Journal of Entrepreneurship and Financial Technology

Vol 2, Number 1 2023

EISSN: 2988-4012/Pp:1-14

MAPPING KNOWLEDGE RISKS AND IMPLEMENTING KNOWLEDGE RISK MANAGEMENT

THE CASE STUDY OF INDONESIA’S FINANCIAL AND DEVELOPMENT SUPERVISORY BOARD

Isabella Ishak1, Djabir Hamzah2, Nurdjanah Hamid3

1 Magister Management, Faculty of Economics and Business, Hasanuddin University;
isabella.ishak@yahoo.com
2 Faculty of Economics and Business, Hasanuddin University; e-mail@e-mail.com
3 Faculty of Economics and Business, Hasanuddin University; e-mail@e-mail.com

Abstract
This study aims to describe the framework for implementing knowledge risk management by identifying
knowledge risks based on their categories, RM-based KM practice designs and the techniques needed to be
able to integrate them. This research uses a case study method with a qualitative approach in one of the
government agencies in Indonesia, namely the Financial and Development Supervisory Board (BPKP).
After applying KRM implementation techniques in the organization, it is known from the data analysis
results that knowledge risk at the organizational level consists of three main categories, further subdivided
into several knowledge risks. These three categories are included in the RM-based KM design (also known
as knowledge risk management). This research still has limitations because it uses data sources from the
2008 organizational reports. However, this research is expected to be a reference and basis for designing
a more effective KRM framework and implementation, adapted to the knowledge risks of public
organizations.
Keywords : knowledge risks; knowledge management; risk management; knowledge risk management

A. INTRODUCTION

Until recently, Knowledge was a commodity that associations had to manage and use with
style (Durst, 2012; Massingham, 2010; Stam, 2009). Similarly, knowledge continues to develop
and accumulate within organizations and is used in organizational life. The concept of knowledge
management (hereafter referred to as KM) is actually an old concept, as old as the age of mankind
in this world. Organizations concentrate on locating and developing the appropriate knowledge
to be profitable and accomplish their objectives because the development of KM has expanded
beyond propositions to include practices, processes, conditions, tools, and other implicit
behaviors (Durst & Zieba, 2019).
KM is considered as a key element in the renewal of corporate risk management (Neef,
2005). In this case, the KM approach is to generate and select the necessary information
according to the decisions to be made (Lorenz et.al., 2005). Organizations must restructure their
approach to KM in light of the rapid rise of KM hazards (also known as knowledge risk, or KR), in
order to take into account potential implicit KR. In comparison to knowledge loss, knowledge
leakage, knowledge waste, or knowledge concealment, there hasn't been much debate about
knowledge redistribution (KR) in the past (Durst and Zieba, 2019).
In the business sector, KM has been continuously implemented and developed. Rapidly
developing and modern companies have effectively applied knowledge risk management (KRM)
ways to prevent operational losses and ethical violations. As an illustration, Intel, Novo Nordisk,
and Nike have worked hard to develop innovative RM strategies based on knowledge
management (Neef, 2005). On the other hand, research on KRM in government agencies is still
limited. This paper is a follow-up research referring to the KR taxonomy developed by Durst &

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Zieba (2019). The Financial and Development Supervisory Board (BPKP), one of the government
organizations in Indonesia, will be used as a case study to examine the applicability of knowledge
risk categories at the organizational level. The KRM framework developed by Lorenz et al. (2005)
follows the discussion of knowledge risks in organizations, which are divided into human,
technological, and operational risks and the KRM implementation techniques created by Neef
(2005).

B. LITERATURE REVIEW

Knowledge
Knowledge, which is a dynamic, mortal process (Nonaka & Takeuchi, 1995), provides a
specific belief in a reality. The concept of knowledge is not just what is learned from books or
mentors; it also includes accumulated experience that a person gains from their surroundings
(Davenport & Prusak, 1998). Davenport & Prusak (1998) describe knowledge as a set of
combinations of experiences, values, information, and insights that includes an evaluative
framework and current information.
According to Nold (2011), data is a collection of meaningless facts, words, sounds,
numbers, observations, or images that exist but aren't processed or organized into information
that people and organizations can use. Data is transformed into information, which is then
transformed into knowledge. The knowledge that results from the ingestion and analysis of
information by individuals is defined as "justified beliefs based on personalized information
(which may be new or old, unique, useful, or accurate) about facts, observations, interpretations,
procedures, ideas, concepts, and judgments" (Nold, 2011). Michael Polanyi (1966) created a well-
known model of knowledge that separates information into tacit and explicit sources. Explicit
knowledge is recorded, placed into databases, or other easily shareable systems inside
businesses (Lee & Choi, 2003). A mix of cognitive and technological processing factors obtained
from experience is how tacit knowledge is understood. The technical processing dimension
includes knowledge, skills, and expertise acquired from one's experiences over time, the
cognitive processing dimension, on the other hand, consists of the mental models, perspectives,
and beliefs that are developed over time and selected through individual perceptions (Nold,
2011).

