Knowledge Management - Research Paper Example

?Running Head: Knowledge Management Knowledge Management [Institute’s Knowledge Management Introduction and Executive Summary The main purpose of this paper is to present the main advantages and uses of knowledge management, when applied to the world of business and corporations. It will in presentation in the form of an executive report, which will first address why corporate world, especially companies, which are operating in competitive industries might need to make use of this resource. It will first present a small summary of the concept of knowledge management (Stary, 2007). This will include the definition of knowledge management, and the reason for this concept receiving so much importance. Also, since it a term which is open to interpretation, the definition will state the interpretation of a few authors as well. After this, the paper will narrow the concept down to the usefulness of knowledge management in the corporate world. It will take a hypothetical situation in which a company is experiencing several threats and difficulties in operating, due to both internal and external factors, which any ordinary business would experience in the face of a competitive industry. These difficulties will be pertaining to several areas, such as those from the macro (external) environment, like legal, political, technological, and social issues. Furthermore, the paper will elaborate on the competitive (internal) environment of the industry, which refers to directly related parties to the company, such as customers, supplies, new entrants, and competing firms within the industry. The paper will discuss problems, which this hypothetical company may face in the competitive environment. Finally, the paper will delve into a discussion of how and why a company can implement the use of knowledge management to such problems, for a successful and feasible solution. How would business community benefit from knowledge management? Often, the question that arises when such new techniques is that how would the technique bring about positive change? What factors will it help influence, and whether the effect is multifold? This paper states the answer of this question in detail. It elaborates later on, on the advantages that are stated below, explaining the benefit of implementing knowledge management to the business community. Currently, a majority of firms are under pressure due to the various market forces working against them, creating competition, problems, and challenges. Quite a few experts agree that knowledge management is an advantageous solution to some of these problems, in the following summarized ways. The first way in which knowledge management can help a company is by aiding in reducing the operational costs. This is it teaches the management things which they have not yet learned through their own work experience, including how to make the workplace operate with maximum efficiency. Secondly, this collaboration in between people with different experiences, coming from different departments, improves the quality of work. Thirdly, it can help greatly decrease the employee turnover rates of companies, which can often get out of hand and cause major expenditure for the company. This is because knowledge management helps the employee with their growth as employees and in their careers. Moreover, with knowledge management, the departure of key personnel from a department would not lead to a slowdown, because the remaining employees would be educated about how to react. Fifthly, this increased expertise would lead to a major increase in sales and customer satisfaction rates. Finally, knowledge management can serve the company as its competitive advantage in the industry. Research Findings The industrial revolution brought a large change to this world. Before it, everything was simple, uncomplicated. However, since after it, leading up to this very day, the following technological revolutions have no doubt, left each person with a handful to remember. Whether it is about management, human relations, technology, any person wishing to have a serious, successful career needs to have an expertise regarding all these areas to at least a minimum level. The amount of information present and available for learning has reached such a quantity that people actually feel the need to manage this knowledge. While this is a new science for the industry, one is severely in need (Nonaka, 2005). Furthermore, judging by where the future is headed, survival of the fittest will soon mean that only those who know how to gather, preserve, and use knowledge effectively are able to survive the rougher challenges of life. In addition, while people with proper knowledge management skills may not be viewed as assets in the financial sense of the term, any company with good sense will value these employees enough to consider them in their corporate goals, mission statements, and organizational culture (Award, 2004). Experts believe that the only way to limit human potential would be to advantage and use their brains (Stankosky, 2006). While there are various ways to explain the importance of knowledge management, there is no one worldwide-accepted definition to the phrase. Meredith Levinson states, ‘Knowledge Management is the process through which organizations generate value from their intellectual and knowledge based assets. According to Robert Villegas, Knowledge Management is simply the transfer