Knowledge Management – An Effective Management Tool

Knowledge Management – An Effective Management Tool

For centuries, scientists, philosophers and intelligent persons have been concerned about creating, acquiring, and communicating knowledge and improving the re-utilization of knowledge. However, it is only in the later period of the 20th century that a distinct field of ‘knowledge management’ has emerged. Further, knowledge is always being considered as power, but mere knowledge is not power, it is only a possibility. In fact, action is power and its highest manifestation is when it is directed by knowledge.

In the present day environment, the organizations are fundamentally dissimilar when compared with the organizations of the past because of a large amount of technological development which has taken place in the recent past. The speed of the technological development has resulted into a prospect for forming and propagating of new forms of knowledge from every corner of the organization. In the present day scenario, knowledge has become a significant foundation of competitive advantage. Today, knowledge has been recognized as one of the most important assets, and knowledge management in any organization is crucial for the organizational success.

In the present day scenario, the new source of wealth is knowledge, and not the workforce, land, or financial capital. Knowledge is the intangible and intellectual asset. The key challenge of the knowledge-based economy today is to promote innovation. Knowledge is viewed today as an evolving mix of framed experience, values, contextual information, and expert insight which provides a framework for evaluating and incorporating new experiences and information. It has been established that in the organizations, knowledge is frequently found to be embedded in documents or repositories and in organizational routines, processes, practices, and norms. However, in order for knowledge to have value, it is to include the human additions of context, experience, and interpretation.

Knowledge is recognized as the primary organizational resource in the 21st century, which is able to bring sustainable competitive advantage in the long term. The move from an industrially-based economy to knowledge based economy in the 21st century needs a top-notch knowledge management system for securing a competitive edge for the organization and a capacity for learning. From the management perspective, the key difference between information and knowledge is that information is much more easily identified, organized and distributed. Knowledge, on the other hand, cannot really be managed because it resides in people’s mind.

The value of knowledge is derived from the value of the decisions with which it is associated. The measurement of the knowledge management success is hence related to the improved decision making and the achievement of the objectives. Some measures can be objective while the others can be more subjective. Knowledge management is thus consists of making better decisions by understanding the knowledge ingredients for decision making. In other words the knowledge, on a personal level, can be what the people want it to be. For an organization, knowledge is what the employees need for taking decisions and actions. Knowledge is found in people, processes and information, where information includes images and all forms of multi-media. For understanding the development of knowledge, the knowledge spiral is a very effective starting point.

Unlike the conventional material assets, which decrease as they are used, knowledge asset increases with use. Ideas breed new ideas, and shared knowledge stays with the giver while it enriches the receiver.

Organizations create a great amount of data and information (knowledge) in their daily operational activities. It is essential for the organization to have a system of managing the newly created knowledge so it can be reused to solve new problems or can be leveraged to value-add to other operational activities. One of the advantages of knowledge is that knowledge is dynamic. It can be adapted and evolved through the processes of learning and sharing. The impact made by individual knowledge is not as great as collective knowledge so sharing within the organization is always helpful which needs encouragement.

Due to its intangible nature and directly related to the human mind, it is difficult to precisely define knowledge. The terms ‘knowledge’ and ‘information’ are frequently used inter-changeably, however, it is useful to distinguish them. The chain of knowledge is a flow consisting of data-information-realization-action / reflection-wisdom (Fig 1). Hence, knowledge is developed through an evolutionary cycle. From the observation and data, the organization begins a process of learning in which from structured data it attains the particular knowledge, i.e., belonging to an individual or group of individuals. This process ends with the gain of wisdom by the individual, who grows with experience. At the same time, it starts the process of routine, which begins with data about a specific context of a given organization, and then the practice reaches a certain task.

Fig 1 Stages and evaluation of the knowledge dimension

Knowledge is intangible, dynamic, and difficult to measure, but without it, no organization can survive. The knowledge can be broadly classified into two types namely (i) tacit or implicit knowledge and (ii) explicit knowledge (Fig 2). Tacit or implicit knowledge is highly invisible and confined in the mind of the people. It is difficult to formalize and hence not easy to communicate. Explicit knowledge, on the other hand,  is formal and systematic which can be easily communicated and shared as in the form of product specifications, scientific formulae, systems, methods, and literature or computer programs.

