these. The opportunity for firms to bring new products and services to wider markets has increased the intensity of competition. To succeed in such an environment, organisations need to better utilise their knowledge resources for competitive advantage and develop a greater ability to act and adapt. Advances in digital, wireless and optical technologies have created a new storage and communications capacity that has, in turn, generated an abundance of knowledge artefacts. This poses great challenges to organisations' information management processes. In particular, the transformation from the traditional industrial economy to the knowledge-based one has led to a decline in the relative importance of tangible assets, and demands a paradigm shift to a reliance on intangible knowledge and intellectual capital.

The basic assumption of KM is that organisations that manage their knowledge better will deal more successfully with the challenges of the new business environment. KM is considered to be central to achieving process and product improvement, executive decision making and organisational adaptation and renewal (Earl, 2001). However, while there is widespread agreement on the importance of knowledge with respect to the struggle for economic success, there are differences among researchers and practitioners alike in what constitutes useful knowledge and the ways in which it should be managed (Handzic & Hasan, 2003). This is because KM theory is relatively new, prone to misconceptions and misappropriations and there are many unresolved issues that need to be dealt with before KM evolves into a mature discipline. The purpose of our research is to address the existing gap between KM theory and practice as suggested by Alavi & Leidner (2001).

The main focus of the paper is on the development and application of a model for conducting a KM audit. It is based on the assumption that before practitioners can embark on the development of a KM initiative, they need to understand the key elements associated with KM and their inter-relationships. They also need to analyse ways knowledge is managed by the organisation and the degree to which current practices address the goals of the organisation. The deficiencies or gaps detected from such an audit can then lead to the development of a KM initiative aimed at supporting work more effectively thus ensuring that the goals are well met.

The paper is organised into five sections beginning with this introduction. The next section discusses the proposed model for auditing KM practices and the subsequent section illustrates the application of this model to a particular case. The penultimate section provides a summary of major findings along with recommendations from the KM audit. The final section closes the paper with some concluding comments and general observations.

Development of the KM audit model

This section draws from past research and experience in order to develop a more comprehensive and holistic model for auditing KM. First, the section looks into some recent efforts at developing KM models and discusses their distinguishing characteristics. Then it presents an integrated KM audit model that provides a link between various existing approaches to KM and serves as a basis for analysing KM practices in organisations.

Overview of the existing KM models

The existing KM models encompass a broad range of issues, methods and theories that differ in scope and focus. In order to make sense of this variety, several authors have attempted to summarise and categorise diverse approaches (e.g., Holsapple & Joshi, 1999; McAdam & McCreedy, 1999; Alavi & Leidner, 2001; Earl, 2001; Kakabadse et al., 2003). This review identifies the following major groupings.

First, there is a group of knowledge-oriented models such as those coming from the intellectual capital (IC) work of Sveiby (1997), McAdam & McCreedy (1999) and the economic school in Earl's (2001) taxonomy. The list of types of knowledge (e.g., explicit, tacit, what, how) and perspectives (e.g., administrative, epistemological, economical) elaborated in Alavi & Leidner's (2001) review also fits this category. From the IC perspective, KM aims to create value from knowledge assets by maximising the inter-relationship between different types of organisation's IC. In contrast, Earl's (2001) commercial category is more concerned with protecting and exploiting a firm's knowledge to produce revenue.

The next popular group of KM models are process oriented such as Nonaka's (1998) knowledge spiral (SECI) and Wiig's (1993) knowledge cycle. Essentially, these models see development of an organisation's IC as the result of the organisational dynamic knowledge processes. Thus, SECI considers four modes (socialisation, combination, externalisation and internalisation) through which tacit and explicit knowledge are exchanged and transformed. Others, like Alavi & Leidner (2001) treat a variety of knowledge creation, storage, transfer and application-related activities.

