Wednesday, March 9, 2011
Knowledge Management Drivers
1.Downsizing and restructuring have broken up existing networks and the "unsung experts" that organizations have counted on to invent, discover, and transfer knowledge and best practices have been lost.
2.Massive investments in information technology. Far more work at all levels, in all industries, is done in front of a computer terminal and around a meeting table than on an assembly line. IT investments provide access to information across and outside the corporation almost instantly. It also provides a way to create information and capture knowledge. This knowledge is invisible and, for all practical purposes,operationally inaccessible to the rest of the organization.
3.Customer contact. Employees at all levels are in direct contact with customers. What they are learning about their needs seldom travels beyond the individual if there is no structured process to capture and understand it.
4.As employees become more empowered, they create new solutions to local problems, but have no effective means to alert others to the breakthroughs or transfer them.
5.Internal and external benchmarking has awakened firms to the power of finding and adopting best practices.
6.Globalization. Employees are scattered around the world, which means the engine of knowledge is working around the clock, but geographical, biological, and language barriers prevent real-time access to each other.
7.Customers are demanding that the knowledge of the entire firm be brought to bear on their problems. They want the benefit of solutions developed for other customers, in other places.
8.Knowledge work and collaboration: Knowledge workers are used to working as "independent producers," yet collaborative work is necessary for complex projects. The tools for effective collaborative knowledge work are not well known or disseminated.
9.The need for increased speed of response and reduced cycle-time. Firms no longer have the time to reinvent all solutions.
These factors still hold water, only more so. What additional drivers are there today?
· Building strategy with knowledge as a component. Deliberately identify the data, information and knowledge that the organization needs to succeed and build the processes and systems to support it.
· IT investment has changed. As with any other adoption curve, people are talking about technology differently. Or the voices saying, "it's just a tool" are getting louder. KM projects need to encompass the business needs, not the technology.
· Technology base. The baseline technology available is much deeper. This gives us a larger platform on which to build out new KM approaches and the systems to suport them. The types of technology (software and hardware) keep changing, and these will always find there way into the organization and some level of utility.
· Collaboration is getting bigger. There seems to be more emphasis on projects that focus on getting people communicating and sharing their knowledge across the enterprise.
· Social life of knowledge. As Brown & Duguid suggest, ideas evolve as people talk about them and work with them together. Discussions of social network analysis and social software (six degrees) are the center of an interesting direction with knowledge management. Very close to collaboration.
· Innovation. Speeding innovation. Getting innovations to the market
INTERNATIONAL monetary fund
With its near-global membership of 185 countries, the IMF is uniquely placed to help member governments take advantage of the opportunities—and manage the challenges—posed by globalization. The IMF tracks global economic trends and performance, alerts its member countries when it sees problems on the horizon, provides a forum for policy dialogue, and passes on know-how to governments on how to tackle economic difficulties.
Marked by massive movements of capital and abrupt shifts in comparative advantage, globalization affects countries' policy choices in many areas, including labor, trade, and tax policies. Helping a country benefit from globalization while avoiding its downsides is an important task for the IMF.
The IMF has played a part in shaping the global economy since the end of World War II.
As the Second World War ends, the job of rebuilding national economies begins. The IMF is charged with overseeing the international monetary system to ensure exchange rate stability and encouraging members to eliminate exchange restrictions that hinder trade.
After the system of fixed exchange rates collapses in 1971, countries are free to choose their exchange arrangement. Oil shocks occur in 1973–74 and 1979, and the IMF steps in to help countries deal with the consequences.
The implications of the continued rise of capital flows for economic policy and the stability of the international financial system are still not entirely clear. The current credit crisis and the food and oil price shock are clear signs that new challenges for the IMF are waiting just around the corner.
What IMF do
The IMF supports its membership by providing:
- policy advice to governments and central banks based on analysis of economic trends and cross-country experiences;
- research, statistics, forecasts, and analysis based on tracking of global, regional, and individual economies and markets;
- loans to help countries overcome economic difficulties;
- concessional loans to fight poverty in developing countries; and
- technical assistance and training to help countries improve the management of their economies.
IMF and the global financial crisis
The IMF was founded more than 60 years ago toward the end of World War II (see History). The founders aimed to build a framework for economic cooperation that would avoid a repetition of the disastrous economic policies that had contributed to the Great Depression of the 1930s and the global conflict that followed.
Since then the world has changed dramatically, bringing extensive prosperity and lifting millions out of poverty, especially in Asia. In many ways the IMF's main purpose—to provide the global public good of financial stability—is the same today as it was when the organization was established. More specifically, the Fund continues to
- provide a forum for cooperation on international monetary problems
- facilitate the growth of international trade, thus promoting job creation, economic growth, and poverty reduction;
- promote exchange rate stability and an open system of international payments; and
- lend countries foreign exchange when needed, on a temporary basis and under adequate safeguards, to help them address balance of payments problems.