Fig 2 Types of knowledge

The word tacit means understood and implied without being stated. The tacit knowledge is unique and it cannot explain clearly. Tacit knowledge is the knowledge that the people possess and which is difficult to express. Tacit knowledge is personal and it varies depending upon the education, attitude and perception of the individual. It is an unarticulated knowledge and is more personal, experiential, context specific, and hard to formalize. It is difficult to communicate or share with others and is normally present in the heads of the people and the teams. It is also impossible to articulate because sometimes the tacit knowledge can be even available in sub-conscious mind. This type of knowledge is also subjective in character. The cognitive skills of an employee are a classic example of tacit knowledge.

The word explicit means a thing which is stated clearly and in detail without any room for confusion. The explicit knowledge is referred as a formal knowledge which can be packed as information. This type of knowledge can be found in the organization in the form of reports, articles, manuals, patents, pictures, images, videos, sound recordings, and software etc., which have been created with the goal of communicating with other persons. Explicit knowledge defines the identity, the competencies and the intellectual assets of the organization independently of its employees. Hence, it is the organizational knowledge par excellence, but it can grow and sustain itself only through an affluent background of tacit knowledge. The explicit knowledge is easy to articulate and it is not subjective. This type of knowledge is also not unique and it does not differ with individuals. It is impersonal. The explicit knowledge is easy to share with others. It can easily be written down and codified.

Transformation of knowledge from tacit to explicit form increases its usability and visibility. Capture of the tacit knowledge of the people which resides within them in the form of knowhow and insights is a difficult and challenging process. Tacit knowledge can be transferred through mechanisms of socialization, mentorships, apprenticeships, and face-to-face communication. Process of knowledge transformation is shown in Fig 3. Since knowledge can be the organization’s only sustainable competitive advantage, it is very important to capture tacit knowledge. Intranets and e-mails help the flow of the knowledge through the organization. Tacit knowledge frequently moves laterally through informal channels of communication (communities of practice). The information which is passed in this way is very important since it is useful for helping people to get their work done more effectively, in part, because nobody is willing to question or think about it very much. Communities of practice are required to have their place in a comprehensive knowledge management effort.

Fig 3 Process of knowledge transformation

Knowledge management is the activity which is being practiced by several organizations all over the world. In the process of knowledge management, the organizations comprehensively gather information by using numerous methods and tools. The gathered information is then organized, stored, shared, and analyzed using defined techniques. The analysis of such information is done based on resources, documents, people, and their skills. Properly analyzed information is then stored as ‘knowledge’ of the organization. This knowledge is later used for activities such as organizational decision making and training new employees etc.

The effective implementation of knowledge management is directly related to the change management. Knowledge management is the basis for, and the driver of, the post industrial economy since it is the result of learning which provides the only sustainable competitive advantage. It is also the principal factor which makes personal, organizational, and societal intelligent behaviour possible.

Knowledge management is unfortunately a misleading term since knowledge resides in people’s heads and managing it is not really possible or desirable. The ideas behind knowledge management are all about, is to establish an environment in which people are encouraged to create, learn, share, and use knowledge together for the benefit of the organization, the organizational employees, and the organizational customers. Knowledge management is a range of strategies and practices used in the organization to identify, create, represent, distribute and enable adoption of insights and experiences. It is the collection of the processes which govern the creation, dissemination, and utilization of knowledge. It is the management of the organization towards the continuous renewal of the organizational knowledge base.

Knowledge management is not a new idea. In fact, organizations have been managing ‘human resources’ since a long time. What is new about the knowledge management is the focus on the knowledge. This focus is being driven by the accelerated rate of change in the organizations of the present day and in society as a whole. Knowledge management recognizes that today nearly all jobs involve ‘knowledge work’ and so all the employees are ‘knowledge workers’ to some degree or another. This means that their job depends more on their knowledge than their manual skills. This also means that creating, sharing and using knowledge are among the most important activities of nearly every employee in the organization.

Knowledge is the insights, understandings and practical know-how possessed by the employees. It is the fundamental resource which allows the employees to function intelligently. Management of knowledge means thinking of knowledge as a resource. Some of these resources can justify the description as ‘intellectual capital’.

Knowledge management is the systematic management of the organizational knowledge assets for creating value and meeting tactical and strategic requirements. It consists of the initiatives, processes, strategies, and systems which sustain and enhance the storage, assessment, sharing, refinement, and creation of knowledge.  Every organization is to define knowledge management in terms of its goal and objectives. Knowledge management is all about applying knowledge in new, previously overburdened or novel situations.

