Knowledge Management For Competitive Companies Today Business Essay

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Every company has developed its reputation and expanded its size by not only taking advantages of knowledge management but also recognizing the best useful way to do. In recent years, the formation of Knowledge Management, aside from human resource management, is considered as a solid tool to bring a company to the world efficiently and assists the company exploit its power in the tough market. KM process is going to booming, making "a KM era" in the world, affects to any organization or even any nation and of course including private as well as state-owned companies. While most of companies, which stayed in the non-technology environment in the past, preferred using manual labor force, modern companies, nowadays, believe intellectual work definitely can get high productivity as well as benefit. In fact, firms approach and expand to market easier via globalization, which means they have to face with many competitors and knowledge management is taken form and be a successful key to help companies overcome any problem.


Knowledge is information, documents, or different skills that are achieved by an organization or an individual through their training, education, or practical experiences and be able to explain or address any issue. Individuals can improve their knowledge via complex cognitive process such as communication, learning, acquirement, and argument.

Data is a set of discrete or pure facts such as symbols, numbers, and images. It can be converted to information by adding value and putting into a context, assessment, classification and adjustment.

Information is messages usually express in words or communication can be seen or not seen in order to change awareness of receiver about specific matters. By processing, information is reorganized, more certain and useful than data which is the difference between them.

Information becomes an input of brain and it is selected and created knowledge then. Depending on each individual has different perceptive skill and creates different knowledge output. It means two people can have different perceptive knowledge even though they have the same information.


(Number or event)


(Data is placed in specific context)

Understanding relations

Understanding patterns


(Information is combined with

Experiences and judgments)

Making decision

(Planning actions)

Understanding principles realit

Source: Serban, A. M. & Luan, J., "Overview of knowledge management". New Direction for Institutional Research, No. 113, pp 9.

There are two kinds of knowledge are explicit knowledge and tacit knowledge.

Explicit knowledge is know-how can be showed in words, films, documents, etc. and easily transmit. For instance, specialist knowledge is displayed on educational websites, books, or newspapers. Tacit knowledge, however, is knowledge cannot be expressed in words and difficult to transmit to other people. It is not clear or understood thoroughly such as intuitions, beliefs, insights and emotions.

The distinction between explicit knowledge and tacit knowledge is expressed in the table below:


Explicit Knowledge


Tacit knowledge

(Not documented)

Easily to captured and codified

Well documented

Easily communicated and shared

Formal and systematic


Highly personal

Non verbalized and unspoken knowledge

Difficult to capture and share

Intuitive and unarticulated

Topic specific


Instruction manuals

Written procedures and books

Databases and reports

Research findings

Best practices

Informal face-to-face meetings and discussions

Personal experiences

Telephone conversations


Source: Bhatt 2001, Serban and Luan 2002, Cong and Pandya 2003

Knowledge Management is a new concept and is discussing in many articles. There is no unanimous approach or definition but have some well-known definitions can be close or embrace the whole knowledge management process.

"Knowledge management is the activity which is concerned with strategy and tactics to manage human centered assets" (Brooking, 1997)

"Knowledge Management is the discipline of enabling individuals, teams and entire organizations to collectively and systematically create, share and apply knowledge, to better achieve their objectives" (Ron Young, CEO/CKO Knowledge Associates International)

"Knowledge management will deliver outstanding collaboration and partnership working. It will ensure the region maximizes the value of its information and knowledge assets and it will help its citizens to use their creativity and skills better, leading to improved effectiveness and greater innovation". (West Midlands Regional Observatory, UK)

From the 19th century to today, the society has seemed to experience and develop by three stages of managements: manual labor management, human resource management and knowledge management. Each stage takes the different important but have same target is to get profit for companies. KM will turn explicit knowledge into tacit knowledge as easy to understand as possible for individuals in the enterprises, since then creating a community power, strong motivation in work and adapt to the changes of business environment without difficulty. Furthermore, a model of working team in almost previous companies or even recent companies is pick several staffs in some departments and combines as a team. The ability, experience and knowledge of the team work during the project may lose after finishing or breaking up and cannot use in the future. The concern of this problem is fading away when KM appears, captures all the information of the project and allows using again afterwards.

Information technology was reputed as a great progress changing the whole world all aspects. We cannot deny that IT assists organizations and people keep huge information and work effectively based on a computer whether direct or indirect but also related to KM. However, it doesn't make the competitive advantage for the company because competitors can buy our products officially and create similar ones. Combining IT and KM will make the company have long-term and high competition.