This is not to say that the IMF has remained static. In fact, the IMF's way of operating has been undergoing rapid change at least since the beginning of the 1990s as it has sought to adapt to the changing needs of its expanding membership in an globalized world economy. Most recently, the IMF's new Managing Director, Dominique Strauss-Kahn, has launched an ambitious reform agenda, aimed at making sure the IMF continues to deliver the economic analysis and multilateral consultation that is at the core of its mission—ensuring the stability of the global monetary system.
An adapting IMF
With cross-border financial flows increasing sharply in recent decades, the interdependence of countries has deepened (see slideshow on capital inflows). The turbulence in advanced economy credit markets in 2007-08 has demonstrated that domestic and international financial stability cannot be taken for granted, even in the world's most wealthy countries. The spike in food and fuel prices, which has hit import-dependent poor and middle-income countries particularly hard, is another aspect of the globalized economy we all are part of.
In response, the IMF has rethought its operations in several ways:
- Enhancing IMF lending facilities. The IMF is upgrading its lending facilities to enable it to better its serve members. It has created a new Short-Term Liquidity Facility designed to help emerging market countries with a track record of sound policies address fallout from the current financial crisis. It has also revamped its Exogenous Shocks Facility to facilitate the disbursement of aid to countries hit by the fuel and food crisis. The institution has launched a review of its financing role in member countries, to make sure it has the right instruments to meet countries' needs in a world characterized by growing—and increasingly complex—cross-border financial flows. (See Lending).
- Strengthening the monitoring of global, regional, and country economies. The IMF has taken several steps to improve economic surveillance, its framework for providing advice to member countries on macroeconomic policies (see Our Work). It is emphasizing research into the links between the financial sector and the real economy and the sharing of cross-country experiences. It has published new guidance on how to analyze and advise on exchange rates, and is paying more attention to the impact of the world's most important economies on other countries' economies. And it is improving its ability to warn member countries of risks and vulnerabilities in their economies.
- Helping resolve global economic imbalances. The IMF's analysis of global economic developments, contained in its World Economic Outlook, provide finance ministers and central banks governors with a common framework for discussing the global economy. The IMF now also has the ability to call for multilateral consultations to discuss specific problems facing the global economy with a select group of countries—an innovative way of facilitating collective action among key players in the global economy. The first such consultation took place in 2006. It sought to reduce global payments imbalances and involved China, the euro area, Japan, Saudi Arabia, and the United States (see Tackling Current Challenges).
- Analyzing capital market developments. The IMF is devoting more resources to the analysis of global financial markets and their linkages with macroeconomic policy. Twice a year, it publishes the Global Financial Stability Report, which provides up-to-date analysis of developments in global financial markets. IMF staff also work with member countries to help them identify potential risks to financial stability, including through the Financial Sector Assessment Program (described in more detail below). The IMF also offers training to country officials on how to manage their financial systems, monetary and exchange regimes, and capital markets. The IMF is currently facilitating the drafting of voluntary guidelines for Sovereign Wealth Funds and works closely with the Financial Stability Forum to promote international financial stability.
- Assessing financial sector vulnerabilities. Resilient, well-regulated financial systems are essential for macroeconomic stability in a world of ever-growing capital flows. The IMF and the World Bank jointly run the Financial Sector Assessment Program (FSAP), aimed at alerting countries to vulnerabilities and risks in their financial sectors. IMF and World Bank staff also advise on how to strengthen oversight and supervision of banks and other financial institutions.
- Working to cut poverty. At present, more than a billion people are living on less than $1 a day, and more than three-quarters of a billion people are malnourished. The IMF's role in low-income countries is changing as these countries grow and mature. But its central goal remains the same: to help promote economic stability and growth, laying the ground for deep and lasting poverty reduction. Its current main priority is to help low- and middle-income countries cope with the food and fuel price shock.
- Improving IMF governance. In May 2008, the IMF's membership approved a two-year package of reforms to improve representation of members at the Fund. The IMF is also becoming leaner and more efficient. It is trimming expenditure and reorganizing the way it earns revenue to pay for its operations (See Governance).
- Greater accountability and transparency. The IMF publishes almost all of its annual economic health checks of member countries, updates about its lending programs, and a wealth of other information on its website. The IMF's performance is assessed on a regular basis by an Independent Evaluation Office
How IMF do it
The IMF's main goal is to ensure the stability of the international monetary and financial system. It helps resolve crises, and works with its member countries to promote growth and alleviate poverty. It has three main tools at its disposal to carry out its mandate: economic surveillance, technical assistance and training, and lending. These functions are underpinned by the IMF's research and statistics.
