Last updated: June 18, 2019
Topic: BusinessCompany
Sample donated:


Before introducing knowledge management , it is very necessary to first distinguish between data , information and knowledge .

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

Data: The numbers such as 100 or 10% or even people of age between 40-50 are completely are of no use to anyone if they are not related to anything.

Information relates to description, definition, or perspective (what, who, when, where). For Example if someone deposits an amount in a bank account then the data we can be understood that 100,000 is the principal amount, and 10% is the interest paid on that amount.

Knowledge is about strategy, practice, method, or approach (how).

Here in the same example use the information provided to me, I can evaluate that I will be earning $10 on my principal amount as an interest and at the end of one year I will have $110,000 in my account. This pattern represents knowledge, which I understand and it allows me to take decision regarding whether to deposit in the saving account or invest in the capital market.

Now, that you have understood what knowledge is, it wont be hard to understand what knowledge management is all about.

Knowledge Management :

Knowledge is a power, there is no comparison with knowledge, anyone who has the knowledge is considered as the genius. Using this logic, organizations have started knowledge management to help them compete with their competitors and survive

Knowledge management is therefore a concept related with organizations.

Definition of knowledge management:

It comprises of practices that are used by organizations in order to identify, represent and distribute knowledge.

Some definitions:

“…a discipline that promotes an integrated approach to identifying, managing and sharing all of an enterprise’s information assets. These information assets may include databases, documents, policies and procedures, as well as previously unarticulated expertise and experience resident in individual workers.” (Gartner Group Inc, October 1996)

Davenport and Prusak distinguish ‘knowledge’ from ‘information’, and information from ‘data’, on the basis of value-adding processes which transform raw material (for example, transaction records) into communicable messages (such as documents) and then into knowledge and other higher-order concepts. (For convenience, they include ‘wisdom’, ‘insight’, etc. in their working definition of organizational knowledge.) These value-adding processes include in the first instance contextualization, categorization, calculation, conversion and condensation; and in the second, connection, comparison, and conversation. Other commentators – notably Thomas Stewart – dismiss the notion of a data-to-wisdom hierarchy as bogus and unhelpful in this context, on the grounds that “one man’s knowledge is another man’s data”.




All organizations either big or small need information as well as knowledge to achieve their organizational objectives such as improved performance , competitive advantage innovation, lessons learnt transfer ( for example between different projects ) and the general development of collaborative practice . Some large companies have gone to such an extent that they have generated new roles in organizations in the form of Chief knowledge officer. In recent times, a practice called Personal Knowledge management (PKM) has emerged in which individuals apply KM practice to themselves, their roles and their career development. (Kuntz and Matta, 2002)

Why Knowledge Management has become such an important part of organizations today?

The Value of Knowledge Management
1.      Knowledge management helps in Improving Customer Relations:

Customer relations can be improved when there is a deep knowledge of the customer, you know what will satisfy your customers and Understanding about their unmet needs can also identify new opportunities. This way you can propel ahead of your competition

2.      Knowledge management facilitate better and more informed decisions :

If the employees are well aware of the prevailed macro and micro environment of the organization then they can make better decisions as compare to when they don’t know anything.



3.      Knowledge Management contributes to the intellectual capital of an organization;

This means with the increase of knowledge in the organizations, the intangible asset worth increases.

4.      Knowledge Management encourages the free flow of ideas which leads to insight and innovation.

Knowledge management can bring in on-the-job peer discussions, formal apprenticeship, discussion forums, corporate libraries, professional training and mentoring programs that can contribute on the generation of ideas.

5.      Knowledge Management eliminates redundant processes, streamlines operations, and enhances employee retention rates.

Knowledge management saves cost for the organization , for example if an employee does not know anything about the job he/she is performing then attainment of knowledge can help understand the job .This way the employee will stop doing useless operations and automatically all the redundant operations will be stopped .

6.      Leads to greater productivity.

As mentioned in the above point, when knowledge is transferred to the employee, he is motivated towards the job which leads in increase of productivity.


Example: This Example will show why knowledge management is necessary for an organization. .

If a question is asked from the managers that will the sales of the company remain the same in the next quarter also? He will say “It depends”, he will have to say this because although he has the data and information but he doesn’t have the knowledge. He can only answer the sales question if he has the complete information about the prevailing competition in the market, consumer taste, market size, and a whole host of other material is available to him. Through a complete analysis of the data he will be able to understand the pattern, and that is how he will have the knowledge to estimate the sales for the next quarter.