Knowledge Risks (KR)

There are insufficient definitions and descriptions of the issues associated with
knowledge risk in the literature (Durst & Zieba, 2019). information risk is the potential for losses
that might lower or obstruct an organization's operational or strategic goals as a result of the
identification, preservation, or storage of information, according to Perrot (2007). However, it is
first required to understand risk in order to proceed with the discussion of KR. The word risk
derives from the old Italian verb risicare, which means "to dare," where danger is not a matter of
fate but rather a decision (Bernstein, 1996). It is beneficial that risk is discussed in business
literature, because taking risks is a constructive action that fosters innovation (Schumpeter,
1934). Massingham (2010) explains that risk indicates the possibility of something going wrong.
Another view defines risk as the likelihood and severity of adverse impacts/consequences
(Haimes, 2009). It's crucial to take into account what went wrong, the possibility of it happening
again, and the effects while doing a risk analysis (Kaplan & Garrick, 1981).
An individual's response to risk is a function of the individual's perception of the risk as
either completely random or manageable (Massingham, 2010). This view suggests that while
risks cannot be eliminated, they can at least be anticipated and then activities can be
implemented to reduce their impact. Knowledge risk provides a measure for the likelihood along
with severity of adverse consequences resulting from any activity involving or linked to

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information that may eventually impede organizational functioning at various levels (Durst and
Zieba, 2019). Additionally, knowledge risk is separated into three categories by Durst and Zieba
(2019): operational risk, technological risk, and human risk. Human knowledge risk, such as the
risk of concealing knowledge, are connected to the management of human resources and include
personal, social, cultural, and psychological aspects of an individual. The use of technology, such
as information and communication technology (ICT), introduces technological knowledge
dangers. Examples include organizations that still use outdated technology and hacking. Finally,
operational knowledge risk includes risks from routine operations and organizational functions,
such as alliances, mergers, outsourcing, and using incorrect or outdated knowledge.

Knowledge Management (KM)

According to Baskerville and Dulipovici (2006), knowledge management (KM) is a
collection of actions for producing, acquiring, sharing, and utilizing information that is based on
trust, or for integrating organizational and technology solutions and reusing knowledge to
enhance individual and organizational learning (Jennex, 2007 in Massingham et al., 2018).
According to Jain and Jeppesen (2013), KM refers to a variety of strategies and tactics used to
advance corporate objectives.

Knowledge Risk Management (KRM)

The discussion of KRM is still relatively new in academic research, where this concept
combines two previously separate concepts, namely RM and KM (Massingham, 2010).
Massingham (2010) further explains that KRM research has focused on two concepts. De Zoysa
and Russell's (2003) study on how knowledge can help identify, measure, and respond to risk as
well as Verhaegen's (2005) and Otterson's (2005) studies on how knowledge influences
decision-making are just a few examples of research that demonstrates the function of knowledge
as risk mitigation and leads to more effective RM implementation. Second, scientists have looked
at how KM procedures might enhance RM. For instance, research by Marshall et al. (1996)
highlighted a variety of KM "generators" as strategies to mitigate the negative consequences of
RM, including leveraging knowledge for decision making, enhancing access to knowledge, and
developing knowledge-based controls and systems. Numerous research have examined the
similarities between risk management and knowledge management, including the need for
perception among employees, their sense of values, and their behaviors as a result of lessons
learned, and have come to the conclusion that these similarities exist (Neef, 2005). Knowledge
mapping, communities of practice, and expert tagging are just a few examples of typical KM
approaches that have been recommended by other research (Massingham, 2010).

