Strategic Importance of Knowledge Management
Abstract
Today the world has more and more of free flow of information leading to transfer of knowledge from a person or an organization to others. Whereas this invariably leads to faster development, it also impacts the competitive advantage held by the innovators of processes or technology. It has therefore become strategically important for one and all in business to understand the knowledge, processes and controls to effectively manage the system of sharing and transferring the information in the most beneficial fashion.
This paper dwells upon definition, types, scope, technology and modeling of knowledge and Knowledge Management while examining its strategic importance for retaining the competitive advantage by the organizations.
What is knowledge?
Plato first defined the concept of knowledge as justified true belief'' in his Meno, Phaedo and Theaetetus. Although not very accurate in terms of logic, this definition has been predominant in Western philosophy (Nonaka and Takeuchi, 1995). Davenport et al. (1998) define knowledge as ``information combined with experience, context, interpretation and reflection''.
The terms knowledge'' and information'' are often used inter-changeably in the literature and praxis but a distinction is helpful. The chain of knowledge flow is data-information-knowledge. Information is data to which meaning has been added by being categorized, classified, corrected, and condensed. Information and experience, key components of definitions of knowledge, are put into categories through the process of labeling with abstract symbols. This allows the process of synthesis to occur more efficiently than when dealing with masses of individual bits of information. Information coded into symbols to make it "knowledge" may be stored both inside and outside the individuals. Thus, knowledge may be stored within a person in his mind or outside the person in books, manuscripts, pictures, and audio and videotapes or discs. However,
Today the world has more and more of free flow of information leading to transfer of knowledge from a person or an organization to others. Whereas this invariably leads to faster development, it also impacts the competitive advantage held by the innovators of processes or technology. It has therefore become strategically important for one and all in business to understand the knowledge, processes and controls to effectively manage the system of sharing and transferring the information in the most beneficial fashion.
This paper dwells upon definition, types, scope, technology and modeling of knowledge and Knowledge Management while examining its strategic importance for retaining the competitive advantage by the organizations.
What is knowledge?
Plato first defined the concept of knowledge as justified true belief'' in his Meno, Phaedo and Theaetetus. Although not very accurate in terms of logic, this definition has been predominant in Western philosophy (Nonaka and Takeuchi, 1995). Davenport et al. (1998) define knowledge as ``information combined with experience, context, interpretation and reflection''.
The terms knowledge'' and information'' are often used inter-changeably in the literature and praxis but a distinction is helpful. The chain of knowledge flow is data-information-knowledge. Information is data to which meaning has been added by being categorized, classified, corrected, and condensed. Information and experience, key components of definitions of knowledge, are put into categories through the process of labeling with abstract symbols. This allows the process of synthesis to occur more efficiently than when dealing with masses of individual bits of information. Information coded into symbols to make it "knowledge" may be stored both inside and outside the individuals. Thus, knowledge may be stored within a person in his mind or outside the person in books, manuscripts, pictures, and audio and videotapes or discs. However,
References: Bassie, L.J. (1997), ``Harnessing the power of intellectual capital ' ', Training and Development, Vol. 51 No. 12, pp. 25-30. Beckman, T. (1997), ‘‘A methodology for knowledge management ' ', International Association of Science and Technology For Development (IASTFD) AI and Soft Computing Conference, July, Banff. Beckman, T. (1999), ‘‘The current state of knowledge management ' ', in Liebowitz, J. (Ed.), Knowledge Management Handbook, CRC Press, Boca Raton, FL. Bhatt, G.D. (2000), ‘‘Organizing knowledge in the knowledge development cycle ' ', Journal of Knowledge Management, Vol. 4 No. 1, pp. 15-26. Blake, P. (1998), ``The knowledge management expansion ' ', Information Today, Vol. 15 No. 1, pp. 12-13. Broadbent, M. and Lofgren, H. (1993), ‘‘Information delivery: identifying