Knowledge management is based on the idea that the most valuable resource of the organization is the knowledge of its people. Hence, the extent to which the organization performs well depends, among other things, on how effectively its employees can create new knowledge, share knowledge around the organization, and use that knowledge to best effect.  Many of the available tools, techniques, and the processes of the knowledge management actually make a great deal of common sense, which are already part of what the employees do, and can greatly help them in their job. In fact, many of the employees simply do not think in terms of managing knowledge, but they all do it. All the employees have a personal store of knowledge with training, experiences, and informal networks of friends and colleagues, whom they seek out when they want to solve a problem or explore an opportunity. Essentially, the employees get things done and succeed by knowing an answer or knowing someone who does.

Fundamentally, knowledge management is about applying the collective knowledge of the entire work force to achieve specific organizational goals. The aim of the knowledge management is not necessarily to manage all the knowledge, but just that knowledge which is most important to the organization. It is about ensuring that the employees have the knowledge they need, where they need it, and when they need it i.e. the right knowledge, in the right place, at the right time.

It is a known fact that knowledge management is one of the principal means of achieving competitive advantage. The organization needs to process knowledge in order to promote the strategy, and the knowledge management is the technique responsible for such processing. There are normally different approaches for this technique of knowledge management.

Knowledge management is hence a conscious strategy for an organization for getting the right knowledge to the right people at the right time and helping people share and put information into action in ways which strive to improve organizational performance. Knowledge management is essentially limited to creating the right conditions for individuals to learn (using information and experiencing) and apply their knowledge for the benefit of the organization.=

Knowledge management expresses a deliberate, systematic and synchronized approach to ensure the full utilization of the organizational knowledge base, paired with the potential of individual skills, competencies, thoughts, innovations, and ideas to create a more efficient and effective organization. It is the deliberate and systematic collaboration of the organizational employees, technology, processes, style and structure in order to add value through reuse and innovation. In simple words, knowledge management incorporates both ‘holding and storing’ of the knowledge perspective, with respect to the intellectual assets.

Knowledge management is a systematic process for acquiring, organizing, sustaining, applying, sharing, and renewing both tacit and explicit knowledge to enhance the organizational performance, increase organizational adaptability, increase values of existing products and services, and / or create new knowledge-intensive products, processes and services. It is the process of developing knowledge and accumulating it in the organizational capital wherever possible.

Knowledge management is the process of making relevant information available quickly and easily for the people to use productively. For knowledge management to move from ideas to implementation, the definition of the knowledge management requires to address (i) creating, sharing, and reusing knowledge, (ii) understanding the relevance of different information as determined by the customer,(iii) training for knowledge management methods and services, (iv) incorporating cultural aspects of knowledge management into operations, and (v) responding to funding and chargeback issues. Fig 4 shows the process of the knowledge management.

Fig 4 Process of knowledge management

Knowledge management is presently seen as a continuous cycle consisting of three processes namely (i) knowledge creation and improvement, (ii) knowledge distribution and circulation, and (iii) knowledge addition and application. It is essentially about facilitating the processes by which knowledge is created, shared and used in the organization. It is not about setting up a new department or getting in a new computer system. It is about making small changes to the way the employees in the organization work. There are several ways of looking at knowledge management and different organizations take different approaches. Normally speaking and creating a knowledge environment generally needs changing of organizational values and culture, changing of employees’ behaviours and work patterns, and providing the employees with easy access to each other and to relevant information resources. The essentials of the knowledge management cycle are given in Fig 5.

Fig 5 Essentials of the knowledge management cycle

In terms of how this is done, the processes of knowledge management are many and varied. As knowledge management is a relatively new concept, organizations are still finding their ways and so there is no single agreed way forward or best practice. This is a time of much trial and error. Similarly, to simply copy the practices of another organization does not probably work since each organization faces a different set of knowledge management issues and challenges. Knowledge management is essentially about employees, how they create, share and use knowledge, and hence no knowledge management tool works if it is not applied in a manner which is sensitive to the ways the employees think and behave.

There are of course a large number of options available in terms of tools and techniques, many of which are not new. Many of the processes which presently fall under the banner of knowledge management have been around for a long time but as part of functions such as training, human resource management, internal communication, information technology, librarianship, records management, and marketing to name a few. Some of these processes can be very simple, such as (i) providing induction packs full of ‘know how’ to new employees, (ii) conducting exit interviews when the employees leave so that their knowledge is not lost to the organization, (iii) creating databases of all publications produced by the organization so that the employees can access them, (iv) providing ongoing learning so that employees can constantly update their knowledge, (v) encouraging the employees with a common interest to network with each other, (vi) creating electronic filing systems which can be searched in a number of ways, making the information much easier to find, (vii) redesigning places of work based on the open plan so that the employees are more visible and talk to each other more, (viii) putting employees directories online so that the employees can easily find out who does what and where they are, and (ix) creating intranets so that the employees can access all kinds of organizational information and knowledge which otherwise normally take a great deal of time and energy to find.

