Strategic Importance of Knowledge Management

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Strategic Importance of Knowledge Management 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, while only the individual himself may retrieve knowledge stored within his mind, knowledge stored outside can be retrieved by anybody familiar with the storage systems. In organizations, knowledge is often embedded not only in documents and presentations but also in “organizational routines, processes, practices, and norms,” and through person-to-person cont... ... middle of paper ... ...ress, 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. and Depres, F.L. (2000), The Knowledge Dividend, Financial Times and Prentice Hall, London. 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.
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