In today's world of business competition, every organization is trying hard to find a way to be among the top and to have sustainable competitive advantage to survive in the industry. Various fields and disciplines have agreed in insisting that knowledge plays a key role in the definition, functioning and performance of firms (Placing knowledge, online)  . First and foremost, we must bear in mind that firms today are no longer viewed as machines of efficient transaction, bureaucratic order or labour abusement but they are now seen as repositories of knowledge, creativity and innovation (Placing knowledge, online). Fransman (1994)  , "interpreted this critical change as a shift from firms conceived as pure 'processors of information' to firms conceived as 'processors of knowledge'" (Placing knowledge, online). If the firms behave in a way that depends and reacts only to the market prices, the firms can be classified as 'processors of information' while if firms are seen as generating ideas, developing and applying knowledge, they can be categorised as 'processors of knowledge' (Placing knowledge, online).
Get your grade
or your money back
using our Essay Writing Service!
What is knowledge? Locke (1689)  defined knowledge as "the perception of agreement or disagreement of two ideas" (Knowledge, 2004)  . Based on this idea, Davenport and Prusak, (1998)  defined knowledge as "a fluid mix of framed experience, contextual information, values and expert insight that provides a framework for evaluating and incorporating new experiences and information"(Knowledge,2004). The first half of this definition provides 'content' of knowledge which includes number of things that we have within us, such as experiences, beliefs, values, how we feel, motivation and information (Knowledge,2004). The second half of the definition "that provides a framework for evaluating and incorporating new experiences and information" defines the function and purposes of knowledge and how it relates back to Locke's definition -we have within us a framework [one idea] that we use for evaluating new experiences [the second idea] (Knowledge,2004). What about knowledge management and knowledge management strategy?
From the introduction to "An open Discussion of Knowledge Management "by Brian (Bo) Newman (1991), he states that, "knowledge management is the collection of processes that govern the creation, dissemination and utilization of knowledge" (What is Knowledge Management, online)  . Based on a research written by Sanjay Kumar Singh (2008)  , he defines knowledge management as "a formal, directed process of figuring out what information a company has that could benefit others in the company, then devising ways of making it easily available". We can say that knowledge management is about how organisations utilise its assets (i.e. knowledge) so that benefits could be gained and used to gain competitive advantage. Knowledge management is such an ageless and broad topic, but why it still becomes a topic in today's organisation? (What is Knowledge Management, online) Whether we acknowledge them or not, knowledge management do effect the decisions we make and the actions we take, both of which are enabled by knowledge of some type (What is Knowledge Management, online). If that is the case, we need learn the processes involved, so that we could improve the decisions and actions taken (What is Knowledge Management, online).
In theory, there are different types of knowledge that firms need to know before they can effectively manage their knowledge to survive in the knowledge-based competition world. Knowledge management strategy that organisations choose is influenced by the type of knowledge that they possessed (Bloodgood & Salisbury, 2001)  . The main types of knowledge are 'explicit knowledge' and 'tacit knowledge' (Knowledge, 2004)  . Explicit knowledge is knowledge that can easily be expressed into language that we used every day (Knowledge, 2004). Explicit knowledge can be passed onto other people and its characteristics make it easy to be processed by computers, transmitted electronically or stored in databases (Knowledge, 2004). On the other hand, tacit knowledge is knowledge that is personal and is gained through experiences and involves intangible factors (Knowledge, 2004). Tacit knowledge is hard but not impossible to integrate with formal language and it must be converted into words, models or numbers that can be understood before it can be communicated (Knowledge, 2004). Thus, based on type of knowledge that the organisations possessed, they can start thinking about which strategy they could use to leverage their assets.