of knowledge from one person to another, the result of which enables the recipient to benefit from the collected wisdom of the more experienced members of an organization or group’ (Becerra-Fernandez & Sabherwal, pp. 341-348, 2010). Whereas, Robert S. Seiner defines this term in the following way, “Knowledge Management can be defined as a concept in which an enterprise gathers organizes, shares, and analyzes the knowledge of individuals and groups across the organization in ways that directly affect performance” (Frappaolo, pp. 26-28, 2006). This is to say that the concept of knowledge management is comparable to the multiplier effect. The benefits that are derived from it make the organization more efficient and experienced, and at the same time, this efficiency leads to a company having a developed approach to knowledge management (Stankosky, 2006). To consider the true advantages of implementing knowledge management, one can consider the hypothetical example of an average company, which is trying to survive in a competitive industry. The first way knowledge management would help the company is by decreasing their operational costs (Rollett, 2003). As every good manager is aware, there is always a best way of going about a work process. This best way is often recognized through years of experience and skillful expertise. This would mean that beginners would have no chance of knowing about these most efficient techniques to performing their jobs. However, through knowledge management, the more skilled employees can help the less skilled employees, by educating them with all the technical knowhow. Once the company starts implementing efficient work processes at even the lowest levels, the company will ultimately start saving time, money, and resources (Rollett, 2003). This would lead to a large decrease in operational costs of the company, which make up a big reason behind the success or failure of a company operating in a competitive environment. Secondly, improvements that are a result of the company implementing the best practices in all its processes will include greater customer satisfaction and product quality. This is because once the company masters the art of providing the service or producing their product, they will be able to satisfy their customers with more ease. This way also, knowledge management will help the company survive (Stankosky, 2006). Thirdly, it will help reduce the costs related to a high turnover rate. A high turnover rate can imply several expenses for the company. These include severance costs paid to the fired employees, plus advertising for new recruits, then screening, hiring and training these new recruits (Christensen, 2003). Suppose the hypothetical company faces a higher than industry average employee turnover rate. This means that their costs related to turnover are much higher than the industry average too, which presents a challenge to this company. However, knowledge management can lead to employees being much more satisfied with their jobs. In addition, it could help make the company look attractive enough to attract new talent. This would lead to both a lower number of employees needing to be replaced, as well as more employees coming to work at the company without having to employ the completely costly recruitment process. This is especially true for employees who yearn to grow and learn from their jobs, rather than just to gain financial security (Becerra-Fernandez & Sabherwal, 2010). For such employees, knowledge management can prove to be a very thorough and useful learning experience, which helps them grow as employees and improve their careers. This would not only lead to a low turnover rate, but would also allow for a very content labor force. Another way this would prove to be beneficial is that departments would no longer be dependent on their most experienced employees. Since proper implementation of knowledge management implies that each employee is taught by the older more experienced employees about the tricks to the job, about different aspects of the organization, each employee can safely claim to be qualified enough to handle a department in such a crisis. In other words, there will be no one person whose absence would harm the department, because this way each of the employees will be educated, capable workers (Frappaolo, 2006). This would provide a wide contrast from companies, which usually suffer a lot when one of their key personnel quits the job and leaves their whole department in turmoil. Finally, and perhaps most importantly, knowledge management can help give the company an edge over its competition (Hubert, 2000). While some companies can afford to have competitive advantages like low pricing or unique products and services, knowledge management is one competitive advantage that any company can afford to have, whether they own enough monetary resources or not. This is a valuable competitive advantage to have, as it improves the company in several aspects of its functioning, both internal and external. The company, with the improved knowledge would develop a better understanding of the market, which would help it respond more effectively to consumer needs, as well as changes in the market (Hubert, 2000). In addition, a company that knows from experience to keep a proactive plan and strategies in mind, as they will help them with innovation, improvement and consequential success (Keyes, 2006). Due to all these reasons, there are plenty of