KNOWLEDGE MANAGEMENT IN SMALL AND MEDIUM ENTERPRISES (SMEs) Abstract: This paper review ten literatures consist of ten articles on the topic of knowledge management (KM) in small and medium enterprises (SMEs). This paper were highlighted about definition of KM and SMEs, characteristics and roles of SMEs, KM in SMEs, why SMEs need KM, advantages and disadvantages implement KM in SMEs, KM strategies and tools in SMEs, KM issues or challenges in SMEs, recommendations and conclusion. Keywords: Knowledge management, small and medium enterprises
In this era, knowledge management (KM) is one of the most used and at the same time controversial concepts, currently discussed in academia and the business world. Interest in KM stems from the realization that organizational knowledge is a strategic corporate asset that needs to be generated, represented, stored, transferred, transformed and applied to future organisational problems (Schulttze and Stabell, 2004). Large companies and multinationals, such as Honda, Cannon, Matsushita, NEC, Sharp, Kao, Ford, PriceWaterhouseCoopers, Texas Instruments and HP, have long recognised the need for KM in order to respond quickly to customers, create new markets, rapid developing new products and handle emergent technologies (Nonaka, 1991). Consequently, KM practices are now considered as established practice in large organisations (Srikantaiah and Koenig, 2000). However it not happens in small and medium enterprises (SMEs) which KM tends to fall into failure to be practice in organization. According report that in Small Business Service (2004) found that statistics reveal that 91 per cent of SMEs that registered themselves for VAT in 2000 were still surviving 12 months after they registered. Sixty four per cent of businesses registered in 1998 were still going three years after registration. Hence, organisation sustainability is an issue because 36 per cent of the SMEs perish after three years. It is further evidenced by Pollard (2003), were mentioned evidence of diminishing interest in KM, such as: 1) Budgets for KM have been slashed everywhere, and whole KM departments eliminated; 2) Many companies are now trying to outsource KM, no longer viewing it as a core competency; 3) Whereas at one time six of the top ten bestsellers at Books for Business were about KM, now very few KM titles even enter the list; 4) Writers are starting to predict “the death of KM” (Firestone, 2001b), lament “where did KM go wrong” (Grey, 2003) and even decry “the autism of KM” (Pollard, 2003); 5) There are now fewer chief knowledge officers in Fortune 500 companies than there were ﬁve years ago; 6) Half of the KM conferences scheduled in the past year in Toronto were cancelled for lack of interest (Pollard, 2003). Apart from that, there are important to study the implementation of KM in SMEs from the bottom line until top to ensure it will expand and become tools for competitive advantages and superior performance in SMEs.
Definition of KM
There are many definitions toward KM when it was discussed. Here are few of such a definitions of KM by Mesaric (2004), first is a process that helps organization to find, select, organize, disseminate and transfers and expertise necessary for activities such as problem solving, dynamic learning, strategic planning and decision management”. Second is: “Knowledge management is the process of critically managing knowledge to meet existing needs, to identify and exploit existing and acquired knowledge assets and to develop new opportunity” and lastly, KM is process (product) comprised of two different things: knowledge and management, which are by themselves parts of certain hierarchies. It is useful to consider KM as a “creation” with multilayer architecture that has it’s own dynamics and development cycles. According Sveiby’s study (as cited in Salojarvi, Furu, & Sveiby, 2005) defined that KM is the art of creating value by leveraging intangible assets. KM is...
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