The IMF promotes global growth and economic stability by encouraging countries to adopt sound economic policies. To do this, it regularly monitors global, regional, and national economic developments. It also seeks to assess the impact of the economic policies of individual countries on other economies.
This process of monitoring and discussing is known as economic surveillance. On a regular basis—usually once each year, the IMF conducts in depth appraisals of each member country's economic situation. It discusses with the country's authorities the policies that are most conducive to a growing and prosperous economy. In June 2007, the IMF adopted a new decision on bilateral surveillance that clarifies the exchange rate policies that countries should follow to avoid causing instability elsewhere in the world.
Member countries have the option of publishing the IMF's assessment of their economies, with the vast majority of countries opting for transparency and openness. For more information on how the IMF monitors national economies, go to Economic Surveillance in the Our Work section.
The IMF also brings together, on an as-needed basis, groups of systemically relevant economies to address issues of broad importance to the global economy. These meetings are called multilateral consultations. For example, in the early part of 2007, the United States, China, the euro area, Japan, and Saudi Arabia all participated in the IMF's first multilateral consultation, aimed at reducing global imbalances.
The IMF's work on individual countries informs its work on regional economies and the global economy. These views, along with timely analysis of important economic and financial issues, are published twice a year in the World Economic Outlook, various Regional Economic Outlook reports, and the Global Financial Stability Report.
The IMF works with the World Bank to encourage the growth of resilient, well-regulated financial systems around the world through the joint Financial Sector Assessment Program (FSAP). Supported by experts from a range of national agencies and standard-setting bodies, FSAP work identifies the strengths and vulnerabilities of a country's financial system, determines how key sources of risks are being managed, ascertains the sector's developmental needs, and helps prioritize policy responses.
IMF offers technical assistance and training to help member countries strengthen their capacity to design and implement effective policies. Technical assistance is offered in several areas, including fiscal policy, monetary and exchange rate policies, banking and financial system supervision and regulation, and statistics.
The IMF provides technical assistance and training mainly in four areas:
- Monetary and financial policies (monetary policy instruments, banking system supervision and restructuring, foreign management and operations, clearing settlement systems for payments, and structural development of central banks)
- Fiscal policy and management (tax and customs policies and administration, budget formulation, expenditure management, design of social safety nets, and management of domestic and foreign debt)
- Compilation, management, dissemination, and improvement of statistical data
- Economic and financial legislation.
In the event that member countries experience difficulties financing their balance of payments, the IMF is also a fund that can be tapped to facilitate recovery. A policy program supported by financing is designed by the national authorities in close cooperation with the IMF. Continued financial support is conditional on the effective implementation of this program.
The IMF also provides low-income countries with loans at a concessional interest rate through the Poverty Reduction and Growth Facility (PRGF) and the Exogenous Shocks Facility (ESF). For more on different types of IMF lending, go to Lending in the Our Work section.
Supporting all three of these activities is the IMF's economic and financial research and statistics. In recent years, the IMF has applied both its surveillance and technical assistance work to the development of standards and codes of good practice in its areas of responsibility, and to the strengthening of financial sectors. These are part of the IMF's continuing efforts to strengthen the international financial system and improve its ability to prevent and resolve crises
The IMF currently has a near-global membership of 185 countries. To become a member, a country must apply and then be accepted by a majority of the existing members. The former Yugoslav republic of Montenegro joined the IMF in January 2007, becoming the institution's 185th member.
Upon joining, each member of the IMF is assigned a quota, based broadly on its relative size in the world economy. The IMF's membership agreed in May 2008 on a rebalancing of its quota system to reflect the changing global economic realities, especially the increased weight of major emerging markets in the global economy. For more on the quota and voice reform, please go to the section on Country Representation in the Governance section).
A member's quota delineates basic aspects of its financial and organizational relationship with the IMF, including:
Subscriptions. A member's quota subscription determines the maximum amount of financial resources the member is obliged to provide to the IMF. A member must pay its subscription in full upon joining the IMF: up to 25 percent must be paid in the IMF's own currency, called Special Drawing Rights (SDRs) or widely accepted currencies (such as the dollar, the euro, the yen, or pound sterling), while the rest is paid in the member's own currency.
Voting power. The quota largely determines a member's voting power in IMF decisions. Each IMF member has 250 basic votes plus one additional vote for each SDR 100,000 of quota. Accordingly, the United States has 371,743 votes (16.83 percent of the total), and Palau has 281 votes (0.01 percent of the total). The newly agreed quota and voice reform will result in a significant shift in the representation of dynamic economies, many of which are emerging market countries, through a quota increase for 54 member countries. A tripling of the number of basic votes is also envisaged as a means to give poorer countries a greater say in running the institution.
