Data, Information, and Knowledge – Interwoven
To explore the concepts of Data, Information, and Knowledge independently is to attempt building a large and complex puzzle with only a few pieces from the box. While the relationships between these concepts can be as elusive as finding their universal definitions, it is within these relationships that data, information, and knowledge are most meaningful. In the broadest sense, data exists in the form of unorganized and raw facts about the environment that are collected and stored. When this stored data is transformed and processed into something more meaningful and organized, it becomes information. Perhaps most importantly, is knowledge: the collective information stored in the minds of people in organizations over time, and the “set of rules” they use to process that information to make decisions. Upholding the significance of knowledge as a resource is the Knowledge Based Theory of the Firm. Operating based on a few assumptions about the flow of knowledge within the organization; this theory holds knowledge as most strategically important of all the firm’s resources. The Knowledge Based Theory of the firm is also a fierce proponent of common knowledge, emphasizing that successful coordination within the organization relies largely on the presence of common knowledge between its members. At first glance, it seems this theory has completely overlooked the importance of data and information to the firm. But with deeper understanding it becomes apparent that knowledge – as well as information and data – are all largely present in the theory’s foundation. The Foundation of the Knowledge Based Theory
The Knowledge Based Theory operates on the assumptions that firms apply knowledge to the production of goods and services, that knowledge is the firm’s most strategically important resource, and that knowledge is created and held by the individuals within the firm (Grant, 1999). All of this seems quite reasonable, save...
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