C. RESEARCH METHOD

Location and Research Design

This research uses a single case study method, which was chosen because it is an
appropriate method for conducting management research, especially in the public sector (Riege
& Lindsay, 2006; Zainal, 2007). Because the organizational processes discussed in this research
about the relationship between risk and knowledge cannot be readily quantified, a qualitative
approach was selected (Van Maanen, 1979). The organization used as a case study is one of the
government agencies in Indonesia, namely the Finance and Development Supervisory Board. Its
primary responsibility is to manage government activities in the areas of national/regional
financial supervision and national development. This organization is an internal government
supervisory apparatus that reports to and is accountable to the President. This organization was
selected for two reasons. First, the Development Finance and Supervision Agency is a

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government agency that performs and reports its duties directly to the President, and the
majority of its employees are auditors, so knowledge becomes the most important resource to
adequately perform its duties, mission, and function. Secondly, the author is an auditor who has
been part of the organization for about 10 years, so the author has access to data and information
related to this research.
Analysis Method
The case description was developed using a conceptual framework selected based on a
literature review, business process observation, and document analysis to understand the KM
context and application. The analysis section has three objectives: first, to outline the knowledge
risks that may occur in the organization using the knowledge risk framework developed by Durst
and Zieba (2019) (see Table 1); second, to describe the KRM framework created by Lorenz et al.
(2005), which has been modified (see Figure 1 and Table 2); and third, to explain the KRM
integration methods and systems created by Neef (2005) (see Table 3).
Table-1: Knowledge Risk at Organisational Level
No Knowledge Risks Categories Examples of Knowledge Risk Categories
1 The Risks of Human Knowledge a. Knowledge hiding
b. Knowledge hoarding
c. Unlearning
d. Forgetting
e. Organizational members' lack of or insufficient
competencies
2 Technology Risk a. Risks related to cybercrime
b. Risk related to old technologies
c. Digitalization risks
d. Risk related to social media
3 Operatios Risks a. Knowledge waste
b. Risks related to knowledge gaps
c. Relational risks
d. Knowledge outsourcing risks
e. Risk of using obsolete/unreliable knowledge
f. Risk of improper knowledge application
g. Espionage
h. Continuity risks
i. Communication risks
j. Knowledge acquisition risks
k. Knowledge transfer risks
l. Merger & acquisition (M&A) risks

D. RESULTS

Human knowledge risks

Knowledge hiding and knowledge hoarding
According to Nere, Hernaus, Dysvik, and Kerlavaj (2017), knowledge hiding is the willful
conduct of an employee who, for whatever reason, does not want to divulge his or her
information and purposefully hides it. The process of gathering knowledge that may (or may not)
be shared in the future is known as knowledge hoarding, on the other hand (Connelly et al., 2012).
Organizations have built knowledge management systems (KMS) that can accommodate
employees who want to share knowledge, but the risk of knowledge hiding and knowledge
hoarding remains a potential problem that may occur. Lack of financial rewards, egotism, and
anger with the organization are a few factors that might be to blame for this occurrence (Leonard,
2014). In addition, the risk may occur because there is no embedded knowledge sharing culture
in the organization. Employees do not feel compelled to share knowledge because the
organization has not implemented a reward and punishment system so that employees who do
or do not share knowledge are still treated equally in the organization.

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 Unlearning
According to De Holan (2011), unlearning is a sort of purposeful (confused) forgetting
that involves leaving behind beliefs, principles, and/or behaviors that are viewed as outmoded
within an organization. Although purposeful forgetting is seen as a good thing, it may sometimes
result in unintended knowledge loss, which can be harmful (Durst & Zieba, 2019). In government
agencies, such as the Financial and Development Supervisory Agency, this risk is less likely to
occur because the organization is in the process of becoming a learning organization. According
to Jabeen and Dari (2023), organizational learning is a process that enables an organization to
change through time via innovation and learning from failures.
Forgetting
According to De Holan (2011), forgetting can be inadvertent (caused by a poor memory)
or purposeful (done to break undesirable habits). Durst & Zieba (2019) explained that the
possibility of forgetting knowledge occurs because this knowledge is rarely used, even though it
is relevant to the job, so there is a need for a knowledge repository to ensure that explicit
knowledge has been properly captured. In contrast, organizations may purposefully overlook
specific information that impedes or delays the process of making decisions. Because the
business is in the process of becoming a learning organization, there is little chance that
information that is important to accomplishing the organization's goals will be forgotten.

