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Knowledge is an indispenable part in human life today when living in developed working environment. Beside that, getting knowledge, people can be worked in better environment, improve their life better than limbs labor. It also help country is more developed and make chance to intergrate with world. So, seeing the importance of knowledge, organizations use the strategy is managing knowledge to help their company achieve their aims and more progress.

In this report I will discuss about "The value of effective knowledge management (KM) to the organization and on supporting managerial practices" to help you understanding clearly about the importance of knowledge, how organizations manage the knowledge and how it impact into organizations. First, I will to explain the basic background is the definition of knowledge, kinds of knowledge. Then, I analyze the Wiig Km cycle and give some examples to make you understand more. After that, I explain the definition of knowledge management and why-how it impact on the organizations. In this section, I try to give some examples of some companies that use and do not use the knowledge management method. Finally, I give some skills that manager or leadership need to be have to mange knowledge, guide staff, and how to apply knowledge successfully.


Knowledge is the valuable asset not only the people who own it, but also it is valuable with organization. It is a key for organization to improve their products, services, get more benefit for their company. World developes day by day, the competition is more khoc liet, producing new products and satisfy the demand of customers is the song con problem of organizations. to help themselves, companies have appropriate strategies with the market, and the importance part is human, is their employees. chat xam cua employees is the importance tool to help them achieve their goals. And how company can use their knowledge efficiently ?


In nowadays, with the development of technology, knowledge becomes the main factor in developing and existing of organization. Knowledge which has many different definition, but according me, I understand that knowledge means that things I have learned and acquired inside and outside from: documents, book, experience from another people, communicate, and so on. Knowledge can be divided into two kinds: Tacit knowledge and explicit knowledge.

Explicit knowledge

Explicit knowledge is the knowledge that has been represented external and easy to transfer, base on documents, books, sounds, films, images. This knowledge is usually to be accepted through education system and regular training. [1] Examples: you can make a clothes base on the instruction and step to sew clothes in sewing books. Base on documents in the company as contract, customer information, brochure, computer systems, so on, the employees can reference, use, reuse, and innovate the explicit knowledge.

Tacit knowledge

Opposite with explicit knowledge, the tacit knowledge is the knowledge that inside head, in the brain as: the experience, skills, secret, and so on. It can not represent into document, can not transfer so, you just get this knowledge by practicing by yourself. [2] Examples: no books that show you how to swim, to know how to swim you have to practice swimming in the pool by yourself, or trainer teach you or someone help you, just base on their action or what they say to teach you, nothing to read. It hard to share to people in to documents, can not be written, this knowledge can be shared base on the experience of individual and how to explain that by the action, or how they say to make people understand and acquire individual's knowledge clearly and effectively.

Wiig Knowlegde Management Cycle

"Wiig(1993) proposed his Knowledge Management model with a principle which states that,knowledge can be useful if it is well oraganized. Wiig KM model is one of the powerful theoretical KM model which is in existence today.This model helps the practitioners toadopt a refined approach to managing knowledge based on the type of knowledge." [3] 

Wiig KM cycle includes 4 steps. First step is "Build knowledge", this step means that how knowledge can be created. It is created by many sources as: reading books, listening lectures, communication, training, watching movies, learning experiences from people. Examples: companies will nominate some staff to study some courses or continue to Bachelor. It is a way that company spend money for employees to improve their knowledge and to help company start to earn profit when employees graduate their courses and serve company better with more knowledge and skills. Second step is "Hold knowledge", when employees get knowledge, where they keep thei knowlegde and how? Knowledge can be kept in many ways depend on people who use it as: in their minds, write on notebooks, computerized knowledge bases,.. examples: when implement a project, problems, unexpected situations have been solved can be saved in document as reports and keep them in company's profile. Then, when have same situations, employees can learn and have experience to solve these problems effecttively. Third step is "Pool knowledge", knowledge can be taken forms such as discussions, expert networks and formal work teams [4] . Examples: working in team will help members in group cultivate more knowledge, some situations that they do not how to solve, the other members or their colleagues will gave some advices or solutions to help them solve problems. Finally steps is "Use knowledge", how to use knowledge into work efficiently. Employees need to use knowledge that useful for their task, their situations or their problems. Examples: in some companies, when customers go to customer service department, they complained somethings that they were not satisfy and angry with experts, eventhough employees did not do any thing wrongs. So in this situation, the expert is very patient, gave some apologies to customer and find out the reason why their customer angry, explained questions clearly and friendly, smile. The expert has to use necessary skill and reaction reasonably and I think no customer can be angry longer with expert's service.

Knowledge management

Knowledge always deep and wide, but it just belong to individual, each person has their special knowledge in their field. Organization want to improve the quality of products and services, the ability of competition, and earn more profit, employee have to share their knowledge in different fields. To get this goal, organization needs to have knowledge management. Knowledge management is a process, is an effective management tool in order to sharing, receive, save, choose, create knowledge and provide to right people, at the right place and on the right time with purpose to improve the effectiveness of decision, effective enforce, and the ability of the organization. [5] Knowledge management plays the most importance part in keeping the competitive advantage by satisfying customers.