priorities, performance, and value ' ', Information Processing and Management, Vol. 29 No. 6, pp. 683-703. Bunge, M. (1983). Exploring the world. Dordrecht: Reidel. Coleman, D. (1999), ‘‘Groupware: collaboration and knowledge sharing ' ', in Liebowitz, J. (Ed.), Knowledge Management Handbook, CRC Press, Boca Raton, FL. Davenport, T.H. and Prusak. L. (1998), Working Knowledge: How OrganizationsManage What They Know, Harvard Business School Press, Boston, MA. Dodgson, M. (2000), The Management of Technological Innovation, Oxford University Press, Oxford. Ferdows, K. (1999), ‘‘Generating and sharing knowledge in global operations networks ' ', Keynote address to VI EurOMA Conference, Venice, June. Gibbons, M., Limoges, C., Nowotny, H., Schwartzman, S., Scott, P. and Trow, M. (2000), The New Production of Knowledge, Sage, London. Goh, S.C. (2002), ‘‘Managing effective knowledge transfer: an integrative framework and some practice implications ' ', Journal of Knowledge Management, Vol. 6 No. 1, pp. 23-30. Gray, P.H. (2000), ‘‘The effects of knowledge management systems on emergent teams: towards a research model ' ', Journal of Strategic Information Systems, Vol. 9, pp. 175-91. Hakansson, H. (1982), International Marketing and Purchasing of Industrial Goods, John Wiley, Chichester. Hayes, N. (2001), ‘‘Boundless and bounded interactions in the knowledge work process: the role of group ware technologies ' ', Information and Organisation, Vol. 11 No. 2, pp. 79-101. Heron, J. (1996), Co-operative Inquiry: Research Into the Human Condition, Sage, London. Holliday, S.G. and Chandler, M.J. (1986), Wisdom: Explorations in Adult Competence, Karger, Basel. Husserl, E. (1931), Ideas: General Introduction to Pure Phenomenology, trans. by Royce Gibson, W.R., Allen and Unwin, London. Huang, K-T., Lee, Y.W. and Wang, R.Y. (1999), Quality Information and Knowledge, Prentice-Hall, Inc., Englewood Cliffs, NJ. Huber, G.P. (1991), ‘‘Organizational learning: the contributing processes and the literatures ' ', Organization Science, Vol. 2 No. 1, pp. 88-115. Johnsen, B. (1992), ‘‘Institutional learning ' ', in Lundvall, B.-A. (Ed.), National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning, Pinter, London, pp. 23-41. Kakabadse, A. and Kakabadse, N. (1999), Essence of Leadership, International Thomson, London. Knorr Cetina, K. (1999), Epistemic Cultures: How Sciences Make Knowledge, Harvard University Press, Cambridge, MA. Martinez, M.N. (1998), ``The collective power of employee knowledge ' ', HR Magazine, Vol. 43 No. 2, pp. 88-94. Murray, P. (2000), ‘‘Designing business benefits from knowledge management ' ', in Despres, C. and Chauvel, D. (Eds), The Present and the Promise of Knowledge Management, Butterworth-Heinemann, Boston, MA, pp. 171-94. Murray, P. and Myers, A. (1997), ‘‘The facts about knowledge ' ', Information Strategy, Vol. 2 No. 7, September, pp. 29-33. Nonaka, I. (1991), ‘‘The knowledge-creating company ' ', Harvard Business Review, Vol. 69 No. 3, pp. 27-38. Nonaka, I. (1994), ‘‘A dynamic theory of organizational knowledge creation ' ', Organization Science, Vol. 5, No. 1, pp. 14-37. Nonaka, I. and Konno, N. (1998), ‘‘The concept of ‘Ba '. Building a foundation for knowledge creation ' ', California Management Review, Vol. 40 No. 3, p. 40-54. Nonaka, I. and Takeuchi, H. (1995), The Knowledge Creating Company, Oxford University Press, New York, NY. Nonaka, I., Toyama, R. and Konoo, N. (2000), ‘‘SECI, Ba and leadership: a uni.ed model of dynamic knowledge creation ' ', Long Range Planning, Vol. 33, pp. 5-34. O 'Dell, C. and Jackson, C. (1998), If Only we Know What we Know: The Transfer of Internal Knowledge and Best Practice, Free Press, New York, NY. Schultze, U. and Boland Jr, R.J. (2000), ‘‘Knowledge management technology and the reproduction of knowledge work practices ' ', Journal of Strategic Information Systems, Vol. 9, pp. 193-212. Stoner J.A.F., Freeman R. E. and Gilbert D.R. (2004): Management, Pearson Education, U.K. Swan, J. and Newell, S. (2000), ‘‘Linking knowledge management and innovation ' ', in Hansen, H.R., Tissen, R., Andriessen, D Van Buren, M. (1999), ‘‘A yardstick for knowledge management ' ', Training and Development Journal, Vol. 53 No. 5, pp. 71-8. Wagner, E. (2000), ‘‘Communities of practice: the structure of knowledge stewarding ' ', in Despres, C. and Chauvel, D. (Eds), The Present and the Promise of Knowledge Management, Butterworth-Heinemann, Boston, MA, pp. 205-24. Wheelen T.L. and Hunger J.D. (2004): Strategic Management and Business Policy, Pearson Education, U.K. Winter, S.G. (1987), ‘‘Knowledge and competence as strategic assets ' ', in Teece, D.J. (Ed.), The Competitive Challenge: Strategies For Individual Innovation and Renewal, Ballinger, Cambridge, MA, pp. 159-84.