Organizational members' lack of or insufficient competencies

According to Durst & Zieba (2019), this risk is related to organizational members who
have little training, experience, competence, or competency, which might interfere with their
ability to do their duties. Missing/minimal competencies can be the result of inadequate (lost)
succession planning within the organization, which can lead to the loss of knowledge (Durst &
Wilhelm, 2012). Additionally, organizational members' inexperience and carelessness can lead
to knowledge-related hazards including the negligent disclosure of confidential firm data and
knowledge (Durst & Zieba, 2019). This risk has a low probability of occurrence because the
organization has currently implemented talent management, where all training, experience, and
skills of all members of the organization have been documented in a system to support succession
success in the organization.

Technological risks
Risks related to cybercrime
For organization, reports on the results of state / regional financial supervision and
reports on the results of state / regional financial investigations are sensitive and confidential
information. The risk of cybercrime will have a serious impact, especially with the risk of hacking.
Hacking is an attempt by outsiders to break into an organization's computer system (especially
to obtain confidential information). This attack can change data and content and damage its
authenticity, which can result in the disruption or even termination of organizational processes
(Durst & Zieba, 2019).

Risk related to old technologies

Durst & Zieba (2019) explain that this risk is a difficulty for public and private
organizations to keep up with the enormous development of ICT. The current state of the
organization has built a system that can be accessed through intranet and Internet networks, but
the systems built are not fully connected to each other. So it adds time to the completion of work
and the decision-making process.

Digitalization risks
The company may suffer from any overreliance on technology that disregards the human
element (Durst & Zieba, 2019). This risk cannot be separated from the organization, which has

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 built several applications related to the financial accountability of local governments in the
course of performing its duties and functions. Currently, organizations that are moving towards
digital business processes must be able to face the risks of digitization.

Risk related to social media

Social media-related dangers are associated with user-generated data and material that
is disseminated and supported by automated tools and bots that distribute disinformation and
alternative information (Durst & Zieba, 2019). Organizations such as open and accountable
government agencies also use social media to disseminate information about government
oversight programs and other important information, and they may receive fake comments or
content related to their duties and functions.

Operational risks
Knowledge waste
Knowledge waste is the act of intentionally not using potential and available knowledge
within the organization (Durst & Aisenberg Ferenhof, 2016). By not using existing knowledge,
the organization has wasted valuable resources (such as money and human labor).The higher the
potential for waste of knowledge, the more it means that it is not being used within the
organization (Durst & Zieba, 2019). This risk can occur in organizations seeing that the
knowledge documented in the KMS is not used in the daily work.

Risks related to knowledge gaps

The knowledge gap is the gap between a term that the organization should know and
whether it is really understood, and it has the ability to hinder the achievement of the objectives
of the organization (Perrot, 2007). According to Durst & Zieba (2019), organizations
implementing modern ICT advances run the risk of having insufficient expertise to assess the
potential and usefulness of available ICT tools. Furthermore, when individuals leave an
organization, previously accessible skills may no longer be available, resulting in knowledge gaps.

Relational risks, Knowledge outsourcing risks, Espionage, and Merger & acquisition (M&A) risks
The author does not discuss this risk because the relationship between this risk and the
operational activities of the organization as a government agency cannot be determined.

Risk of using obsolete/unreliable knowledge, risk of improper knowledge application, and

knowledge acquisition risks
When using obsolete or erroneous information, there is a risk since certain knowledge
might quickly become outdated (Tan et al., 2006). Because of this, information must constantly
be updated and renewed. Otherwise, an organization faces the danger of applying outdated or
invalid knowledge in its operations (Durst & Zieba, 2019). This risk can occur in organizations
especially if the knowledge in the KMS is not always updated, so knowledge and information must
always be validated and reviewed before decisions are made.
When an organization misinterprets particular knowledge (which can happen due to a
lack of capacity and abilities to critically assess this knowledge), it increases the risk of making
wrong decisions (Zieba & Durst, 2018). The challenge for organizations is to be able to use
knowledge appropriately when the amount of knowledge available is very large and therefore
skills and abilities are needed to apply all of this knowledge (Durst & Zieba, 2019). This risk can
occur when organizational resources do not make efforts to improve skills and competencies,
which can lead to misinterpretation of knowledge or incorrect analysis, resulting in
inappropriate decision making.
The danger of utilizing knowledge that is out-of-date or unreliable and the risk of
employing the wrong knowledge are all strongly connected. According to Durst & Zieba (2019),
knowledge acquisition risk is connected to the organization's capacity to acquire new knowledge
required to follow new strategic orientations. New knowledge is needed for innovation or

