The Concept of Knowledge Management - Research Paper Example

Knowledge management Abstract Knowledge management refers to the process that organizations often use to capture, develop, share, and utilize the employees’ knowledge capital at all levels of the organization effectively (Bhojaraju 2005, p.37: Dalkir 2005, p.3). Organizational learning through knowledge management is a significant source of organizational competitive advantage since multinational corporates must compete within complex and constantly shifting business environments (Jackson, Hitt, & Denisi 2003, p.3). Organizations can leverage knowledge management in their strategic operations, to make more informed decisions concerning how to organize their value chain operations to maximize customer satisfaction. Knowledge management enables organizations to improve their processes in terms of effectiveness, efficiency, as well as innovativeness, in the creation of value in form of quality products and services for customers (Mehrabani & Shajari 2012, p.164). Avoiding wastage, sharing relevant best practices, and conducting corporate learning programs are ways through which the firm can apply knowledge management systems in the sales, marketing, manufacturing and production processes. Key challenges in the establishment of knowledge management systems within the organizations’ operational structure include the problem of acquiring, modelling, and retrieving, reusing, and publishing, as well as maintaining knowledge. Introduction Organizations today are continuously faced with a rapidly shifting global business environment, partly due to globalization and the fast-changing technological advancements, which prompts the need for leadership to respond fast to the increasing complexity and uncertainty (Jackson, Hitt & Denisi 2003, p.3). Enhancing the effectiveness and efficiency of organizational operations is positively correlated to the overall performance of the firm, and ultimately to the establishment of sustainable profitability and sustainability in the end. Organizations are increasingly adopting a knowledge-learning stance as their strategic approach to alleviating the numerous challenges in their operation chains, to achieve their objectives effectively and efficiently (Beliveau, Bernstein, & Hsieh 2011, p.25). This paper examines the concept of knowledge management as applied in corporate management today, with a specific emphasis on the manner in which a firm can create sustainable competitive advantage with knowledge management. Additionally, this paper outlines how knowledge management systems help firms with their sales, marketing, manufacturing, and production, as well as some of the challenges encountered in building knowledge management systems. Knowledge management defined Knowledge management refers to the process of capturing, developing, sharing, as well as the effectively utilizing the employees’ knowledge capital base at all levels of the organization (Bhojaraju 2005, p.37: Dalkir 2005, p.3), thereby continuously enhancing operations while introducing more effective and efficient strategies that help reduce redundancy. In the present highly competitive and continuously shifting global business environment, nothing is even remotely of more import than knowledge management since it is a great source of competitive advantage for the organizations. Organizations are increasingly facing greater challenges in remaining competitive and profitable, without continuously focusing on the creation, management, and effective utilization of knowledge at their disposal, within individual employees, teams, at work, and in the entire market place (Squier & Snyman 2004, p.234). Organizations aim at reducing cycle times, working with the least fixed assets and overhead, shortening the time taken to develop products, enhancing customer service, enabling employees, as well as innovating to deliver high quality products and services through a learning process (Bhojaraju 2005, p.39). Globalization force as well as technological advancements at the workplace is some of the crucial factors compelling organizations to turn to knowledge management as a solution to the numerous challenges facing management today, thus the emphasis on learning organizations. With the continuously increasing complexity and uncertainty in the global business environment, winning organizations are those that possess the capacity to adapt to the rapid shifts in order to operate effectively; in that respect, knowledge management enhances organizational effectiveness at the complex information-overloaded workplace environment today. Constituents of knowledge management Knowledge management has three broad constituents namely people, processes, and technology (Bhojaraju 2005, p.39); all these three constituents are extremely essential for the establishment of a learning or knowledge-based organization. The people component requires the participation of all the employees in the process of creating and sharing knowledge, and it often calls for a comprehensive organizational reorientation, from the conventional mind-sets and workplace culture of hoarding knowledge to a knowledge-sharing and trust-based workplace environment. A blend of motivation techniques such as recognition and rewards, realignment of performance appraisal systems, alongside other measurement systems is crucial in achieving the people component of knowledge management. The peoples’ side of the organization requires visibility, recognition, as well as credit for their exceptional expertise in their respective areas of specialization for them to contribute effectively to the overall organizational effectiveness and success. The process component entails standardized processes for contributing, managing, as well as retrieving content, which must be clear and simple enough to be easily understood by all employees across the organization. The technology component is an organizational tool that supports knowledge sharing, collaboration, workflow, as well as document-management both within and without the organization. The knowledge management tools provide a secure and central platform where all employees, customers, partners, as well as suppliers can share information and knowledge, thereby helping each other and the entire organization to reach greater heights of success. A KM approach to competitive advantage Within the spheres of strategic management, organizational learning through knowledge management