In today’s economy, corporations are constantly seeking was to achieve faster decision making, higher levels of product, better service, and process innovation to gain competitive advantage over other corporations. Various information technologies have been adapted in to corporation’s business plans in order to optimize competitive advantage. However, with the increase in competition, information technology’s applications in business no longer serve as a great advantage.
The need for new business strategies arises along with the emergence of the knowledge society (Styhre, 2003) having information is no longer a source of competitive advantage. In today’s business environment, organizational knowledge is recognized as a significant source of competitive advantage, how quickly organizations determines knowledge and creates value out of it determines its competitiveness. (Shukla) In an economy where the only certainty is uncertainty, the one sure source of competitive advantage is knowledge.
When markets shift, technologies proliferate, competitors multiply, and products become obsolete almost overnight, successful companies are those that consistently create new knowledge, disseminate it widely throughout the organization, and quickly embody it in new technologies and products. -Harvard Business Review (1998) Knowledge management is a business strategy that identifies, organizes and shares information essential to the company so it can be applied to optimize business performance. The content of this paper provides the fundamental concepts to the practice of Knowledge Management and how it should be applied.
Explanation of the technology, its application in business, benefits, and the essentials of designing a knowledge management program are introduced and explained in further details. Knowledge Management: Technology and Trends The practice of knowledge management is often confused with information management. So what is knowledge management? And exactly how should it work? B. Begeron (2003) defines knowledge management as “the ability to selectively capture, archive, and access the best practices of work-related knowledge and decision making from employees and managers for both individual and group behaviors.
Knowledge management is still a relatively new practice in business organizations today and since it is a very broad concept; there is no certain definition of how it should be practiced. The concept of recording knowledge first began about 15,000 years ago; it began as writing down selected knowledge of society’s rules, regulations, and cumulative knowledge for the government. In Mesopotamia about 5,000 years ago, people began losing track of the thousands of baked-clay tablets used in recording legal contracts, tax assessments, and laws. Thus, result in the first institution aimed for knowledge management, the library.
The library was located in the centre of town and collections of knowledge tablets were organized by knowledge managers. (Bergeron, 2003) Through out the 1900s the concept of knowledge management has also been applied in the military in the form of command and control. (Harvard Business Review, 1998) In a knowledge organization, defined by Bergeron (2003) as “corporations that take a systematic approach to capturing information”, knowledge and knowledge workers are treated as the organization’s most valuable asset. Therefore, the sharing of knowledge between employees is essential in knowledge management.
But how does an organization make this work? In order for a knowledge management program to be successfully applied, several key factors must be considered: employees, leadership, application of information technology (to be discussed in later section), and most important of all, knowledge. Knowledge workers serve as the basis of information sharing in a knowledge organization, as mentioned before, knowledge workers are treated as one of the company’s most valuable asset. Bergeron (2003) define knowledge workers as “employees and managers who contribute significantly to the intellectual capital of the company.
To get the most out of its workers, some form of incentive that encourages the sharing of information must be created. This increases internal competition to achieve the overall goals. An example of this is Buckman Labs USA, a biotech firm that reorganized it self to optimize knowledge sharing. Buckman Labs created a knowledge transfer department to co-ordinate effort; employees best at knowledge sharing gain both financial rewards and management positions. (Sveiby, 2001) The training and education of knowledge workers is also important since it is a way of increasing the value of organization’s asset.
The loyalty of knowledge workers is also essential to the company, since they are treated as the company’s asset, knowledge workers resigning from a company would be a loss to the organization since great amount of resources have been invested in to its workers. The loyalty of knowledge workers are put to the test when competing companies offer greater salaries for comparable work. The key to knowledge worker’s loyalty is to build trust among management and workers, workers need to understand the effort and resources the company put in to them.
This idea is stated as follows in Essentials of Knowledge Management. Bergeron (2003) Knowledge workers bring certain competencies to the corporation in exchange for pay, benefits, recognition, a sense of contributing to something greater than themselves, an increased sense of self-worth, the opportunity to work with and learn from others, and, in many knowledge organizations, formal educational opportunities. The responsibility of building the knowledge worker’s relationship with the company is left to the management group, which will be discussed in the next section.
Leadership plays an important role in knowledge organizations, it is the management group’s responsibility to set a business objective and define a knowledge management program that complies with it. Typical responsibilities of management also includes: motivating employees, assigning individual responsibilities, safeguarding information. In order to optimize the performance of knowledge workers, management must set a systematic framework of information sharing among knowledge workers within the organization.
Setting a systematic framework provide employees with clearly defined responsibilities, at the same time, it should define how individuals within the organization can relate to each other. (Shukla, 2002) Honda and other Japanese companies often do this by giving workers information beyond their operational requirements, this assists in the sharing of information responsibly, and innovates creative solutions from unexpected sources. ( Sveiby, 2001) Another way to encourage the sharing off information is for the management group to create the right environment.
Xerox USA, does this by providing convenient places where workers can get together called the “distributed coffee pot” ( Sveiby, 2001) Hewlett- Packard, USA, does this by building offices as open spaces. ( Sveiby, 2001) A successful company is one that consistently create new knowledge, share is throughout organization and quickly apply it in new technologies and products. Therefore it is up to the management group to assure the sharing of knowledge on a daily basis, as a business practice. Most knowledge managers go through special trainings in philosophy, psychology, sociology and business management.