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continuous development of skills and competencies to ensure that the organization can meet
current and future challenges. Organizations must be able to ensure that outdated/unreliable
knowledge is not used in decision making, continuously update knowledge, and improve
competencies and skills so that new knowledge and knowledge that is still relevant can be used
to achieve organizational goals.

Continuity risks
The capacity of the company to retain its performance and competitiveness over time
when human resources arrive and depart is referred to as continuity risk (Lambe, 2013, in Durst
& Zieba 2019). This calls for a strategy involving personnel replacement and succession planning
(Durst & Wilhelm, 2012). Organizations that are currently dealing with a steady stream of
employees quitting have developed a procedure by putting in place a mentoring process so that
knowledge that was previously present is preserved when employees depart through resignation
(due to personal matters, receiving offers elsewhere, or other circumstances), retirement, and
dismissal.

Communication risks
Communication plays an important role in KM to enable knowledge practice (Durst &
Zieba, 2019), so this risk has a high probability/potential to occur and organizations need to
implement effective communication in every activity meeting/agenda.

Knowledge transfer risks

Knowledge transfer within an organization is a process in which the experience of one
unit/group/department/division) influences other units (Argote & Ingram, 2000) and there is a
reward for exchanging knowledge with other assets (or other knowledge) (Durst & Zieba, 2019).
According to Tangaraja, Rasdi, Samah, and Ismail (2016), barriers to effective knowledge transfer
are influenced by organizational and personal factors including organizational culture,
management commitment to resource and time availability, incentives offered, and the category
of knowledge itself. Personal factors include motivation, trust, competence, knowledge
absorptive capacity, and language similarity.

KRM Framework
The RM process is a systematic application of management policies, processes, and
actions through the steps of creating the context, identifying, analyzing, assessing, managing,
monitoring, and communicating risks. It is based on the Australian/New Zealand Standard
AS/NZS 4360 (2004). The first four elements are risk assessment steps, while the fifth element
is risk control in handling the risks that will occur. Meanwhile, the process of communication and
consultation (learning) as well as monitoring and review is carried out throughout the risk
assessment and risk control process to ensure that changes in the situation do not change the
priority of risks according to the management plan. The Lorenz et al. (2003) framework for
knowledge management in risk management demonstrates how knowledge management (KM)
supports risk-based decision-making by giving information. The first step in analyzing what
should be done in implementing KM-based RM is to establish KM as the cornerstone of RM
implementation (see Figure 1).

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 Figure 1 Modification of the KRM model by Lorenz et al. (2003)
The work unit of the Supervisory Research and Development Center as part of the organization has
conducted research related to the implementation of KM-based RM as shown in Table 2.

Table-2 : Knowledge Management Based RM Process

No RM Phases Source KM Process
1 Establish The Context
-Strategic - Organization leaders Knowledge related to this stage is obtained from
- Knowledge repository interviews with organizational leaders (the
transformation of implicit information into explicit
knowledge) or from the knowledge repository, if the
information has been systematically stored in a
medium that can be accessed by organizational
members (KM stages from the create to disseminate
stage).
-Organization - Leaders, employees, If the information has been systematically stored in a
community of practice medium that is accessible to members of the
- Knowledge repository organization, then knowledge related to
organizational policies, systems, and procedures is
taken from the knowledge repository.
Knowledge related to expectations is obtained from
interviews with leaders, employees, and the
community of practitioners (implicit knowledge
transformation into explicit knowledge), starting with
Create, Capture, and Refine.
2 Identify Risks Every employee Risk identification must be obtained from the risk
The process includes owners. At this stage, a questionnaire or focus group
- Events that affect the risk discussion is conducted with employees at all levels,
assessment structure, areas and departments (exploring the experience/tacit
- Potential impact, knowledge of employees in performing daily tasks
- How it happens and why it along with the identification of risks and impacts that
happens may occur).
If this stage is carried out without the knowledge of
the risk owner, misidentification may occur.
The MR task force/team also communicates MR
information with workers at this level to facilitate