A third major group of models focuses on social and/or technological enablers of knowledge processes. Nonaka & Konno's (1998) model of 'ba' (Japanese word for place) suggests four types of ba (originating, interacting, cyber and exercising) that act as promoters of knowledge processes (socialisation, combination, externalisation and internalisation). Earl's (2001) technocratic school also belongs to this category. It emphasises the role of ICT in capturing experts' knowledge, documenting processes and storing best business practices in formalised knowledge bases; or locating the person who has the needed knowledge in directories or yellow pages of experts. Hahn & Subramani's (2000) KM systems framework is another similar example. On the non-ICT side, Earl's behavioural school addresses issues of organisational culture, structure and physical spaces that facilitate knowledge sharing and the pooling of knowledge by networked employees.

The fourth group of emerging contingency models questions the widely held belief that knowledge processes and tools and methods for promoting the creation, sharing and leveraging of knowledge are universally appropriate. From the universalistic perspective, each of the four Nonaka's (1998) SECI modes is expected to enhance the effectiveness of KM by providing individuals and groups with the knowledge needed to perform their tasks. More recent research by Snowden (2002) and Becerra-Fernandez et al. (2004) departs from the above-mentioned universalistic perspective by arguing that the effectiveness of KM initiatives is contingent upon the task and context in which the knowledge is being used. Empirical evidence provides considerable support for the contingency view of KM.

Finally, this review identifies a group of models that emphasise the evolutionary nature of KM. Von Krogh et al.'s (2000) three-stage model (locate and capture, make use of what is available and enable new knowledge creation for innovation) and Gottschalk & Khandelwal's (2003) four-stage growth model for KM technology (end user tool, who knows what, what they know and how they think systems) belong to this group. According to Von Krogh et al. (2000), different stages are related to the progression of organisational goals from risk minimising, through efficiency-seeking to innovating.

The existing KM models have been criticised in literature as being incomplete and lacking double-loop learning (Liebowitz & Megbolugbe, 2003). This is seen as a major omission, as iterative outcome feedback is an important element of KM that promotes a learning organisation. Several models that address this issue propose a more parallel and cyclical KM approach (AA, 1998; Hofer & Spek, 2002; AS 5037, 2003). Essentially, these models state that the key phases in development and implementation of KM do not form a linear process, but while the phases do build on each other, they can be used either flexibly or iteratively.

Handzic & Hasan (2003) identified a number of projects trying to bring together various perspectives on KM in order to provide more holistic views and common ground for KM research and improved methods for KM practice. Among notable developments reviewed are: Handzic's knowledge–process–enabler framework, Hasan's activity theory approach and the Australian KM Standard. The next section describes the latest conceptualisation of KM that builds on earlier work by Handzic (2003).

Description of the proposed KM model

Our proposed KM audit model is presented in Figure 1. The figure depicts the model's six main components and their inter-relationships. The proposed model extends the core knowledge—process–enabler framework by incorporating additional driver and outcome elements, as well as contextual contingencies. Our rationale for the choice and arrangement of elements in the model of Figure 1 is as follows.

Figure 1.

The proposed KM audit model.

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In its proposed extended form, the model recognises explicitly that KM is driven by forces from its surrounding external environment. Acting as strategic levers through which an organisation delivers its desired outcomes, drivers prioritise projects competing for its limited resources. Based on past observations (Von Krogh et al., 2000), typical strategic drivers of KM found across business and government entities include risk mitigation, operational excellence and innovation. These drivers determine the way knowledge is managed by focusing organisational activities to existing or new knowledge and on knowledge processes or content. Therefore, organisations need to have a clear picture of what they wish to achieve and consider how effective KM can support their drivers.

In response to earlier expressed criticisms of models lacking double-loop learning (Liebowitz & Megbolugbe, 2003), the extended model also incorporates the KM outcome component. It takes into consideration that KM creates value for the organisation in the form of improved productivity, innovation, agility or reputation. While it may be hard to identify all the immediate benefits from a KM initiative, organisations need to get some feedback on the degree to which KM fulfils their articulated drivers.

Finally, the extended model promotes a contingency view of KM, which argues that no one solution is best under all circumstances. Various knowledge task, environment and worker related factors influence the 'right' choice. Organisations need to select among multiple possible paths, the one that best fits their particular set of circumstances.

