The Importance of Knowledge Management

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W R IT T E N B Y : J E R R E L D E P A A U W


Nowadays, knowledge is an important factor for people to gain distinctive advantages in the present society; through training, coaching and education, people can develop their skills, abilities and attitudes, to gain those distinctive advantages. Through knowledge, people get better jobs, higher compensation and more wealth. Knowledge is a key-driver for people, to survive in this knowledge intensive world; more knowledge means more power. The importance of knowledge in an organizational-context is growing rapidly as well. The dynamics and complexity of the organization’s environment is hard to understand. Knowledge could be the solution to understand and gain better insights in this complex environment, which helps knowledge-based organizations to accomplish their successes. In general, knowledge is the greatest power source in today’s society, but recent studies have shown that not only the absorption and adoption of knowledge is the key to gain these distinctive advantages. There has been a shift from “knowledge is power” to “knowledge-sharing is power”. This new phenomenon is the subject of many researchers and recent studies. The effect of this new trend is that knowledge is becoming an organization’s key resource, to gain competitive advantage. Managers strive to transform the traditional organization into a “learning-organization”, success. to realize organizational



As stated above, knowledge is the key factor to realize organizational success. This keyresource has to be managed as professional as possible, inside the knowledge-based firms. A knowledge-based firm is an organization which produces knowledge intensive products. Characteristics of those products:     Knowledge intensive: only specialists with the right knowhow could create this product. Intangible: the product is highly intangible and hard to observe. Heterogeneous: every product is adapted to the customer, so the product is always different. Simultaneously: both the producer as well as the consumer, has to be involved in the service process. Examples of knowledge-based organizations are: McKinsey & Baker (lawyers), Boston Consultancy Group (consultants), KPMG (accountants) and Microsoft (ICT developers).

The definition of knowledge is hard to define, because knowledge is a very broad concept. One of the most common distinctions in the knowledge literature is between knowledge, information and data:    Data can be defined as raw numbers, images, words, sounds which are derived from observation or measurement. Information, in comparison, represent data arranged in a meaningful pattern, data where some intellectual input has been added. Knowledge can be understood to emerge from the application, analysis and productive use of data and/or information. The relationship between data, information and knowledge seems to be simple. Data leads to information which in turn leads to knowledge. But this relationship is much more dynamic and interactive because knowledge can also lead to information and data. Also the knowledge we possess shapes the type of information and data we collect and how we analyze it (Hislop, 2005).

The vast majority of contemporary knowledge literature distinguish two different types of knowledge, these types are defined as explicit and tacit knowledge. These types of knowledge have very different foundations, based on different epistemologies. These epistemologies will not be discussed in this essay. Explicit knowledge is synonymous with objective knowledge. The characteristics of explicit knowledge are:      Codifiable: knowledge can be codified into a understandable forms. Objective: knowledge is objective and can be observed. Impersonal:...
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