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 No RM Phases Source KM Process
knowledge transfer and employee acceptance in
recognizing hazards in each employee's activity.
3 Analyse Risks - MR Team The MR team processes and analyzes the data mining
It is the frequency of risk - Knowledge repository findings from risk identification. The refining and
occurrence and how much storing of information takes place as a process.
negative impact (magnitude) it
has on the achievement of
organizational goals that
determines the risk rating.
4 Evaluate Risks - MR Team The results of the analysis are then mapped. In this
The results of the analysis create - Knowledge repository process, there is communication/validation of the risk
a risk register that describes risks - Employees map and a knowledge sharing process between the
that exist in the organization MR team and the employees as risk owners.
5 Treat Risks - MR Team Risk handling is consulted and socialized with risk
Treatment options list created - Knowledge repository owners (employees) and the community of practice,
- Employees and a handling list is created. The process that occurs
is store, manage, and disseminate.
Source: Research report risk management based on knowledge management and implementation
efforts at BPKP (2008)

KRM integration techniques and systems

The process of integrating KM in the context of KM-based RM carried out by organizations
with several techniques and systems, as developed by Neef (2005), is outlined in Table 3.
Table-3 : RM-based KM Integration Stages by Neef (2005)
No Stages Description
1 Knowledge mapping The technique through which businesses map the knowledge of their human resources is
known as knowledge mapping. It can take the form of a skills map, which is a list of each
employee's expertise and work experience, created as a database that can be accessed
through the KM portal. Knowledge mapping in the KM phase is capture. The firm will
be aware of the experience and competence of its personnel as well as any gaps thanks
to knowledge mapping.
The mapping data is then developed in the form of an accountability matrix, in which
decision-makers are mapped and electronically linked through databases and related
software applications. Responsibility for a project or a crisis resolution idea can be
promptly evaluated when a crucial decision must be made.
2 Communities of Practice Employees who share or complement one other's interests, experiences, and areas of
competence naturally develop networks called "communities of practice" to explore new
problems. In KM-based RM, these communities are encouraged to discuss potential ideas
(create), capture knowledge (capture), and provide feedback (refine). The presence of
this community of practice will encourage an organizational culture of knowledge
sharing, allowing for the open exchange of ideas between work units.
Incidents involving lower-level management can be prevented if they are detected early
and formally addressed at the top management level. Early detection of the sensitivity
and responsiveness of lower-level management to potential incident signals. As a result,
a formal method for exchanging ideas and communicating must be established by the
company.
3 Hard-taging experts Hard-tagging is a knowledge management procedure that combines formal mentorship
with knowledge mapping. Employee experience is recognized and classified, much like
the knowledge and skill mapping process, to create a database that is accessible when
necessary to foresee certain events. In addition to experience, new knowledge is
contextualized. In this case, someone must be able to understand it (tacit knowledge) and
express it as explicit knowledge. The knowledge is then stored (store and manage) in a
reliable format so that it becomes a collection of knowledge (knowledge repository) that
can be accessed by others in the organization.
This knowledge can be used by organizational leaders when a potential incident or crisis
occurs during decision making in the RM phase. The technical team (charged with
managing incidents) should be consulted before making any decisions on the upcoming
RM phase. This team should be made up of subject matter experts and a network of
knowledge practitioners or practitioners who can provide the necessary analysis and
assistance for implementation (action). With input from the right people, experienced