is considered one of the primary sources of organizational competitive advantage (Njuguna 2009, p.32), especially because multinational corporates must compete within complex and constantly shifting business environments. Competitive advantage has been conceptualized as the unique position of an organization in relation to its competitors, which normally is the end of every strategy (Porter 1985, p.1); competitive advantage is a critical predictor of the overall organizational performance. Whereas organizations derive all their capabilities from the vast body of resources at their disposal, these specific capabilities are the organizations’ main source of competitive advantage; in that respect, an organization’s capacity to integrate its different resources to form powerful capabilities is a critical predictor of competitive advantage (Ramanigopal 2013, p.2149). The achievement and sustenance of strategic competitive advantage, the enduring benefit of creating value using unique strategies that cannot be duplicated by rivals, is the concern of every organization. In that respect, many organizations are increasingly preoccupied with knowledge management as a significant source of competitive advantage in order to beat competition while ensuring continuous profitability and sustainable customer value (Squier & Snyman 2004, p.234). Generally, a firm’s core capabilities, those that create the most remarkable value for the organization, are the ones that contribute greatly to the establishment of the firm’s competitive advantage. To explore knowledge management as a source of competitive advantage, a learning organization should adopt specific strategies, mechanisms, as well as practices that prompt its members to learn always to adapt to the constantly shifting global business environment. Organizations can leverage knowledge management in their strategic operations, to make more informed decisions concerning how to organize their value chain operations to maximize customer satisfaction (Arora 2011, p.165). In that case, knowledge management builds organizations’ capacity to identify, locate, and to deliver information as well as knowledge to the point of valuable applications, thereby leading to the establishment of whole new organizations altogether. Knowledge management also facilitates the learning of a workforce through a number of ways such as externalization, internalization, socialization, as well as through communities of practice, besides engendering greater adaptability among the workers and their satisfaction at the workplace, thereby creating competitive advantage (Thi Nguyet 2010, p.47). Additionally, knowledge management enables organizations to improve their processes in terms of effectiveness, efficiency, as well as innovativeness, in the creation of value in form of quality products and services for customers (Thi Nguyet 2010, p.48). Organizational efficiency and effectiveness as well as flexibility and responsiveness to market dynamics are fundamental aspects of the organization’s competitive advantage, which can be enhanced through effective knowledge management (Li, Tarafdar, & Subba 2012, p.398). Organizations can acquire strategic competitive advantage by acquiring, developing, sharing, as well as applying knowledge; new knowledge should be integrated with prevailing knowledge to originate deeper and viable strategic insights, to enhance a firm’s overall performance (Thi Nguyet 2010, p.48). The application of superior knowledge enables an organization to originate resources in superior ways thereby creating value in more superior ways as well, and enabling the organization to compete effectively against its rivals while developing strategic competitive advantage (Ramanigopal 2013, p.2149). Application of knowledge management systems Managers can apply knowledge management systems in the sales, marketing, manufacturing and production processes of their firms to achieve effectiveness of operations, continuous profitability, as well as sustainability. The knowledge management system provides a significant framework through which the organization can effectively utilize its knowledge resources stored in the various departments in existence, besides providing a mechanism to focus and prioritize efforts aimed at enhancing business growth (Rowley 2004, p.149). In that respect, to achieve optimum operational effectiveness in all the highlighted areas, the organization needs to follow the fundamental framework provided by the knowledge management system, by effectively utilizing the knowledge resources at its disposal. Avoiding wastage by using minimum resources in achieving the production, sales as well as marketing goals of the organization is a great advancement in the right direction of operational effectiveness and efficiency accordingly. Similarly, the sharing of relevant best-practices case studies or lessons learnt during numerous organizational training programs both within and without the organization, especially in the specific areas that are of critical importance to the organization is also a significant way of enhancing operational effectiveness and efficiency. Learning organizations are able to extend knowledge from different sources and integrating it in solving organizational challenges in all the key areas of chain management thereby further enhancing the overall organizational performance. Apart from that, organizations should implement the appropriate IT tools to support the function of sharing knowledge as well as collaboration within the enterprise and across the chain, to help organizations in making informed operational decisions in the sales, marketing, manufacturing and production processes. Furthermore, the establishment of communities of practice by experts in the critical knowledge capabilities of the organization as well as setting up of well-defined processes for knowledge contribution and implementation does help organizations to enhance their operational effectiveness accordingly. Moreover, it is also imperative for organizations to conduct thorough corporate learning programs through which their staff can continuously enhance their capabilities and potential in the completion of tasks, to enhance the overall operational effectiveness. For instance, the organization needs to facilitate the acquisition of new knowledge by the employees through structured training programs which enhance their capabilities at doing tasks thereby enhancing the