How Knowledge management is implemented in Organizations :

Organizations have a vast amount of data and information but a proper arrangement and utilization of those data and information can be a tedious and expensive task. Once data and information is properly management, knowledge can be obtained easily. Companies who implements knowledge management are supposed to do the following things:

·         Knowledge databases and repositories (explicit knowledge) –making sure that the information and documents that can be shared and re-used are stored properly. Examples include customer data, research reports and price lists.

·         Knowledge route maps and directories (tacit and explicit knowledge) –storing data, information and documents that can be consulted later. Example includes competency profiles  and yellow pages

·         Knowledge networks and discussions (tacit knowledge) – Building an environment within the organization that gives opportunities for a face to face contacts and electronic interaction. Talk rooms and holding ‘best practices ’sessions are examples of knowledge networks and discussions that the company should initiate in order to use knowledge management concept.

It is important that organizations should not only concentrate on using IT infrastructure and organization wide communication facilities but they should try to build a culture within the organization that encourages teamwork and trust. Teamwork and trust is considered as the most important instruments to ensuring successful knowledge management.

There are some cases where the project involves establishing a central physical presence, Ernst and Young followed this logic when they setup a Centre for Business Knowledge (they replace a corporate library to implement Knowledge management functions ).It was only because of  Knowledge management functions that took companies like Netscape and Formula One to multi-million dollar corporations in just a few years . (Liebowitz , 1999)

Examples of how companies are using knowledge management :

·   . Using Knowledge Management to Improve Customer Relations

We all know that through building trust we can have clients making repeated purchases of your products and remain loyal to us.

Below are a few areas in which managing your knowledge can help improve customer relations and services.


·          Sun Microsystems implement such a system which gave every employee an                           opportunity to add information in the databases, this helped them bringing out a                        complete picture of the customer and their needs.

·          Other companies are even using knowledge management functions in order to     obtain information about their customers. This helps them bring new products and         services that the customer needs. Through this they are proving the customers that they come first.

Using knowledge management tools employees can feed in even the smallest      complaint they received about the companies products, reviewing the complaints       once in a while can tell where improvement is needed in the processes.

·         Using Knowledge Management in improving Business Environment Insights:

Some companies have evolved a virtual library that delivers market updates, patent       information and a wealth of externally sourced material to the desk tops of its     research scientists. Example of a company is Smith Kline Becham

·         Using Knowledge Management to improving Knowledge in People:

Companies Converting to Technologies have learning networks, where people from        across       the organization pool, update and develop their expertise in key technologies       such as laminating and printing.


Steps in implementing Knowledge Management with in an organization

Implementing these steps will help ensure success for the company..

1. First, you need to be motivated and inspired by this new process – getting to know that knowledge management is a part of the organization and its good for everyone , the employees , employers and the customer.

2. Get closer to your customer – Knowledge is Power – The more you know about your customers the better you will be able to serve them and get close with them.

3. Give your teams permission to explore the new process – The team should be given time to explore and be familiarize with the process. A one day visit of the whole organization can help them get knowledge from across the organization because as you visit different parts of the organization you will be interacting with a lot of people, which can help in the flow of data, information and ideas.

4. Provide your people with the technical resources – IT resources serves as an important part in implementing a Knowledge management environment.

5. Built knowledge networks –Creating a network where employees can communication among themselves. This can also be term as human database.

6. Integrate your knowledge sharing work with your business strategy – Through knowledge you can make more informed and profitable decisions, a decision without a complete data can be very dangerous for the organization.

It should be kept in mind that implementing a knowledge management program not only benefits the whole organization but also the customers. Through Knowledge management program employees becomes motivated and customer becomes satisfied and loyal . (Gorelick , April , and Milton , 2004)


Knowledge management is the empowerment for an informed organization .Being able to  the collectively share the intellect and the experiences of the working people of the organization can give an advantage over the organization’s rivals .Knowledge and other forms of programs are the ‘hidden Assets’ of any organization . These assets although do not appear in the balance sheet yet they create a value and can be used to predict future earning of any organization.


















Liebowitz , Jay (1999). Knowledge Management Handbook . CRC.
Allee, Verna (1997). The Knowledge Evolution: Expanding Organizational Intelligence. Butterworth-Heinemann.
Mertins, Kai , Heisig , Peter, & Vorbeck , Jens (2003). Knowledge Management: Concepts and Best Practices. Springer.
Kuntz , Rose Dieng, & Matta, Nada (2002). Knowledge Management and Organizational Memories.Springer.
Gorelick , Carol , April, Kurt , & Milton , Ph.D., Nick (2004). Performance Through Learning: Knowledge Management in Practice (Improving Human Performance) . Butterworth-Heinemann.