The model core characterises basic components of a KM solution or initiative. It emphasises the importance of both social and technical factors in enabling and facilitating of knowledge processes. Organisational structures, cultures and technologies are tightly interconnected with corresponding close interactions. When seeking to redesign and change organisations, it is important to find the right balance between these elements. In situations of increased size and cost of labour, technology may be a vital tool to successful KM. In other cases, increasing the feeling of community and measures of quality may be more important.

Furthermore, the model recognises the dynamic nature of knowledge processes. To be of value to organisational performance, knowledge needs to constantly flow and grow. However, tensions exist and tradeoffs are needed between knowledge exploitation and exploration. If an organisation focuses solely on exploitation, it may develop competency traps (i.e., misapplying known solutions to novel problems). If it focuses solely on exploration, it can prepare for a future, but fail to survive until such a future arrives.

Finally, the model incorporates the knowledge stock component that synthesises different perspectives on knowledge. Two considerations from previous discussions in this paper are particularly important: what knowledge is valuable in an organisation and where is that knowledge located. Valuable knowledge clumps need to be identified and their flow through organisation enabled, taking into account that tacit knowledge is sticky, slow to move, and hard to imitate, compared to explicit. It is also important to avoid falling into a competency trap by remembering not only rules and routines but also the rationale for these organisational features (March, 1994).

The major challenge for an organisation is to develop a KM solution that will enable knowledge workers to effectively perform their tasks within the organisational context. The model in Figure 1 emphasises the importance of several related factors that the KM audit needs to take into consideration before developing recommendations. The structure of the model serves as a backbone of the audit methodology outlined in the following section.

Application of the KM audit model to local government

As an illustrative example, this paper demonstrates application of the KM audit model to the local government environment. Local governments are public organisations in charge of a wide range of administrative, service, development and political functions. They play an increasingly important role in promoting local development activities, strengthening democratic processes and ensuring the welfare of citizens in circumstances of growing uncertainty and ambiguity. KM can help local governments to be successful in dealing with these post-industrial age challenges by improving their capacity to adapt to changing external environment and their community characteristics (Anttiroiko, 2006). This requires a special emphasis on the design of KM strategies.

The proposed KM audit model can assist local governments to measure and plan key aspects of their KM strategies and their impacts. Local actors can assess their current 'state of play' in KM by working through a series of guidelines. These guidelines allow organisations to identify their main KM drivers, enablers, processes, stocks, outcomes and contingencies. What follows is a description of the case, method and empirical results from the conduct of one specific KM audit using the model.

Case description

The focus of this case study is on the city government of Sarajevo, the capital of Bosnia and Herzegovina (BiH) and the European 'region of the year' for 2006 (www.tery.org). Sarajevo is an interesting case to study as it is going through a period of rapid change at the current time. The city is trying hard to revitalise itself after the protracted siege and to re-establish its links to the rest of Europe and the world. It is also going through a process of transformation from a closely controlled society to an open environment with a high level of personal and economic freedom.

Following recent restructuring, there are now four inner-city municipalities that are small and densely populated, and five outer-city municipalities, most of them covering vast areas with less dense populations. The four inner-city municipalities have a strong developmental focus with an orientation towards banking, finance, trade and consulting. They also boast pro-active universities and leading business partners. They have, in common with other European cities, a forward looking attitude and a high level of social capital (Anttiroiko, 2006). In comparison, the outer-city areas suffer from not having a university and from being dependent on domestically oriented and labour-intensive rural industries. They are also sparsely populated areas with poorly resourced local administration.

What is critical in any local government is its constitutional or legal framework, territorial dimension and political nature. In the case of Sarajevo, municipal councils serve as multi-contact organisations and multi-sectoral service providers. In total, nine councils with 99 departments provide government services across two capital areas (Table 1).

Table 1 - Structure of the local government in Sarajevo.

Full table

It was of interest to this study to audit current KM practices in local councils and to try to identify any significant differences between the respondents depending on their organisational settings, functions and environmental relations. Of particular interest was comparison between the approaches to KM in the inner-city and outer-city councils. The study also served as a pilot prior to undertaking a full-scale national survey of KM adoption in public administration in BiH (forthcoming).