Always on Time
Marked to Standard
Knowledge creation, knowledge transfer and knowledge application are knowledge management strategies that organisations use to utilise their knowledge asset to gain and maintain competitive advantage (Bloodgood & Salisbury, 2001)  . Alavi & Tiwana (2002)  stated that "knowledge creation refers to the development of new knowledge through the interplay of tacit and explicit knowledge at different ontological levels". In simpler terms, organisations that use this strategy focus on generating, experimenting and exchanging new ideas within the assigned groups to construct new knowledge (Bloodgood & Salisbury, 2001). Social systems such as problem solving groups and project teams can encourage knowledge creation (Alavi & Tiwana, 2002). Knowledge creation strategy creates new knowledge based on ongoing experiences and uses the combination of existing and new knowledge to produce an updated knowledge for developing new products and services (Knowledge Creation, 2004)  .
Knowledge transfer can be regarded as spreading and sharing knowledge throughout the organization in an effort to utilize the knowledge to its fullest as rapidly as possible (Bloodgood & Salisbury, 2001). New knowledge, especially tacit knowledge will be explicated using this type of strategy (Alavi & Tiwana , 2002). Codification is a process of making tacit knowledge explicit and is facilitated by mechanisms that formalize and embed it in documents, software and systems (Alavi & Tiwana, 2002). When executing tasks, instructions are being written down, for example, a step by step recipe that a worker in a McDonalds can use to make a Big Mac represents the knowledge transfer (Alavi & Tiwana, 2002). As we all know, the higher the degree of implicitness in tacit knowledge, the harder it is to codify the knowledge (Alavi & Tiwana, 2002). This is when the use of information technology is helpful in codification of complex knowledge that are mainly developed to support them such as, decision support systems, expert systems, relational database tools and document management systems (Alavi & Tiwana, 2002).
The third strategy of knowledge management is knowledge application and this is where valuable assets of organisations are brought into the most challenging part. This is the most important stage in managing knowledge as value is created when knowledge disseminated throughout an organisation is transferred from its original place and implemented where it is required (Alavi & Tiwana, 2002). In simpler words, without knowledge application, knowledge creation and knowledge transfer only will not add value nor improve performance of organisations (Alavi & Tiwana, 2002). Once an early Islamic philosopher Abu Bakr said, "Without knowledge action is useless and knowledge without action is futile". This is to show that if we have the knowledge, we have to utilise them to the full extent. We will take a glance of an example: a global oil company has invested millions of dollars in the development of a web- based knowledge repository (Watts- Sussman, 1998)  . Though the repository contains the best practices, the most important lessons learned, and a host of principles, techniques and procedures, the knowledge repository is hardly used and this proves that the firm is not realizing the full value of its knowledge assets (Watts- Sussman, 1998). In contrast, we will look at how a company has fully utilised its knowledge assets that leads to consistent product innovations and profitability (Davenport & Prusak, 1997)  . 3M is a company which produced over 400 new products in 1996 and the CEO aimed to generate 10% of the revenue from the new products (Davenport & Prusak, 1997). For knowledge application purposes, 3M has invested significant amount of resources to employ, for instance, an on-line database of technical expertise, annual 3-day knowledge fair and researchers are given time to assess, experiment with, absorb and apply the technical knowledge (Davenport & Prusak, 1997). This is to prove that they has realized their knowledge assets to the fullest and this requires time, effort and money as it does not occur easily and effortlessly (Davenport & Prusak, 1997).
This Essay is
a Student's Work
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.Examples of our work
An article written by Bloodgood & Salisbury (2001)  stated that there are 3 strategies of knowledge management but instead of knowledge application, they use the term knowledge protection. Bloodgood & Salisbury (2001) stated that "This strategy focuses on maintaining knowledge in its original and constructive state [i.e. not losing it nor allowing it to become altered or obsolete] and keeping knowledge from unauthorized transfer to other organizations [i.e. using security and legal measures]". In broader terms, organizations which choose this strategy need to be aware of their precious assets from being transferred to other organizations to prevent imitations made by other organizations (Bloodgood & Salisbury, 2001).