Organizational Knowledge Management


Knowledge management has recently emerged as one of the most discussed and followed through trends among major organizations and corporations. In the changing aspect of management, the management styles have also undergone fundamental changes coming on the heel of globalization, Internet revolution and new communication technologies. The business space has considerably expanded and it has brought considerable changes in the basics of business management. There is a wealth of information that is being generated every day and across all the business verticals and  modern management gurus have started to appreciate the necessity of managing this information and apply it to create knowledge based economy and knowledge incentive business environment (Ives, Torrey, and Gordon, 1998).

Knowledge and Knowledge management in Organization

Knowledge is defined as processed information, one that holds its meaning and application while defining its own context and determining its own application. Knowledge has become central to entire gamut of business and corporate activities. It plays crucial role from taking of operational decisions to devising future range of strategies, corporations rely overwhelmingly on knowledge and timely utilization (Wong and  Aspinwall). The modern management ethics have led to development of understanding on knowledge philosophy and ethics. Organization have well understood that whereas tangible assets such as labor, capital and resources provide the means of a successful business venture, they are available for ever one while it’s the strategic asset of knowledge that guarantees corporations their unique place and comparative advantage in the fiercely competitive business world. Knowledge is critical  for organizations because it completely satisfies four vital criteria of being rare, valuable, inimitable and non-substitutable (Bollinger & Smith, 2001). The general feeling among   managers and executives agrees to the point  that their organization’s strategic policies, their capability to successfully plan and execute strategy, fundamentally based on the knowledge of their organization’s workforce and complete awareness of their own potentials (Parikh, 2001)

At the organizational level, knowledge is universally classified as tacit and explicit (Hack, 2005). Explicit Knowledge is circulated, documented and classified and hence easy to comprehend. On the other side, tacit knowledge represents knowledge that is present but hidden. This knowledge may be dormant or active and it exclusively benefits the possessor of the knowledge alone with limited organizational utility or benefit. The real challenge of the Knowledge Management consists in bringing the tacit knowledge available for the benefit for the whole organization and arrange the explicit knowledge so that its benefits can be utilized on the maximum scale (Horwitch & Armacost, 2002).

Assessing knowledge from operational viewpoints,  there are three important  categories of this knowledge, which bear crucial significance on  the organization’s capacity and performance (Skyrme and Amidon, 1997):

(1)                          Static knowledge. It is the unchanging knowledge present in forms of  facts and information, existing in the system and open for any one to discover and use it

(2)                          Dynamic knowledge. It consists of  the changeable facts, information, perception, and at times intelligent speculations based on knowledge of the system. Dynamic knowledge is user dependent , it is tacit in nature, it varies from person to person and contains many possible allusions to same set of facts but with different interpretation.

(3)                          Static or dynamic knowledge. It is the real application of the knowledge system where both static and dynamic knowledge are utilized in actual business world to interact with the world.

Knowledge Management Strategy

For an organization looking for efficiency, competitive advantage and through  knowledge management, the  identification and classification of the range of knowledge that organization attaches importance and deems valuable for its future prospects becomes the foremost consideration. The strategy towards this step is a combination of four correlated phases as explained in Figure 1 (Bhatt, 2001)
Figure 1 shows the basic strategy employed to create a knowledge oriented organization.

(Figure 1)

Knowledge Creation: Knowledge Creation refers to the process where an organization, exploring through its background and foreground information pools, is able to create novel concepts and innovative ideas that have resource value for the organization (Bhatt, 2001). Knowledge Creation is an elaborate process, which takes place at all the levels of organization in some fundamental forms. It comprises activities that range form individual motivation, resourcefulness and personal attributes to institutional practices such as research and development, technological assessment and strategic evaluation.

Knowledge Validation: Knowledge validation is a an exhaustive process. It requires the selection and identification of most germane knowledge aspects, out of a vast knowledge system, that are applicable to organization’s visions. It is the nature of knowledge to get obsolete and out of context with time. The obsolete knowledge may retard the development of an organization and cause it to loose pace with rapid changes taking place in the outside business world (Nonaka and Takeuchi, 1995).  Knowledge Validation filters the redundant and out of context knowledge through a carefully constructed process of continuous monitoring, testing, refining and synchronizing.

Knowledge Presentation: Knowledge creation and validation are the background processes ensures the foreground process of knowledge presentation where knowledge is displayed and made available for employees. The structure of knowledge availability hardly conforms to a single standard within any organization. There are a number of mediums where knowledge is stored, such as papers, hard disks and optical disks. Further, the categorization and perception of knowledge varies across various departments within the organization. Many processes may yet be working on outdated knowledge streams and using data formats that is incompatible with rest of the organization. Knowledge presentations aims to iron out these differences by standardizing the knowledge presentation schemes for quick integration and grasping.

