Massive Income

Introduction to Enterprise Situation-Handling

Enterprise situation-handling is never simple. It is invariably a multi-objective exercise with conflicting issues and necessities to resolve dilemmas. Normally, important situations are evolving, and time is of the essence; slow situation-handling will cause lost opportunities or deteriorating situations. Compared to the personal case, within the enterprise environment it becomes important to recognize that completed situation-handling consists of three sequential “action” tasks where the last two rely on the results from the preceding ones. Thus, valuable time may be consumed from the instant a situation is recognized until its handling is completed. This means that situation-handling may often need to be expedited to be effective. However, that is not simple. As a rule, important situations, in addition to being multi-objective, also tend to be somewhat unfamiliar with new angles and lacking in full information. Hence, situation-handling also becomes an exercise in uncertainty.
Enterprises employ reference models in ways similar to the employment of mental reference models by people. Some reference models are culturally embedded as stories or as conventions of what people share, such as “this is the way work is done here.” Others are embedded in the enterprise’s structural IC in the form of practices, manual and automated systems and procedures, enterprise policies, and the manner in which the enterprise and its work processes are organized.
From a theoretical perspective, enterprises have situation-handling and organizational capabilities that are similar to those on the personal level. The primary tasks are also similar to those of personal situation-handling as indicated in Figure 6-1. However, their functional characteristics and underlying mechanisms are different. Although complicated, many are open to observation and analysis, and that permits insights which on the personal level may only be speculative.

To a large extent, the enterprise capabilities are determined by the personal proficiencies of the organization’s employees. However, they also are shaped by structural resources such as systems, procedures, operational and managerial practices, organizational structure, availability of structural knowledge, and quality of information at the point-of-action. These resources are partly possessed by individuals but are also delivered through structural IC assets. Other factors such as managerial and enterprise attention and priorities influence the ability of the enterprise to act appropriately and effectively in many situations (Davenport & Beck 2001).
In the enterprise, routine situations—recurring day-to-day business operations such as many small steps in manufacturing, payroll, financial transactions, or basic order fulfillment—are handled automatically or by people who work with established systems and procedures within the organizational structure and according to the manner in which work is organized. All these mechanisms are designed to handle work effectively and efficiently to fulfill enterprise objectives. In reality, most of these mechanisms bear little resemblance to human mental mechanisms. However, from a more abstract systems perspective, they perform functions that are quite similar to the personal case. For decision making this is illustrated in Figure 6- 2. Instead of knowledge and mental models, the enterprise draws upon general capabilities such as employee competence and behaviors, structural IC, and the embedded capabilities in systems and procedures as discussed earlier.
There is a pronounced difference between information and knowledge within the enterprise. Situation information, we emphasize, is very different from reference models and other knowledge assets. Effective enterprise situation-handling requires good personal and structural knowledge (IC) assets and, separately, good information about situations. Hence, effective information management becomes an important aspect of the enterprise’s ability to act effectively in both routine and complex situations. This attains particular importance when dealing with unexpected events where the need for comprehensive information may be required to understand the situation appropriately.3

Taken from : “People-Focused Knowledge Management” How Effective Decision Making Leads to Corporate Success.