Knowledge Management Business Essay


This report is what I understand about knowledge and knowledge management, why it is very important and how knowledge management helps the managers in company. It is also "The value of effective knowledge management to the organization and on supporting managerial practices" in order to help us understanding clearly the importance of managing knowledge on the organization today.

In the discussion, I will analyze piecemeal to describe how effective the knowledge management affects the company. First, I will explain clearly what knowledge and knowledge management is. After that, I will show how many types of knowledge. Then I will tell why the knowledge management is important, what values are created, and how it affects to the individual and organization. Moreover, I will also explain what leadership and managerial skills are used to successfully implement knowledge management in the company. After all I will add some examples in order to make everything I said above become easier to understanding.


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1. What is knowledge and knowledge management?

2. Types of knowledge.

3. The Important of Knowledge management.

4. Knowledge management for individual and organization.

5. The skills required in managers.

6. Example about Knowledge management life cycle.



Knowledge is one of the most important things in the world which has the huge invisible power to make human society change rapidly and knowledge will never stop changing in order to help life and people developing more and more. The value of knowledge just cannot seem to recording or remembering, it also can be used by organizations try to manage knowledge from it has had until now to create new knowledge for company or for human life.

Besides, knowledge is considered as the main factor of business success and also is the key to help organizations improve their products, services and the way to get more customers and profits. Nowadays, so many famous companies such as Honda, Toyota, Apple, etc have been used knowledge management and have been successful with their own products. Of course, each company has its own knowledge which needs to be built, accumulated and shared by managers and staffs.


What is knowledge and knowledge management?


In general, knowledge is like the treasure of human from ancient till today. This knowledge is communicated and always develops. For example: when you start school, you are communicating knowledge. The higher of your school, the more you communicate knowledge increasing and more complex. And book is a tool to record and represent knowledge in all aspects of social life. People read books and take knowledge in book apply to their life, there by developing more knowledge. Besides, knowledge can be also acquired from TV, newspapers or Internet, or from many people around you such as friends, teachers, and other people who have many experienced.

On the other hand, in the developing world nowadays, there are so many definitions about knowledge. So, when we want to define knowledge, we should understand clearly what data, information and knowledge:

Data represents raw numbers or statements.

Information is a subset of data, only including those data which possess context, relevance, and purpose.

And knowledge is at the highest level in a hierarchy with information at the middle level, and data to be at the lowest level. [1] 

In summary, knowledge is what people accumulate in their lives, through education and life experience [2] . Knowledge is an integral part of your life. You must have knowledge to have the development for yourself and your company.

Knowledge management:

Until now, although there are many definitions of knowledge management in different thinking but anyway knowledge management is the process of identifying, capturing, organizing the intellectual assets [3] .

Not yet, knowledge management is creating knowledge, and it was followed with the express knowledge, disseminate, use knowledge, and maintain (store, preserve) and improve knowledge [4] . It is the process through which organization includes employees, partners and customers; know, and share information among employees, departments and even with other companies in an effort to make best decision. So knowledge management is very important for a company.

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Moreover, knowledge management is not information technology, it just supports for technology work better. It closely related to the theory and practice, and the problems of people and learning is the central point of knowledge management. [5] 

Types of knowledge:

Explicit knowledge:

Explicit knowledge is the type of knowledge that has been expressed into words and numbers, documents, drawing, movies, images, magazines, newspaper etc [6] . It is easy to codify, document, transfer, share, and communicate. In a company, explicit knowledge is all relevant documents of the company like contracts, business introduction, and customer information. And the staff can build, use, reuse and innovating the explicit knowledge.

Tacit knowledge:

By contrast with explicit knowledge, tacit knowledge exists in an individual's head which is very difficult to explain or share to anyone. It includes insights, intuitions and hunches. [7] This knowledge cannot be easily to draft so that it not easy to transfer from one people to another. For example: in football, the professional football player can feel very good.

The important of knowledge management:

Firstly, the importance here is we have to combine both explicit and tacit knowledge together and use the most effectively for the business.

Nowadays, almost companies have tendency is combining together to increase competitiveness by they allow their employees work together with employees from other companies and they usually sharing and exchange information of group members in order to increasing the efficiency of work. And knowledge management is the key to solving the demand for promote exchange, sharing and creative activity in the staff group. [8] 

Besides, time is the main competitive factor between all companies. The company may have to face sudden changes from the competitor or market volatility. Therefore, reaction and decision making of company should not only accurate but also as quickly as possible. This requires the knowledge level of employees have higher and information must be provided quickly, more accurately. If you good at knowledge management, you can solve these problems easily.

And the most important is about human resources. Human can create new knowledge and only human have the ability to apply that knowledge to continue to create more new knowledge. Organizations should have policies to recruit young staff, to create conditions for those who have experience working with new people, and of course appropriate treatment regime.

Moreover, knowledge management also can help organizations and individuals handling and solving problems as overloaded information, wrong information to improve the efficiency of decision.