Research method

A survey questionnaire was used as a preferred method for data collection based on time and emotional costs to the respondent (Vaus, 1995). The theoretical model shown in Figure 1, together with insights from prior related survey research (AA, 1998; Zhou & Fink, 2003; Zyngier et al., 2003; Pillania, 2006) informed the basis of the questionnaire used in this study. A list of the questionnaire items is available in the appendix to this article. It provides the benefits of consistency, balance in coverage and capture of individual opinions/attitudes. Modifications were made to the wording where necessary to reflect specifics of the organisation being studied and to achieve consistency in framing among the questions.

Target respondents in this research were executive officers from different council departments. Council demographic details were obtained from information provided on the website. Personal demographic sought from the respondents was limited to their department and position for the purposes of verifying their level of seniority. Questionnaires were distributed to the recipients personally by one of the researchers together with an explanatory cover letter. The distributed questionnaires were completed in the respondents' own time and without the researcher being present. A total of 79 responses were received to 99 surveys distributed, achieving a response rate of 80%.

In replying to the questionnaire, the respondents were required to rate the extent of their agreement with each statement relative to maximum and minimum end-points of a seven-point Likert scale (7 being the maximum and 1 being the minimum). The collected responses were encoded, entered into a computer and then analysed using the Microsoft Excel spreadsheet program. Descriptive statistics were calculated for each variable from the responses obtained to each of the items. Commonly used, but nevertheless arbitrary, cut offs of '<3', '3–<5' and '>=5' were used to indicate whether the value was 'low', 'moderate' or 'high'. Relevant descriptive statistics and any uncharacteristic results are described in the following section of this paper.

Empirical results

The mean and/or frequency scores obtained for participants' perceptions of different KM practices studied were used to identify the prevailing patterns and ensure plausibility of findings as suggested by Miles & Huberman (1994). High scores indicated strong areas, while moderate and low ones pointed to potentially weak areas within and across practices. These tendencies are shown graphically in Figure 2, Figure 3, Figure 4, Figure 5, Figure 6, Figure 7, Figure 8. The presentation begins with drivers of KM and continues with key elements of KM solutions, their outcomes and contingencies.

Figure 2.

KM alignment with strategic goal.

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Figure 3.

Important knowledge types for local objectives.

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Figure 4.

Sources of local knowledge.

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Figure 5.

Local knowledge processes.

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Figure 6.

Local knowledge enablers.

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Figure 7.

Outcome achievement from KM.

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Figure 8.

Social and technical enablers by local contexts.

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KM drivers

Past empirical studies of strategic drivers from developed nations around the world indicate that most public (and private) organisations focus on satisfying customer needs through improved efficiency and effectiveness, rather than on development and innovation (Zyngier et al., 2003). The following represents an inference of the KM drivers in the developing country of the study.

At the time the KM audit was initiated, BiH government had defined 'improving efficiency and effectiveness of public administration' as its normative strategic goal and a pre-requisite for joining the EU by 2010 (Handzic, 2006).

The audit results shown in Figure 2 reveal similar efficiency and effectiveness-seeking motives for KM in the case of local government. It is reflected in 63% rate of acknowledgements by responding local actors that this strategic goal is a highly important part of their KM. This is compared with the small number of 17% low and 20% moderate responses.

However, much more needs to be done to ensure successful local government in the long term. According to Anttiroiko (2006), local government needs to be not only more efficient and effective in what they do, but also more capable in creating new trends by innovative and proactive actions. With this view in mind, the focal city may need to revisit and revise both its business and KM motives.

KM solutions

KM solutions can be viewed as configurations of inter-related knowledge enablers, processes and stocks. In theory, organisations need to implement KM solutions that combine those processes and enablers that have the best potential to enhance knowledge and add value to the firm. In practice, risk minimisers typically concentrate on KM solutions around capturing and locating valuable internal and external knowledge, efficiency seekers make maximum use of the existing knowledge through transferring and sharing practices, and innovators focus on new knowledge and creating conditions necessary for enabling successful innovations.