sales, marketing, manufacturing and production processes respectively. Nevertheless, the organization should always strive to convert as much individual knowledge as possible into corporate knowledge assets and to apply technology that facilitates sharing of knowledge as well as collaboration at the different levels in the operational chain to achieve high performance. Individual employees of the firm have the capacity to develop unique talents and capabilities, which if harnessed an integrated into the corporate knowledge assets can yield much greater value in the sales, marketing, manufacturing and production processes of the firm. Challenges in building KM systems There are six key challenges that organizations face in their push for the establishment of knowledge-based systems; the first challenge revolves around the aspect of knowledge acquisition, and it entails the problems encountered in capturing information and turning it into usable knowledge (Bhojaraju 2005, p.42). Organizations continuously experience difficulties in making tacit knowledge explicit, locating gaps in the knowledge, sourcing and integrating information from multiple sources, and acquiring knowledge from unstructured media. The second challenge in building knowledge management systems lies in the component of knowledge modelling, which connects the acquisition of knowledge and its actual utilization at the workplace in solving organizational challenges (Lin & Shu-Mei 2005, p.208). Organizations are facing the challenge of establishing the knowledge management structures that can present knowledge in the most appropriate way that can facilitate its utility in problem solving. Ontologies, the general formulizations of concepts, attributes, relations, as well as relations of a knowledge base, has been prescribed as one of the most significant knowledge modelling ideas, ways through which organizations can create knowledge model structures. Ontologies help the organization to hold as well as to organize the acquired knowledge in formats that are easy to understand and explain the manner in which the knowledge will be used. The third challenge in the establishment of knowledge management systems is knowledge retrieval since it is not easy to trace a specific piece of information especially when knowledge stores are large (Bhojaraju 2005, p.42). Organizations face two major problems in knowledge retrieval including the challenge of finding knowledge after it has been archived, which calls for an understanding of the archive’s structure to facilitate easy navigation, and the issue of retrieving a specific detail of content that is relevant to a particular problem from the repository. The fourth challenge in establishing knowledge management is knowledge re-use, especially because knowledge bases or systems are often constructed afresh (Steyn 2003, p.514), thereby thoroughly impeding the cost-effective utilization of knowledge. Organizations hardly acquire and reuse their problem-solving experience or content domain partly because knowledge often takes multiple representations based on the specific problem-solving context. Organizations can further enhance their gains from investment in the establishment of knowledge assets by learning how to use and apply the knowledge presently in their possession. The fifth challenge to establishing knowledge management systems is that of publishing or disseminating knowledge, which can be summarized as the problem of acquiring the relevant knowledge in the appropriate form, in the right place, to the right person, and at the right time (Bhojaraju 2005, p.42). Since different people have different comprehension capabilities, and the manner in which knowledge is presented greatly affects the manner in which different individuals comprehend its content, organizations need to present knowledge in different ways to help all the users to arrive at a unified understanding. Understanding the multiple user perspectives as well as the knowledge content are both significant prerequisites to effective publication of knowledge since they will facilitate getting the presentation right while ensuring the inclusion of all relevant pieces of knowledge respectively. The sixth challenge to establishing a knowledge management system is maintenance, which entails constantly updating content as it changes as well as a much profound analysis of knowledge content; whereas some content lasts longer, other content ages faster requiring to be discarded. Organizations are facing the challenge of identifying the parts of their knowledge bases that must be discarded and when they should be discarded, as well as the challenge of verifying and validating their content, and satisfying its safety. Conclusion Ultimately, knowledge management is indeed an effective way of not only capturing, but also developing, sharing, as well as the effectively utilizing the employees’ knowledge capital, thereby continuously enhancing operations while introducing more effective and efficient strategies that help reduce redundancy. Organizations utilize their knowledge management systems in their strategic operations, to make more informed decisions concerning how to organize their value chain operations to maximize customer satisfaction. Knowledge management enables organizations to improve their processes in terms of effectiveness, efficiency, as well as innovativeness, in the creation of value in form of quality products and services for customers. Firms can apply their knowledge management systems in their sales, marketing, and manufacturing as well as production processes in numerous ways including avoiding wastage, sharing relevant best practices, and conducting corporate learning programs. Organizations often encounter six major challenges in the establishment of knowledge management systems including knowledge acquisition, knowledge modelling, knowledge retrieval, knowledge reuse, knowledge publishing, as well as maintenance, which must be overcome to achieve a knowledge-based operational effectiveness. References Dalkir, K. (2005). Knowledge Management in Theory and Practice. Burlington, MA: Elsevier. Jackson, S.E., Hitt, M.A., & Denisi, A.S. (2003). Managing Knowledge for Sustained Competitive Advantage: Designing Strategies for Effective Human Resource Management. San Francisco: Jossey-Bass. Porter, E.M. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: The Free Press. Njuguna, J. I. 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