advocates of knowledge management in the business community. They do, however, realize that it is not an easy job to undertake, and must be executed through careful planning and strategies. Given below are some such steps, which the hypothetical company can take to implement knowledge management to the best of their advantage, with the least number of glitches. Firstly, the organization needs to spread the word about needing this change within the company. Once it creates a sense of urgency within the company, its importance will truly be under realization, and only then the will company have all its employees on board to help with the implementation. Next, the company needs to assemble a few of its employees; especially those will skill, experience, competency, and determination. They will form a coalition that will assist the company through the change, as leaders and facilitators. Through this, each employee will be influenced by the true vision of implementing this technique. Thirdly, the heads and executives at the company need to establish a vision for this company, which they attach to the implementation of knowledge management (Hubert, 2000). This would give them as well as the employees a clear-cut picture about that the company is trying to achieve with it. A five-year vision, a fifteen-year vision, would both be useful for this purpose. It would also help to prove in detail the alignment with the company’s direction with the purpose of knowledge implementation. After this has been done, the management must ensure that their commitment and understanding of the implementation matches that of all the employees. The whole company, down to the lowest level of the hierarchy, is confident about the need and effectiveness of the change that knowledge management will bring about. This is because it is not possible to implement it with success unless the whole of the company is onboard with it, right down to the last employee (Frappaolo, 2006). Fifth, the managers need to examine the course of action they plan to follow regarding the implementation, so that they can weed out the glitches in the plan. This way, the company cannot only work hard to improve on these obstacles and remove them as much as possible, but also so that the company can be prepared for any minor setbacks such obstacles would cause. These obstacles could take the form of people, ideals, beliefs, and traditional mindsets (Becerra-Fernandez & Sabherwal, 2010). Finally, the company can work on establishing short-term goals for itself, so that they can be treated as stepping-stones during the implementation. It is advisable for companies that are seeking to implement a change this huge, to follow these steps, and ease the company into transition, instead of taking giant steps spontaneously, which it may not be prepared or ready for. No matter how advantageous a strategy may be, it will always have a few costs associated with it. One such cost would be the financing it would take to provide the company with the computers, technology, devices, and software required to implement knowledge management within the company (Christensen, 2003). The second major cost that it would bring about would be the high cost of training and educating the employees, which would be a large investment that will help the company prosper greatly. The third cost could be an indirect one, which would be incurred because the company will be altering its culture. These costs would initially provide quite a few problems for the company, and they may be tempted to avoid such a change altogether (Stankosky, 2006). However, they should keep in mind that the costs and difficulty that will initially be associated with the implementation will be short-lived, and a small price to pay in return for the large return. Conclusion It should be apparent by the end of this paper that knowledge management is a much-needed tool in the competitive industries present today. It seems like the obvious question to ask is whether companies today will realize that they, like the hypothetical company, should implement knowledge management as soon as possible. However, the real question is that how soon will they realize this, and how soon will they make the effort of bringing about the implementation within themselves. This is an important question, because at the point the world is right now, there is no time too soon to embrace knowledge management. The amount of information present in this world will only grow with time, and will have exponentially increased by the end of the century. Thus is a wise decision to consider the implementation right away (Becerra-Fernandez & Sabherwal, 2010). References Award, E. M. (2004). Knowledge Management. Pearson Education India. Becerra-Fernandez, I., & Sabherwal, R. (2010). Knowledge Management: Systems and Processes. M.E. Sharpe. Christensen, P. H. (2003). Knowledge Management. Copenhagen Business School Press. Frappaolo, C. (2006). Knowledge management. John Wiley & Sons. Hubert, C. (2000). Knowledge Management. APQC. Keyes, J. (2006. Knowledge management, business intelligence, and content management: the IT practitioner's guide. Auerbach Publications. Nonaka, I. (2005). Knowledge Management. Routledge. Rollett, H. (2003). Knowledge Management. Springer. Stankosky, M. (2006). Creating the discipline of knowledge management: the latest in university research. Butterworth-Heinemann. Stary, C. (2007). Knowledge Management. World Scientific. Read More