According to VNU Business Media, Bill Gates said "knowledge workers need to share their knowledge and access the right information (necessary) at the right time. And this is extremely difficult today". [9] 

Knowledge management for individual and organization:

Knowledge management helps individual employees save time, have better decision making and problem solving. It also motivates staff create more values for their jobs, and provides challenges and opportunities. [10] It is a good environment for employees through meetings to share experiences as well as opinions together and the employees have more opportunities to express their thinking and feeling about the company or new product. On the other hand, knowledge management helps individuals improve their skills and mind in order to create more new products for organization.

Knowledge management also helps organizations and managers gain competitive advantage by understanding and use of intellectual asset which created by employees and their customers. And of course, when the knowledge is managed, all the problems will be solved quickly. [11] Not yet, they can improve more quality for their products and services, reduce copy, and produce more new and innovative products and services that satisfy the demand of customer.

The skills required in managers:

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In fact, knowledge usually exists separately within each individual. In order to change the knowledge of individuals into the assets of organizations, and everyone can exploit, used it for the common development, it also requires a process of create, store, sharing, and development in each organization. And to do this, the role of manager is extremely important in creating, recording, sharing and developing knowledge process. The managers can not only encourage or recorded the sharing of knowledge, but also must actively participate in sharing knowledge with staffs. This process does not only enrich the knowledge of individuals but also the motivation for staffs learning.

On the other hand, to do those responsibilities above, the manager must have so many skills. The first skill is good communication skill which can help the managers easy to impart their thinking to the employees. And the employees also feel comfortable to share their thinking, experiences with managers. The second skill is the ability to elect useful information such as what customers want now or which products is used the most and determines which technology is needed or the best for company. That skill will save a lot of time and cost for the business. Another skill that I think it's very important for a manager is managing time and cost effectively. Anyone also know that time and cost are two factors affect much to profit and creating advantage for any company [12] . Example: before producing any new product, the managers of marketing usually ask staffs doing the research with customers and choose the best ideas, then they discuss with managers from other areas. After that, each managers will do the plan so as to balance time and cost. In my opinion, I think that is very difficult because the longer time the manager takes, the more cost the organization must pay.

Example about KM Life Cycle:

According to Wiig's Knowledge Management Life Cycle [13] :

Build Knowledge: When you have an idea about product, you will develop it by collecting information and knowledge about your product.

Hold Knowledge: When you finish collecting information and knowledge you will write it in your document or save it in computer or USB.

Pool Knowledge: After saved it, you classify and share to staffs. The new staffs don't have experience in developing your product so they need the help of the old staffs who can share experience and can do the job well.

Use Knowledge: When you have information and knowledge about your product, you need to choose the best information to solve problem and develop the product.

Comparing with Honda, in 1978, Honda wanted to create a new car designs because the Civic and Accord were too familiar with customers. So, work was assigned to a group of young engineers and leaders only two commands: (1) A product with other basic first design, (2) Cars are not expensive not cheap. The idea of groups: cars must be shorter and higher, the sphere will give more spaces inside and saving energy. Finally, new product is a "tall boy" car. In view of knowledge management is an idea from a design car (tacit knowledge) through the sharing, acquisition, selection, evaluation and renewal of knowledge, the engineers at Honda launching a new vehicle (explicit knowledge). [14] 

Another example is Coca Cola Company, a famous company about soft drinks. It has been produced so many kinds of drinks such as Coca-cola (1886), Sprite (1962), Diet Coke (1982), Cherry Coke (1985), Vanilla Coke (2002), Black Coke (2006), and Orange Coke (2007). [15] Before, company sold those drinks into bottles throughout the world. After that, company thinks that using bottles is very inconvenient for people who want to bring their drinking next to them, so they distributes and merchandises drinks in cans and bottles to retail stores and vending machines. Moreover, Coca Cola Company also introduced snacks, foods for people to enjoy their lives in the most convenient ways and to have a good health.

Thus, after two examples above, now we can understand clearly that knowledge management is very important for any company and it has been used for long time ago. The main point here is how can those companies know and use knowledge management in the right way and how can they apply Knowledge Management Life Cycle into their company. The answer will be after all the problems; they usually find out the exactly reasons and save them in order to remind their employees to not do the wrong thing again. Not yet, they also use modern technology as well as useful information from searching customer's demands to create more new knowledge for company.


In a competitive environment, to develop a new products and services requires a perfect combination of many different fields from marketing, research, design, production to finance, etc, and knowledge management will the answer for all questions about knowledge assets, property rights, and beliefs before and after the job finished.

In my opinion, I think knowledge management actually is potential, experience and realistic value. After doing this research, I recognized that knowledge management is very important for any organization or company such as offers opportunity to turn knowledge into a system to help your company create an advantage in time, keep the competition happened continuous, create the economic value and market value, help the employees of the company work more effectively, make decisions on their own, reduce mistakes and satisfy the requirements of customer at the right time.