Creation and use of knowledge in organisations have become the key source of competitive advantage
Knowledge management (KM) is a hot topic these days. There are those who underline its importance not just for a contemporary organisation but for the economy as a whole. And there are others who go as far as rendering KM on par with a physical resource such as labour or capital, giving it intrinsic value to market and trade.
Knowledge and the changing world
To understand KM and its importance in a cont-emporary organisation, one has to see it within the broader context of the enormous changes taking place in the global economic framework. Division of labor gave the industrial age enormous efficiency and productivity, but it also underplayed the importance of knowledge by creating a large proportion of unskilled workers. We are now experiencing a major shift the information revolution linked to the development of information and communication technology (ICT) accelerating an increase of knowledge workers and emphasizing the importance of knowledge within economic affairs. It is becoming our most powerful engine for production rather than machinery.
Creation and use of knowledge in organizations have become the key source of competitive advantage. With telecommunication it becomes possible to transform the way organisations operate, but the rapid advance in ICT within the workplace requires new skills and approach on the part of the employees. Organizations begin to see the need to manage information and knowledge to help employees respond to change as well as encourage creativity, innovation, and learning. KM was born out of this desire to improve the knowledge-organisation and knowledge-worker in this information age.
What is KM Anyway?
An understanding of knowledge and the process of knowing, and how that differs from information and information management will help. There is no consensus regarding its definition. Managing the enterprise knowledge is not only about managing people in whose heads the knowledge resides but also about supporting organisational learning, information sharing and collaborative work through use of ICT. There is no consensus on a definition of knowledge, but a common view is that data is symbols, facts and numbers; information is processed data, i.e. data in context and readily captured in documents and databases; and knowledge is information plus experience to act upon.
Some view knowledge as an objective and stable entity that can travel within and between organisations that can easily be codified using technology. Others view it as being tacit, situated, subjective, personal as well as something that shapes and is being shaped by social reality. Networking is knowledge because knowledge doesn't exist in isolated state in the objective world but resides in various socio-cultural contexts.
One cannot overlook the importance of ICT in dealing with KM, however, one can also argue that the most dramatic improvements in managing an organisation knowledge will be human rather than technological. For example, I can store the data '30 degrees is hot' and I might even store enough data so that you can figure out that I am referring to outside temperature of air and that I am using Celsius and not Kelvin or Fahrenheit scale. But depending on who you are, where you are, and what time of the year it is, you may or may not understand or agree with that statement.
Modelling KM
Due to myriad ideas under the broader banner of KM, it is necessary to identify a set of structures to help us make sense of the subject. Three useful frameworks are intellectual capital (IC), knowledge category (KC) and social construction (SC).
IC highlights the value of knowledge as an organisational asset as having intrinsic value. KM is thus a method of exploiting the IC of employees by capturing their knowledge and safeguarding it for the organisation use. IC could take the form of 'human capital' the capital value of innovation of employees when creating new products and services or improving processes. It could also take the form of 'structural capital' the knowledge of organisation that doesn't go home after working hours such as legal rights of ownership, patents, technologies, inventions, data, strategies, publications, standards, machine settings, culture, systems, policies, and procedures. Or it could take the form of 'customer capital' the capital value of an organisation customer base. Increasing the return on customer capital requires more than customer relation management (CRM). It demands understanding the dynamics of managing this asset in terms of what makes it grow and appreciate.
KC highlights five types of knowledge: enco-ded, embrained, embodied, encultured, and embedded. Through these discrete categories, focus on the commoditisation of knowledge as a product is reduced. For example, knowledge is embedded in computer programmes; embodied in people's roles and physical movements; embrained in people's minds; encoded on paper; and encultured in the way things are done in a particular cultural context. More influential is the idea that call upon recognition that knowledge creation requires the tapping of tacit and often subjective insights, intuitions and hunches of individual employees and making them available to the whole organisation and not just the explicit knowledge that is easily recorded, identified, articulated and employed.
In SC, knowledge is linked to social and learning processes. Knowledge is embodied within organizations through the process of social interchange. It is an emergent process of knowing through which humans make sense of the world in a particular context using information as a tool. The idea here is more about the 'knowing organisation' rather than managing knowledge in an organisation, which suggests that knowledge is not necessarily an object to be acquired. It focuses on the support for social structures and processes within which knowledge is created and shared within an organization.
KM is expensive. Knowledge is an asset, but its effectiveness requires the investment of other assets such as money and people. Effective KM requires hybrid solutions involving both people and technology. ICT is good at capturing, transforming and distributing highly structured data, but people are the ones who possess knowledge and ability to interpret information within broader context and synthesis it to form new information or new knowledge.
KM is highly political. By now you should know that 'knowledge is power' and power brings politics, lobbying, and under-the-table deals. Sharing and using knowledge are often unnatural acts. We hoard our own knowledge for whatever reason and look suspicious at the knowledge of others. Knowledge exchange is not only threatening, but also requires some effort from us. Knowledge is culture specific. Some cultures do value creation and use of knowledge and give merits to those knowledgeable, and others simply don't.
Access to knowledge is just the beginning of the story. KM should be about improving work processes and decision making continuously; it should also be about engendering creativity and innovation; and requires attention and engagement. KM never ends. New situations always require new knowledge.
Knowledge by itself has no value if it remains unused, not shared or not value-created. Most information management systems existing today in organisations transform data into information that is fed to people. It is up to the people to evaluate the information and understand what can be done with it this is how information becomes knowledge. Whether knowledge is shared, action is undertaken, and decisions are based on knowledge make the big difference. Will the employees make an effort to use the knowledge for the company's benefit? Will the management encourage the usage and sharing of knowledge? Will the management reward the employees to seek, use and share knowledge for the benefit of the company? That is a different matter.
Definitions of knowledge
Information plus experience to act upon
An objective and stable entity that can travel within and between organizations.
By Hafidh Saif al-Rawahy
businesstoday 2006