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 No Stages Description
experts and able to provide solutions, the decision making process becomes informative
and appropriate.
4 Learning A very important proposition in KM is that employees need to share (disseminate)
experiences with each other. So the process of knowledge sharing and continuous and
dynamic learning is well positioned. After the review process (post-mortem incidents),
it is then learned what was done right and what went wrong. Making errors and learning
from them is one of the advantages of learning. Hard labeling, community of practice
gatherings, and the availability of best practices not only enhance HR data but also
strengthen corporate memory to prevent recurrence of incidents.
5 Encouraging knowledge An important aspect of a successful KM-based RM framework is values in the form of
sharing ethical behavior that are effectively communicated throughout the organization. Integrity
is required as part of the organizational culture in the short term, where values and
knowledge sharing behaviors are continuously communicated when a risk is identified.
6 Performance monitoring When non-financial performance data (such as organizational capital and intellectual
and reporting capital) is utilized to forecast future organizational success based on the measurement
and monitoring of organizational performance, knowledge-based resource management
(RM) is considered to be effective. International standards and reporting guidelines
should be used in the management process to statistically measure and publish HR
performance and organizational integrity.
7 Community and The key to the success of KM is communication and knowledge sharing, which applies
stakeholder involvement not only to all employees of the organization, but also to stakeholders involved in the
organization's policies. An information system, such as e-mail and electronic bulletins,
is needed to provide information to stakeholders and organizational leaders so that they
can sense and respond to suggestions from parties outside the organization.
8 Business research The present KM revolution has given organizations unprecedented access to the findings
analysis of research and analysis, which is its ultimate advantage. Organizations must acquire
information capacity, knowledge research and analytical skills, and the ability to find,
organize, and disseminate information from internal and external sources linked to
policy, culture, and legislation as part of a KM-based RM process. This calls for the
capacity to carry out in-depth formal research on legal/regulatory policies, corporate
violations and non-compliance, political, social, and local regulations, corporate
performance, social performance, and supplier reputation, as well as the ability to record
best practices and lessons learned both internally and among rivals.
Source: Research report risk management based on knowledge management and
implementation efforts at BPKP (2008)

E. DISCUSSION

As described in Table 1, public sector organizations (government agencies in Indonesia,

especially the Indonesian Development and Finance Agency) have the potential to be exposed to
different types of knowledge risks. These risks include the risks associated with human
knowledge, operational knowledge, and technical knowledge. These risks are further subdivided
into several risk kinds, and the majority of the knowledge risks fall under the operational risk
category since they are associated with the daily operations of the company. The risks identified
have a high probability of occurrence, so organizations must closely analyze and monitor these
risks. It is important to understand the details of these knowledge risks so that organizations can
prepare strategies to reduce negative impacts that have the potential to interfere with the
achievement of organizational goals.
The next step after identifying organizational risks is to analyze KM-based RM, or also
known as KRM, using the conceptual framework shown in Figure 1 and explained in more detail
in Table 2. In order to start implementing KM-based RM, it is necessary to first build commitment
among organizational members, especially organizational leaders. Then proceed with building a
KM system and developing risk awareness in the organization. Extracting tacit knowledge into
explicit knowledge can be used in every decision consideration at every stage of RM in the
organization. In addition, the culture of knowledge sharing is a key that cannot be abandoned.
Thus, identifying, analyzing, evaluating, and managing risks based on the knowledge of the risk
owner, the RM task force or risk manager, and the community of practitioners in the field of RM

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will result in decisions with the least risk. Organizations can be said to be successful when they
effectively implement RM by integrating KM as the main foundation and using it as a management
tool. The reason is simple: an organization cannot effectively manage its risks if it does not
manage its knowledge.
The steps of integrating KM-based RM in the organization by following the steps designed
in Table 3. The three main components of KM are people, place, and content. KM requires
competent people, a place for discussion, and the content of the discussion itself. In the context
of supporting RM, the competent people are the risk owners, the risk manager / MR task force,
and the community of RM practitioners. While the place of discussion, among others, in the form
of MR discussion forums for a place/means of sharing knowledge that will be used in RM. While
the content includes tacit and explicit knowledge of each individual organization, which will be
the strength of the organization in managing RM.
The implication of this research for academics is to provide an example of the practice of
identifying organizational knowledge risks and the KRM framework. On the other hand, public
organizations can use the results of this research as a reference and basis for designing a more
effective KRM framework and implementation with adaptations to the knowledge risks of each
organization. This research is a development of the previous research conducted by Durst & Zieba
(2019).In the previous research, the risk taxonomy was only discussed theoretically and not
applied in a practical context. This research still has limitations where the research report used
is the organizational unit report in 2008. At that time, the implementation of KRM in the
organization was still in the form of a design and was still in the early stages of implementing
KRM. Of course, currently the implementation of KRM has progressed with the existence of a
comprehensive KMS and KM architecture by applying risk awareness in every operational
implementation of the organization. For future research, research can be developed on the
taxonomy of knowledge risks in different organizations (both private and public organizations)
by developing a conceptual framework that can reduce the negative impact of these risks and
design KRM modifications according to the conditions and objectives of each organization.

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