Knowledge Distribution: Effective knowledge distribution is a key determining factor of pace and flexibility with which a organization works. Open door policies, employee empowerment and interactive and integrative organizational structure helps in efficient flow of cross-departmental knowledge flow.

Knowledge Application: Knowledge application is the final aim of any knowledge management initiative or activity. The knowledge that is laboriously created, identified, presented and distributed need to applied to organizational procedure to make it functional and useful. Results of knowledge application should be visible effectively in company’s performance, quality of its services, level of customer and employee satisfaction and eventually in its growth and market position.

Challenges before a Knowledge Manager

Although the theoretical framework of knowledge management is well structured, managers have often faced practical challenges in implementing the knowledge system and working on resolving the challenges that come in the process. Some of the major challenges and responsibilities  faced by knowledge managers are (Jarrar,2002)

1.      Best ways to organize a knowledge repository structure

2.      Finding the most suitable mechanism for effective knowledge management from company resource pool to employees and from individual employees to company resource pool

3.      Maintenance of an effective Knowledge Management system

Technology, Business Strategy and Knowledge Management

Knowledge management is a new process, that relies heavily on use of emergent technology to systematically arrange, sort and identify relevant information and provide it when required. A highly sophisticated and developed computer and communication technology to analyze and assort the huge pool of information to create knowledge while continuously monitoring and updating the process, is the foundation of modern knowledge management system. As a result, in every organization knowledge management is associated with Information Technology where data is turned into information and information is used to create knowledge pool.

. The Knowledge SWOT analysis of industry explicitly shows that knowledge, as a unique resource, requires skilled management initiative in combining and coordinating it with other traditional resources of labor and capital. Moreover, whereas labor and capital are exhaustible resources, knowledge is permanent and a sustainable resource. Knowledge Management is not just about methods of sorting information and organizing facts. It is a multi-dimensional activity that involves tactful distribution of information to empower employees and develop core competency in them to tackle responsibilities at individual and group level. Application of knowledge management implies a complete transformation of company at fundamental levels of understanding its business, its employees and its customers while incorporating human dimension in its strategic decisions. This change in business strategy from mechanical to human-interactive system is the central feature of knowledge management that brings competitive advantage for organizations.





















Ives, W. Torrey, W, and Gordon, C. 1998. Knowledge Management: An Emerging Discipline with Long History. Journal of Knowledge Management.

Call, D. 2005. Knowledge Management-Not a Rocket Science. Journal of Knowledge Management.

Wong, KY and Aspinwall, E. 2006. Development of a knowledge management initiative and system: A case study. Expert Systems with Applications. Bollinger, A. S., & Smith, R. D. (2001). Managing organizational knowledge as a strategic asset. Journal of Knowledge Management, 5(1), 8–18.

Hack, MH (2005). A Strategic Pretext for Knowledge Management

Horwitch, M., & Armacost, R. (2002). Helping knowledge management be all it can be. Journal of Business Strategy, 23(3), 26–3

Parikh, M. (2001). Knowledge management framework for high-tech research and development. Engineering Management Journal, 13(3), 27–34

Bhatt, G. (2001)Knowledge management in organizations: examining the interaction between technologies, techniques, and people. Journal of Knowledge Management.

Skyrme, D., & Amidon, D. (1997). The knowledge agenda. Journal of

Knowledge Management, 1(1), 27–37.

Pierre A. Balthazard Robert A. Cooke. Organizational Culture and Knowledge Management Success:

Assessing The Behavior–Performance Continuum. Proceedings of the 37th Hawaii International Conference on System Sciences – 2004

Schein, E. H. (1996). “Culture: the missing concept in organization studies.” Administrative Science Quarterly, 41, 229-240.

Stan Oliver and Kondal Reddy Kandadi. 2006. How to develop knowledge culture in organizations? A multiple case study of large distributed organizations.  JOURNAL OF KNOWLEDGE MANAGEMENT j VOL. 10 NO. 4

Nonaka, I. and Takeuchi, H. (1995), The Knowledge  Creating Company ± How Japanese Companies  Create the Dynamics of Innovation, Oxford University Press, Oxford.

Jarrar, Y. F. (2002). Knowledge management: Learning for organizational experience. Managerial Auditing Journal, 17(6), 322–328. Skyrme, D., & Amidon, D. (1997).