When organization applies knowledge management, the business of company is better, provide benefit to company as well as employees. Knowledge management can helps employees learn more knowledge through working in group. Members of group usually in different fields, they just understand about their field but do not know the other fields. So working in group with sharing their experience, their knowledge, show their creativeness can help company improve their product, individual employees can acquire more knowledge, getting better decision in solving problems, experience how to satisfy customers well, how to keep good relationship with customers, how to find target customer with new product, how to design product more attractive, so on. The importance point is knowledge is just the asset of individual, when they quit their job, the knowledge maybe go out and organization loose a lot, reduce profitability of company. As example: at Tuan Thanh Company, when marketing manager quit his job and bring all knowlegde and his experiences, his relationship with customers as well as the secret that how to build the relationship with customer. Tuan Thanh Company did not use knowledge management as training class to let employees learn his experiences that he had, so when he left, everything is gone out with him. His left made the profit of company lost protential projects and projects are in negotiation process, so company lost about ten millions VND. [6] 

When applying knowledge management, knowledge of each individual as tacit knowledge can be become to explicit knowledge through exchange process directly, and store knowledge in the form of explicit. As examples: in 1987, Honda requried a gorup of young engineers in Honda create a new car with two goals: new design model and resonable price. So, egineers giving an idea that new car have to shorter, taller, sphere would make car have more seats and save energy. Then, a City cars with name is "Tall Boy" borned and received nhung loi khen va ung ho cua moi nguoi, doanh thu tang, cong ty kiem duoc loi nhuan. Va sau do, dong xe cung dc cai tien thanh Hyper Turbo, Body Sonic and High Roff. So, base on the idea with new design (tacit knowledge), engineers working in group will share their ideas, the ideas will be acquired, choosed, analyze, evaluate and renew knowledge to become a new car (explicit knowledge) with new desin and better quality in the market. [7] Beside that, working in the competitive environment, with the changing in the market, the competition of competitors, organization has to have appropriate strategies to compete. So, the reaction and give decision in a situation of employee not just exactly but also as soon as possible. If manage knowledge well, organization can solve these problems. Organization use knowledge management with the goal to create new product and service, satisfy the demand of clients, improve the competition through reduce arise wasting because of knowledge can not be shared, unsuccessfulness do not have to be analyzed, learning from experience, mistakes were reiterated, so on. Besides, the role of knowledge management is:

Always innovating, create new ideas and develop potentiality though of organization.

Admit experiences and make it become explicit knowledge can be use to all people when needed.

Impulse cooperate, sharing knowledge, learning and make fast progress.

Improve the quality of giving decision and the quality of intelligence operations. [8] 

So, manage knowledge effective, organization can increase their productivity, impulse innovating operation, improve the effect of management, improve the satisfaction of customers, giving better decision, attract and develop talented person, encourage learning and sharing. It will help organization have enough strength and opportunities to compete with competitors and increase their wealth as well as their employees.

Skills requirement of manager:

Organization wants to make tacit knowledge of employees to become knowledge of organization, of all employees to use and develop organization, which requires the deliberate and systematic coordination of an organization's people, technology, processes, company culture. The role of manager is very importance, not just encourage, recording sharing knowledge, the manger have to take the initiative take part in sharing knowledge actively besides guide employees develop the resources of internal knowledge together as: sharing community, internal seminar. This progress is not just enrich individual knowledge, but also is motivate power for learning of each employee. To get this goal, the manager needs to have their own skill to gain knowledge for employees. The first skill is good at communication skill, which will help manager to be confident to have enough effort to persuade employees doing what manager wishes. Manger with listening skill can make employee feel that their thinking, their sharing of experience, of knowledge can be understood and valuable, they will feel freely and are respected. So they will not afraid of all that they know in their head for sharing to all people. Examples: Terry Leathy, CEO of Tesco, he spends 2 days per week to come to store to listening comments of customers and encourage his employees. It bring a huge of spiritual values for their employees, they feel that company is cared to them, and they will try their best to serve for their company. The other skill that I think manager need to have is giving decision fast, exactly and efficiently. Because when their projects are implemented soon, this means the profitability is increase and save times and cost. But it is not easy skill because giving right decisision as soon as possible may be make them giving wrong decision, affect to profit of company. So, managers need to have appropriate strategies, using useful information as well as useful employees and give them assignments in their right professional. Examples: A.G. Lafley is CEO of Proctor and Gamble, he will earn more profit to company with his tragegies and make this Group at the first producing consumer goods around the world. He spent 2/3 times for comments, ask and answer questions of employees as well as consumers. He use a new strategies for create new products. He will use 50% of innovative internal and 50% external. It means: half of new products will come from their laboratory and the remain have to be accepted by laboratory. He will find innovatives from external collaborators, and to use this effectively is not easy. In 2007, Lafley decided to reduce traditional advertisement form, changed by advertisements in Internet, advertisements at stores, and sale promotion events. [9] Manager need to have some special skill that will help company have the advantage comparitive in the market and can make the profitability for their company. It is their challenges to become talent business man in the world.


In my opinion, knoeldge management is a necessary part that can not be lack in the managing system in organization. It plays an importance role in create profit for organization. Beside that, it can help organization have the advantage comparative with talent working for their company, can be compete with business in domestic and foreign. So, it can impulse the econimic of Viet Nam is more development and wealth.