The key learning that emerges from past research is that the effectiveness of any knowledge process depends on the enabling condition in which knowledge is being generated, transferred and applied, and that the choice of the most appropriate process to manipulate knowledge stocks is highly contingent upon the nature of that knowledge (Snowden, 2002). Therefore, evaluating weak and strong points of knowledge issues is a necessary step in the successful implementation of journey.

First, a knowledge stock-taking exercise is important for identifying knowledge gaps and changing needs. On the basis of the responses given by informants in this case (see Figure 3), it is possible to establish that the city government possesses the high levels of important service, method and citizen-related knowledge needed to perform its administrative, service, development and political functions. However, it has only moderate expertise of the business and regulatory environment. This can be attributed, in part, to the economy in transition and, in part, to the changing political landscape due to European integration processes.

It is also possible to establish from the study results that about half (57%) of the local knowledge base is concentrated in government documents, systems and procedures. A further 24% resides in government employees and the remaining 19% in their external relationships (see Figure 4). Nissen (2006) warns that explicit reports, documents and procedures that are developed as work products fail to substitute for the rich tacit knowledge possessed by government employees. By realising that knowledge resides in people as well as in artefacts, it is possible to make use of more effective KM processes to reach organisational goals.

Next, it is important that organisations implement KM solutions that combine those processes that have the greatest potential to enhance knowledge and add value to the firm. Handzic & Hasan (2003) recommend that all sources and forms of organisational knowledge have to come into play in order to maximise business-specific working knowledge. This study results in Figure 5 show that current local approaches to KM are divided between strategies that explore new knowledge sources and those that exploit existing knowledge assets.

More specifically, the results reveal high use of processes to acquire new needed knowledge and close the existing gaps in terms of gathering intelligence and looking for ideas. With respect to existing knowledge, the results show that a greater emphasis is placed on transferring explicit knowledge (e.g., best practices, lessons learnt and documents) than on sharing tacit knowledge (e.g., people's ideas and experiences). The result for sharing indicates only moderate use of this practice. This is a major challenge for city government as Nissen (2006) warns that organisations may develop a false sense of security when relying too much on explicit documentation.

Finally, to create a positive knowledge-creating environment, managers need to propose, select and design appropriate socio-technical interventions to support knowledge processes within an organisation. The role of social factors such as leadership, culture and measurement is seen primarily in creating an organisational atmosphere conducive to knowledge flows. Technical solutions can facilitate in structuring information and effectively retrieving documents. They may also help in connecting people and removing the geographic and time barriers. The audit results, depicted in Figure 6, reveal that local KM solution designs combine highly supportive leadership, culture and technology, but only moderate measurement.

Overall, the case indicates that respondent local authorities rely on both explicit and tacit knowledge resources, and focus on a combination of social and technical enablers when creating conditions to support knowledge creation and transfer in organisations. This is different from past empirical studies conducted in Western Europe, Australia and U.S.A. that show a much greater reliance on explicit knowledge, storage and technological enablers of delivery in surveyed public and private sector organisations (Zyngier et al., 2003). This difference can be attributed to a greater need for flexibility and strategic adjustments to cope with restructuring uncertainties and ambiguities in the context of Sarajevo.

KM outcomes

Lastly, KM produces true added value only when knowledge is applied to marketable products and services. Therefore, this section addresses major outcomes resulting from local government KM initiatives. Consistent with KM drivers, Von Krogh et al. (2000) categorise possible KM outcomes into three main classes: knowledge retention, efficiency/effectiveness improvements and innovation.

To be successful in retaining knowledge, organisations need to: not let people leave, mentor and coach, share best practices, document and share lessons learned (Frank, 2002). To be successful in innovation, organisations need to take a strategic view of knowledge, formulate knowledge visions, tear down knowledge barriers, develop new corporate values and trust, catalyse and coordinate knowledge creation, manage the various contexts involved, develop a conversational culture, globalise local knowledge and localise global knowledge (Nonaka & Nishiguchi, 2001). For enhancing efficiency and effectiveness, organisations need to provide better knowledge, change organisational processes and culture, and employ an appropriate mix of technologies to enable access to the knowledge that people need, at the time they need it, in the form that they need it (Rollo & Clarke, 2001).