Let's take a well-known Wiig KM Cycle as an example.

Build Knowledge

Hold Knowledge

Pool Knowledge

Use Knowledge

Build knowledge refers to observing, training from work, learning from books, or experience. This is an elementary step for a company manufactures new products. For example, through media and newspapers, Panasonic Company catches the concern of clients about health and also something harms to the environment so their products always focus on "Green". Everything must be green which means avoiding pollution, and health-safe. In the Hold knowledge step, all information gain such as document, newspapers, videos and related stuffs of the "Green campaign" will be saved and kept into corporate memory and distributed to personnel as a tacit knowledge so that the company can promote it in the future. After that, the company picks up some staffs to be a team work. By the action of people share experience and knowledge together or asking advices of experts, original information will be assembled and accessed in order to get the better one - named Eco ideas. "Panasonic realizes the sharing of knowledge resources and skills to improve products and raise production technology, productivity and super quality". This step goes to Pool knowledge. Finally, this time for Use knowledge. The company begins to execute the project and manufacture product after finishing three previous steps. As the result, Panasonic Company has the series of air conditioner with the slogan "A button brings green life" help customers save energy, e-ions air reducing dust in room and environmentally friendly. Due to feedbacks of customers during the time use those products, the company will obtain information and again, return to the Build knowledge stage.


"Customer is King" is the knowing by heart sentence of all corporations around the world but how many companies are able to execute that slogan and how they serve customers in the best way. Those are big questions to every firm. Business exists because of customers and the target is to serve customers. Hence, KM is the best way to make clients to become loyal friends. Each customer's comment about quality service, product of the company need to store carefully and respectfully. So based on this action, business has the corporate memory to improve non-stop and develop its products and services. Thanks to KM, customer relationship becomes the property, and the clients' ideas and comments become property knowledge of the enterprises. A good point for this kind of KM competitive advantage is the Thomas Cook group which is one of the best-known travel companies in the world. The organization has a unique collection of archive material covering all aspects of its history, offering an information service to academics, journalists and researchers after overcoming the year of recession and collapse of many travel companies - 1971. In fact, the company used the 1927 archive memory to offer a special boxing package in 2007 to see the British professional boxer fight in New York as well as some sport tours. In 2009, the company's marketing employees used archive photographs, information in newspapers and magazines in order to promote the 140th anniversary of the company's first tour to Egypt. This created a strong brand and a unique promotional aspect to the campaign and product of Thomas Cook. Another example is Tam Viet Group. It is a training education organization, providing lots of skills such as life skill, communication skill, presentation skill, cognition skill, KM, etc. It is also the first enterprise implement KM area in Vietnam by applying the models of JT Frank Academy, David Skyrme, and Tam Viet. According to PhD. Hoang Ngoc Hung, in 2007, a deputy managing director of Tam Viet Group left the company and established a new similar one to compete against Tam Viet. With strong leadership, experience, sharing and innovative knowledge of KM lesson - each individual in the company has shared information together; Tam Viet was not affected and still survived until now.


The first advantage as I mentioned above is to help control and hold the experience and knowledge of all employees in the company whether they stay or leave out. Actually, KM has been used in many foreign countries, for example, USA, Europe, and Australia, but not much in Vietnam which caused a major damage for Tuan Thanh Company lost vnd$10 billion when a sell manager quit with potential customers and project. In contrast, Japan has even a KM Society with the purpose is to research deeply and extensively about KM and also introducing KM to the business in Japan by practice and theoretic. I think it is one of the main reasons to help Japan develop rapidly compared to other neighboring nations. KM also helps the company aware things happening around, approaches and evolves them to create new innovative products through its archive material or experienced personnel of the firm. Sometimes and somehow companies do not know what they have, in other words, KM can analyze facilities, the strength and weakness of labor force as well as leadership. Hence, the company affords to supply best services and high quality merchandises through the categorization of KM and people are able to access it faster and easier.


Every organization owns special knowledge but not many of them know how to exploit, dig and promote this source. Actually, it is not easy to put and use knowledge on the right track. Many firms waste huge amount of money for training staffs. The number of successful people is very limited or even they get what they already have but have not realized yet. Applying information technology and knowledge management simultaneously will benefit corporations getting away from poor management system and failure in the business world.