Historically, knowledge has always been managed, at least implicitly. However, effective and active knowledge management requires new perspectives and techniques and touches on almost all facets of the organization. Knowledge management in the organization is to be considered from the following three perspectives.

  • Business perspective – It focuses on why, where, and to what extent the organization is to invest in or exploit knowledge. Strategies, products and services, alliances, acquisitions, or divestments are to be considered from knowledge related points of view.
  • Management perspective – It focuses on determining, organizing, directing, facilitating, and monitoring knowledge related practices and activities which are required to achieve the desired organizational strategies and objectives.
  • Hands-on operational perspective – It focuses on applying the expertise to conduct explicit knowledge related work and task

The process of knowledge management is universal for any organization. However the resources used, such as tools and techniques, can vary to suit to the environment of the organization. Knowledge management requires a mix of technical, organizational and interpersonal skills. The mix and emphasis varies according to responsibilities, but everyone involved is to be able to understand the operation, communicate effectively, and have at least basic competence in handling information. The knowledge management process has six basic steps assisted by different tools and techniques (Fig 6). When these steps are followed sequentially, the data transforms into knowledge. These basic six steps in knowledge management are described below.

  • Collecting – This is the most important step of the knowledge management process. If data collected is incorrect or irrelevant then the resulting knowledge cannot be accurate. The decisions made based on such knowledge can be inaccurate as well. There are many methods and tools used for data collection. First of all, data collection needs to have a procedure. This procedure is to be properly documented and followed by people involved in data collection process. The data collection procedure defines the data collection points, the data extraction techniques and tools. In addition to the data collection points and extraction mechanism, data storage is also defined in this step. Majority of the organizations now use a software database application for this purpose.
  • Organizing – The data collected need to be organized. This organization is normally carried out based on certain rules. These rules are defined by the organization. The proper organization of collected data helps to maintain data accurately within a data base. If there is a large quantity of data in the data base, techniques such as ‘normalization’ can be used for organizing and reducing the duplication. This way, data is logically arranged and related to one another for easy retrieval. When data passes the organizing step, it becomes information.
  • Summarizing – In this step, the information is summarized in order to take the essence of it. The lengthy information is presented in tabular form or graphical format and stored appropriately. For summarizing, there are several tools which can be used such as software packages, charts (Pareto, cause and effect diagram etc) and various other techniques.
  • Analyzing – At this stage, the information is analyzed in order to find the relationships, redundancies and patterns. An expert or expert team is to be assigned for this purpose as the experience of the person / team plays a vital role. Normally, there are reports created after analysis of the information. This is the stage where tacit knowledge is converted into explicit knowledge and is very critical to the success. Without documenting and codifying the tacit knowledge, its transfer for the purpose of learning and utilization, both internally and externally, is difficult to achieve.
  • Synthesizing – At this point, information becomes knowledge. The results of analysis are combined together to derive various concepts and artifacts. A pattern or behaviour of one entity can be applied to explain another and collectively, the organization needs to have a set of knowledge elements which can be used across the organization. This knowledge is then stored in the organizational knowledge base for further use. Normally, the knowledge base is a software implementation which can be accessed from anywhere through the internet.
  • Decision making – At this stage, the knowledge is used for decision making. The process of decision making gets accelerated and the decisions can be taken with high accuracy.

Fig 6 Basic steps in knowledge management

Organizations can find that they cannot meet their knowledge requirement from the available knowledge assets. In that case the gap is to be filled either by internally developing new knowledge or acquiring the knowledge from external sources. Knowledge creation can only be achieved in a creative environment which encourages teamwork and the use of creative potential. If manage successfully, the process can expand or change the organizational knowledge base to meet the current and future needs of the organization.

It is not unusual for organizations to not know how to generate value from the use of the knowledge assets they have. It is worse when the organization does not even know the kind of knowledge it has. Knowledge management offers a management system for the organization to ensure that their knowledge assets when created are properly documented, and that the knowledge in different domain is productively shared within the organization.

When knowledge assets are documented and shared, knowledge utilization is facilitated. This is the stage in knowledge management where value creation is delivered. By harnessing knowledge from different knowledge domains and competencies across the organization, direct impacts to the goals and objectives of the organization can be achieved.

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