Results in Figure 7 indicate that the local KM programme is largely successful in accomplishing its strategic goal (of improving efficiency and effectiveness of public administration). This is reflected in the majority of 77% high responses, as opposed to only 8% low and 15% moderate responses. However, because of the highly subjective nature of these assessments one needs to be cautious when interpreting them. More formal and objective metrics need to be developed and instituted to track different KM accomplishments over time.

KM contingencies

A contingency view of KM proposes that no one approach is best under all circumstances. Instead, organisations need to choose, among multiple possible paths, the one that best fits their set of circumstances. The assumption is that only the choice of the appropriate path will lead them to ultimate success. One of the critical aspects of a KM audit is to identify disconnects between the organisational environments and their KM programmes. In this way, the audit may point to changes in the KM solutions needed to support the knowledge goals. Figure 8 highlights two key elements of the local KM solutions (social and technical enablers) in the contexts of inner-city and outer-city councils.

The audit provides empirical support for the contingent view of KM. In particular, the results shown in Figure 8 indicate systematic differences between the social and technical elements of KM depending on organisational inner-city or outer-city setting. The results reflect a transition to a high-tech trajectory supplemented by social initiatives as a major KM approach in inner-city administration. In contrast, outer-city administration responds to external pressures and challenges primarily by reforming organisational social environment and relying less on technology.

Discussion and recommendations from the KM audit

The results of this audit have a number of important implications for city managers in continuing their KM journey. This section provides a summary of main findings and makes recommendations for changes in the local KM programme in the light of identified weaknesses and development opportunities. Overall, the results of the KM audit can be summarised within three categories: strategic alignment of KM; strengths and weaknesses within KM solutions; and synergies between KM programmes and organisational contexts.

Strategic alignment of KM

There is wide recognition that a balanced integrated KM approach should support the organisational strategic drivers. Different organisations may have different reasons for starting KM and it is important that they consider carefully what is important to them and why. This case study illustrates KM issues specific to local government that currently seeks improvements in efficiency and effectiveness of its public service. Analysis of key KM components allows us to determine whether the current KM programme is matched well with the relevant organisational drivers. It also enables us to identify opportunities for further development. Hopefully, such understanding can improve KM decision making and implementation.

With respect to catering for current drivers, the audit shows some mixed (moderate and low) responses throughout the local government. Although strategic goals have been articulated in government strategy documents at the time of this study, the audit suggests that they need to be revisited, defined and disseminated more effectively to various stakeholders. This should not only improve their understanding of these drivers, but also allow for their input into any future changes and refinements.

Strengths and weaknesses within KM solutions

This audit identifies a number of strengths and weaknesses within KM solutions. Success strategies cannot be created without a proper knowledge base. One of the key questions that relates to KM in local governments is whether authorities have the critical knowledge in service, citizen, business, method and regulation areas to create successful strategies. The knowledge diagram shown in Figure 3 is used to identify gaps. The pattern illustrated in this figure reveals a contrast between comparatively good (high) knowledge of citizens and government services and methods, and poorer (moderate or low) grasp of business and regulatory environments. As for the major sources of that knowledge, Figure 4 illustrates that it is spread among organisational artefacts, people and relationships. This requires implementing processes, which address weak points and exploit strong aspects of knowledge assets.

The design of successful KM solutions requires processes, which balance the exploitation of existing knowledge and exploration of new knowledge. The knowledge process diagram in Figure 5 is used to identify instances of strong (high) and weaker (moderate or low) knowledge flows before defining and planning necessary improvements. On strong side, the pattern delineated in this figure reveals that city government uses exploration to close the existing knowledge gaps by looking for ideas and gathering intelligence. The case further illustrates that explicit knowledge documentation and lessons learnt flow soundly. In contrast, modest sharing of tacit knowledge calls for a remedial socio-technical intervention.

There are many socio-technical mechanisms available to enable and facilitate knowledge processes in organisations. Managers need to combine those that have the best potential to foster knowledge and add value to their organisation. The knowledge-enabler diagram presented in Figure 6 can help to identify which socio-technical mechanisms are implemented relatively more or less than others in supporting knowledge processes. From the pattern illustrated in this figure it can be noted how technology, leadership and culture initiatives appear to be undertaken by city government to a high extent, while measurement practices seem to be considered only moderately. The adoption of the KM model proposed in this paper may help to improve the measurement situation in the future.