Access to financing. The amount of financing a member can obtain from the IMF (its access limit) is based on its quota. Under Stand-By and Extended Arrangements, which are types of loans, a member can borrow up to 100 percent of its quota annually and 300 percent cumulatively. However, access may be higher in exceptional circumstances.
SDR allocations. Allocations of SDRs, the IMF's unit of account, is used as an international reserve asset. A member's share of general SDR allocations is established in proportion to its quota.
COLLABARATING WITH OTHERS
The IMF collaborates with the World Bank, the regional development banks, the World Trade Organization (WTO), UN agencies, and other international bodies. While all of these organizations are involved in global economic issues, each has its own unique areas of responsibility and specialization. The IMF also interacts with think tanks, civil society, and the media on a daily basis.
The IMF and the World Bank are different, but complement each other's work. Whereas the IMF's focus is chiefly on macroeconomic and financial sector issues, the World Bank is concerned mainly with longer-term development and poverty reduction. Its loans finance infrastructure projects, the reform of particular sectors of the economy, and broader structural reforms. Countries must join the IMF to be eligible for World Bank membership.
Given the World Bank's focus on antipoverty issues, the IMF collaborates closely with the Bank in the area of poverty reduction and helping countries draw up poverty reduction strategies. Other areas of collaboration include assessments of member countries' financial sectors, development of standards and codes, and improvement of the quality, availability, and coverage of data on external debt.
An external review committee on World Bank and IMF collaboration was formed in March 2006 to assess the working relationship between the two sister agencies, known collectively as the Bretton Woods institutions. In its February 2007 report, the six-member Malan committee offered recommendations for closer collaboration between the two institutions. Such collaboration, it said, is critical for effectively delivering services to the institutions' member countries—especially given an ever-shifting global economic landscape and emerging pressures from global warming, energy security, and population aging.
The IMF is a member of the Switzerland-based Financial Stability Forum, which brings together government officials responsible for financial stability in the major international financial centers, international regulatory and supervisory bodies, committees of central bank experts, and international financial institutions. It also works with standard-setting bodies such as the Basel Committee on Banking Supervision and the International Association of Insurance Supervisors.
The IMF collaborates with the World Trade Organization (WTO) both formally and informally. The IMF has observer status at WTO meetings and IMF staff contribute to the work of the WTO Working Group on Trade, Debt, and Finance. And the IMF is involved in the WTO-led Integrated Framework for Trade-Related Technical Assistance to Least Developed Countries, whose other members are the International Trade Commission, UNCTAD, UNDP, and the World Bank.
The IMF has a Special Representative to the United Nations, located at the UN Headquarters in New York.
The IMF also engages on a regular basis with the academic community, civil society organizations (CSOs), and the media.
IMF staff at all levels frequently meet with members of the academic community to exchange ideas and receive new input. The IMF also has an active outreach program involving CSOs.
IMF management and senior staff communicate with the media on a daily basis. Additionally, a biweekly press briefing is held at the IMF headquarters, during which a spokesperson takes live questions from journalists.
Organization & Finances
The IMF has a management team and 17 departments that carry out its country, policy, analytical, and technical work. One department is charged with managing the IMF's resources. This section also explains where the IMF gets its resources and how they are used.
The IMF's employees come from all over the world; they are responsible to the IMF and not to the authorities of the countries of which they are citizens. The IMF staff is organized mainly into area; functional; and information, liaison, and support responsibilities.
The IMF's resources come mainly from the money that countries pay as their capital subscription when they become
In May 2008, the IMF's Board of Governors endorsed a new income model for the IMF, aimed at ending the organization's over-reliance on lending income.
Criticisms from economists have been that financial aid is always bound to so-called "Conditionalities", including Structural Adjustment Programs. Conditionalities, which are the economic performance targets established as a precondition for IMF loans, it is claimed, retard social stability and hence inhibit the stated goals of the IMF, while Structural Adjustment Programs lead to an increase in poverty in recipient countries.
One of the main SAP conditions placed on troubled countries is that the governments sell up as much of their national assests as they can. Normally to western corporations and normally at heavily discounted prices.
The IMF sometimes advocates "austerity programmes," increasing taxes even when the economy is weak, in order to generate government revenue and balance budget deficits, which is the opposite of Keynesian policy. Although countries are often advised to lower their corporate tax rate. These policies were criticised by Joseph E. Stiglitz, former chief economist and Senior Vice President at the World Bank, in his book Globalization and Its Discontents. He argued that by converting to a more Monetarist approach, the fund no longer had a valid purpose, as it was designed to provide funds for countries to carry out Keynesian reflations, and that the IMF "was not participating in a conspiracy, but it was reflecting the interests and ideology of the Western financial community."