Knowledge Management and Organisation Learning - Essay Example

Modern business history lists a number of instances when knowledge-centred management has helped create competitive advantage of organisations and even countries formerly limited in financial and other resources. For Microsoft, Dell, IBM (which is believed to be one of the founders of the paradigm), Compaq, British Airways, Ryan Air and other major organisations knowledge management has become the cornerstone of success. The same is true for such countries as South Korea, Singapore, Malaysia and Hong Kong which rely on the national knowledge economy.

Over the last two decades, organizations have often been described in terms of knowledge and learning with the help of such concepts as "learning organisation", "intellectual capital", "people-centred approach" or "knowledge based management". Cakar and Bititci (2001) perfectly summarise this trend in the following statement: "1980s were all about automation. In the manufacturing industry FMS, FAS, Robots, AGV'S etc. were commonplace. The 1990s have been about people, this is evident in the development of concepts throughout the 90's focusing on delegation, involvement, ownership cross functional teamwork, self managed works teams and so on The needs of modern business emphasize the role and importance of people and knowledge" (p.2). Also the idea of knowledge management appeared requested in 1990s the concept itself dates back early 1960s.

Its advent is associated with classic works of Peter Drucker w. Drucker found out that on 1960s, He called this new era an informational one (Drucker, 1994). The ideas of Peter Drucker (1994), whom was the first to use term 'knowledge worker', became widely recognised in 1980s when a number of followers supported his idea that investments in human resources were increasingly becoming more cost-efficient than investments in machines. In 1986, European knowledge management pioneer Karl-Erik Sveiby described the concept of a "know-how company" (Doz, Santos & Williamson, 2001), and in 1991 the ideas of knowledge management were reconsidered by Ikujiro Nonako whom presented the idea of "knowledge-creating company".

The 1996 could be considered the turning point in history of knowledge management: the influence of this paradigm became overwhelming in absolute majority of the developed countries (Skyrme, 2002). The ideas and concepts related to knowledge managements were successfully applied in the oil, pharmaceutical, high technology, financial, and other industries. Main BodyKnowledge management is a new form of management which helps organizational adaptation, survival and competence in face of increasingly discontinuous environmental change.

This broader perspective incorporates the processes of knowledge use, knowledge creation, knowledge sharing, knowledge transfer and knowledge renewal (Malhotra, 1998). Therefore, knowledge management is commonly defined as "the explicit and systematic management of vital knowledge and its associated processes of creating, gathering, organizing, diffusion, use and exploitation, in pursuit of