Organisations could not employ all the strategies at once since the resources are limited, hence they should focus on the 'best' strategies under various situations (Bloodgood & Salisbury, 2001). The issue here is which strategy is the best strategy? Contradictions between strategies bring challenges to the organisations. Focussing too much on knowledge creation would mean little attention will be given to knowledge transfer and knowledge application (Bloodgood & Salisbury, 2001)  . Competitive advantage derived from knowledge creation will not be everlasting if inadequate effort is given to make the knowledge transferable and applicable throughout the organisations (Badaracco, 1991)  . There is a direct relationship between types of knowledge that organisations possessed and knowledge management strategy that they choose to employ (Bloodgood & Salisbury, 2001). When there are significant amounts of explicit knowledge, knowledge transfer will be the most preferred strategy (Bloodgood & Salisbury, 2001). Nonetheless, competitive advantage may not be everlasting because knowledge that is easily transferred within the firm is also easily transferred outside the organisations (Bloodgood & Salisbury,2001), hence making it difficult to protect (Krogh & Roos, 1996)  . On the other hand, organisations would prefer to employ knowledge protection strategy if there is high amount of tacit knowledge in an organisation because of the difficulty of copying this type of knowledge (Hall, 1992)  . However, this strategy could prevent knowledge being transferred to certain parts of organisations which would benefits from its use (Bloodgood & Salisbury,2001). The contradiction between knowledge transfer and knowledge protection give challenges to organisations to choose which strategy to employ since the resources are limited and this is when the help of an agile team is needed.
How to build an agile team in an organisation? Apart from contradictions between strategies, employees are the biggest challenge yet the most essential resources in organisations because they are the one who manages the organisations and determine the successfulness of an organisation. Humans are the hardest resources to handle but without them, who are going to decide which strategy to choose and how they are going to successfully implement the strategy. All assets and knowledge management strategies would be useless if organisations could not build a strong, powerful and cooperated team of employees. As a whole, knowledge management can gain amazing benefits to individuals and organizations if they are purposeful, concrete and action- oriented" (What is Knowledge Management, online)  .
What about roles of information technology in managing the knowledge? IT can be seen as embodying two general capabilities with respect to knowledge: codifying knowledge and creating networks (Hansen, Nohria & Tierney, 1999)  . As mentioned in the knowledge transfer, codifying knowledge is a process of making the tacit knowledge explicit while creating networks is a process involved in transferring the tacit knowledge while keeping its implicitness (Bloodgood & Salisbury, 2001). Creating networks can be done by for example, keeping tracks of people with particular expertise and enabling them to communicate rapidly, thus organisations can quickly contact them when needed (Bloodgood & Salisbury, 2001). Although IT can be used in all types of knowledge management, the congruence between the effects of IT on codifying knowledge and explicit knowledge makes it favourable by IT (Bloodgood & Salisbury, 2001). Organisations who codify their knowledge using IT to make them easier and quicker to disseminate throughout the organisations give organisations the advantage over their competitors who spread their knowledge more slowly (Bloodgood & Salisbury,2001). Apart from spreading throughout the organisations quicker, the explicated versions of tacit knowledge help in making the knowledge more visible to the organisations (Bloodgood & Salisbury, 2001). However, apart from the high cost of making the tacit knowledge explicit, codification of tacit knowledge abuses the primary benefit of tacit knowledge which is its inimitability (Bloodgood & Salisbury, 2001). Competitive advantage that is gained from rapid dissemination will be set off by easier imitation by competitors. Hence, codifying knowledge is preferable towards explicit knowledge rather than tacit knowledge and this is when creating networks is useful [i.e. transferring tacit knowledge while keeping its implicitness] (Bloodgood & Salisbury, 2001).
In conclusion, organisations who plan to gain everlasting, sustainable competitive advantage must value the knowledge they acquire and originally possessed to the best they could by managing the knowledge as effectively as possible.