KNOWLEDGE MANAGEMENT

OVERVIEW First,

we discuss how knowledge has become such an important organizational asset and theseries of processes that transform data into useful knowledge.

Next, we describe the major types of systems for knowledge management. We conclude by discussing the steps thatcan be taken by managers to ensure knowledge management systems provide value forthe firm.

CONTENTS What is Knowledge Where does Knowledge come from Value of Knowledge Different forms of knowledge What is Knowledge Management Knowledge Management Model

WHAT IS KNOWLEDGE ?

Knowledge is both an individual attribute and a collective attribute of the firm.

Knowledge is a cognitive, even a physiological, event, that takes place inside peoples’ heads, but it is also stored in libraries and records; shared in lectures; and stored by firms in the form of business processes and employee know-how.

And it is thought that individuals move through different stages of knowledge such as,

Know what - the knowledge of facts;Know how - the understanding of processes;Know why - the recognition of how the process fits with others;

WHERE DOES KNOWLEDGE COME FROM?

Individuals acquire knowledge in number of different ways:

From education process; From experience of performing tasks; From informal knowledge

exchange(meetings/ brain storming); From formal knowledge exchange

(training/ coaching); From observation of others;

THE VALUE OF KNOWLEDGE

Knowledge is an Intangible Asset. Knowledge is not subject to the law of diminishing

returns as physical assets, but instead experiences network effects (law of expanding returns) as its value increases as more people use it.

It helps to gain competitive advantage.E.g. having a unique build-to-order production system or customer relationship management system constitutes a form of knowledge and can be a unique asset that other firms cannot copy easily.

DIFFERENT FORMS OF KNOWLEDGE

Knowledge can be either tacit or explicit;

Knowledge residing in the minds of employees that has not been documented is called tacit knowledge.

knowledge that has been documented is called explicit knowledge. Knowledge can reside in e-mail, voice mail, graphics, and unstructured documents as well as structured documents

e.g. details of purchases & sales from the transaction processing system through to information for strategic decision making stored in the EIS.