Synergies between KM programmes and contexts

Initiatives that combine appropriate knowledge stocks, processes and enablers create value for the organisations in the form of performance outcomes. As noted earlier, no solution is best under all circumstances and organisations need to choose the one that best fits their set of circumstances. This case study illustrates how inner- and outer-city authorities rely on different mix of socio-technical systems to achieve similar outcomes. The pattern in Figure 8 reflects a relatively more prominent role of technology in inner-city administration, and a relatively greater emphasis on social factors in outer-city municipalities. This is consistent with their regional, cultural, industrial and other contextual characteristics.

In summary, inner-city councils are larger and better equipped to deal with their wider and more demanding customer base. Therefore, it is not surprising to find their high reliance on technology supplemented by supportive leadership and culture. Outer-city councils are smaller in size, poorly resourced and financed. Despite this, they have been operating relatively successfully by using informal structures and cultures, and by relying on people to complete many of the knowledge processes with a relatively minor support of technology. While this is not inappropriate for a small organisation, it may become an issue over a longer period of time. If the explicit knowledge base increases in size or key people (tacit knowledge sources) leave the organisation, then a more formal technology-based approach may become relevant even if the social processes continues to play an important role in the KM success.

The overall tone of this case study is positive. The visualisation and analysis of key elements indicate that KM is fairly well aligned with and appears to be successful in accomplishing the stated public service goals in the context of local government. However, there is room for further improvement in a number of knowledge issues. There is also an opportunity for further development. The greatest challenge for city managers is to move local government in the direction of innovation by consciously and strategically adopting KM programs.

Conclusions

This research was motivated by the gap between KM theory and practice identified in the past KM literature. In order to gain deeper insights into these two related aspects of KM and bridge the existing gap, we approached local government as a knowledge organisation and addressed the problem of KM audit.

By focusing on KM audit, we are able to make some contributions concerning: (i) methodological issues, more specifically, offer a holistic KM model and its key components and relationships; and (ii) the usefulness of KM audit for establishing knowledge needs, support mechanisms and benefits derived from KM for the organisation.

The proposed model enabled us to take the holistic view of KM and determine how well the studied local councils managed their knowledge stocks, processes and socio-technical systems. The audit also provided a measure of the initial need for, as well as final effect of KM. The guidelines given for the 'good practice' are somewhat arbitrary, but can be taken as a benchmark value for similar urban and rural municipalities.

By working through a series of checks on key KM components, we acquired a valuable sense of where local government is within the evolutionary development in KM, and were able to recommend a KM plan for the future. In summary, achieving the success of KM implementation requires an improvement in current figures and the resultant progression of the organisation from an efficiency seeker to innovative government.

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Appendices

Appendix

Table A1

Table A1 - KM questionnaire items.

Full table

Acknowledgements

This study was supported by a research grant from the Ministry of Science and Education, Canton Sarajevo.

About the authors

Meliha Handzic is currently Associate Professor at Sarajevo School of Science and Technology, a partner of the University of Buckingham, U.K. Prior to that she taught and led a research group in knowledge management (kmRg) at the University of New South Wales, Australia, where she also received her Ph.D. in Information Systems. Meliha's main research interests lie in the areas of knowledge management and decision support. She has published on these topics widely in books, journals and conference proceedings.

Amila Lagumdzija is Lecturer at Sarajevo School of Science and Technology. She completed her bachelor of Information Systems at DePaul University, U.S.A. and MBA at Schiller International University, Germany. Amila teaches a wide range of subjects in Information Systems. Her research work is primarily focused on the social and organisational aspects of knowledge management. She has published and presented internationally in the field.

Amer Celjo is Lecturer at Sarajevo School of Science and Technology and Application Manager at MIMS Group. He completed his bachelor of EET at Oklahoma State University, U.S.A. and MBA at Schiller International University, Germany. Amer's interest is in Information Technology. His work focuses on researching technical factors contributing to effective organisational learning and knowledge management.