Knowledge Management In Achieving Competitive Advantage

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The use of Knowledge Management (KM) has become increasingly recognised as an integral part of an organisation's strategy to improve business performance, offering new challenges and opportunities and in increasing an organisations competitive viability (Rincon and Kadi, 2004; Carrillo et al, 2003). As with any organisation it is crucial that they achieve and maintain a competitive advantage over direct and indirect competitors, this can be accomplished with effective KM (Prahalad and Hamel, 1990).

To ensure success in today's global, interconnected market the fast and efficient exchange of information is crucial. Seubert, Balaji and Makhija (2001) suggest that sustainable competitive advantage is no longer based on the physical assets of an organisation; instead it is related to the effective routing of knowledge in an organisation.

There are a vast number of KM tools that are available on the general market that can be used by organisations; however each organisation has its own requirements when dealing with any KM based situations. Any KM tool that is implemented must be effective in controlling and exchanging knowledge to specific departments and employees especially when attempting to achieve and sustain a competitive advantage (The Economist, 2005).

It is essential that KM is not only implemented but also maintained in any organisation as a failure in communication within a business may have catastrophic results. Issues such as this may cause the competitive edge of a business being lost of competitors.

The aim of this paper is to explore a variety of different aspects to achieve and sustain competitive advantage in an organisation using conducted research as well as current literature. At the end of this paper a conclusion will be made from the referenced research including an overview of the future direction with regards to KM and competitive advantage.


Newman (1991) stated that "Knowledge Management is the collection of processes that govern the creation, dissemination, and utilization of knowledge. He also explains that in one form or another, knowledge management has been around for a very long time".

KM is not as simple as utilising packages that are available on the market as off the shelf solutions, whilst these solutions aim to assist with KM in an organisation as a whole they are quite simply an aid to KM. Instead, KM is the understanding of business processes and procedures as a whole as well as the knowledge that is used to ensure the processes function correctly (Newman, 1991).

Essentially KM is focused upon business information and data coupled with the potential of people's skills, competencies, ideas, intuitions, and motivations (Grey, 1996).

Examples of Knowledge Management aspects within an organisation could be as follows:

Fully detailed business processes and models.

Key terminology used within an organisation.

The ability to identify information that can be reused either within a specific business department or throughout the business as a whole.

Allow the workforce of an organisation to share and communicate with one another sharing knowledge.



With the study being undertaken from February 2010 - April 2010 a variety of different resources will be analysed and explored including Internet and written journals and books. Due to the time constraints on the project also factoring the time requirements for other University based assignments, primary research was unfeasible and could not be conducted.

In order to gain a clear picture of KM and its uses in achieving and sustaining a competitive advantage, resources from a variety of different authors will be used as well as utilising resources looking at different perspectives of KM as a whole.



During the study a variety of different aspects of Knowledge Management were researched and analysed in an attempt to gain a thorough understanding on how KM can not only achieve but also sustain a competitive advantage in an organisation.


During the past two decades since Knowledge Management was established (Nonaka, 1991) a vast number of Knowledge Management frameworks have been developed. Many of these developed frameworks are designed for very specific purposes and environments (Heisig, 2009).

There are three main types of Knowledge Management framework that have been established according to Rubenstein-Montano (2001), these include:

Prescriptive Frameworks - these frameworks aim to provide general guidance on types of Knowledge Management procedures and protocols however do not provide specific details on how to engage with these procedures.

Descriptive Frameworks - aim to describe Knowledge Management whilst identifying specific procedures and attributes required in order for the Knowledge Management System to be successful.

Hybrid Frameworks - are a combination of both Prescriptive and Descriptive Frameworks resulting in a well planned and also practical based framework (Weber et al, 2007).

In order for a business to be able to utilise a Knowledge Management Framework a good understanding of the business requirements must be obtained prior to handling any KM solutions.

The business requirements and processes that must be obtained vary greatly between organisations; however the same considerations must be made when considering implementing a KMS. Both tacit and explicit knowledge must be collected from employees within an organisation as well as retrieving any knowledge from business processes that are undertaken (Bray, 2007).

By obtaining and analysing the knowledge from employees this may then be separated into further specific categories including innovative and exploitative knowledge. By separating information into these two categories this allows for innovative knowledge to analysed and manipulated to provide an organisation with new ideas ultimately leading to a competitive market advantage (Bray, 2007).



This Knowledge Management Framework was developed by van der Spek and Spijkervet in 1997 in order to identify the cycle of knowledge changes during its lifecycle. The four parts to the lifecycle that were identified were the conceptual, reflection, action and retrospect stages. The following stages are described as follows:

Conceptual - obtain an insight into knowledge resources that are used within an organisation.

Reflection - an analysis of the knowledge obtained during the conceptual stage.

Action - is taken in order to introduce / improve knowledge within an organisation utilising the revised knowledge processed during the reflection stage.

Retrospect - this stage reanalyses an organisation's KMS in order to view and improvements that have been made as well as any areas that require further improvement.

This framework aims at identifying any problems that are faced within current and developing Knowledge Management Systems. By improving the organisation of knowledge within an organisation and removing any problematic knowledge this ensures that all employees have the latest and most up to date information (Holsapple et al, 1999).

By ensuring that all employees operate using the latest information within an organisation this assists with moving the business forward without any hindrance as well as providing its clients with the latest correct information. This allows for a competitive edge to be gained against market competitors.


This framework was designed to provide an organisation with a competitive advantage by Graham and Pizzo (1996). This framework divides the KM lifecycle into four stages, these are:

Identification - the ability to identify and obtain a business's needs and its strategic driving force.

Establishment - once a business's strategy and needs have been identified the knowledge requirements must be established separating knowledge within the organisation into core and interrelation knowledge. The paths that knowledge take throughout an organisation between departments is traced with any amendments being recorded and analysed.

Application - with the newly identified core and relational knowledge established, amendments can be made to the structure of a KMS as a whole in order to improve efficiency, speed and accuracy of the knowledge being stored and used.

Monitoring - with a new optimised KMS available within an organisation constant monitoring and rebalancing should take place to ensure that there are no issues in knowledge being transferred between personnel and departments.

The aim of this framework is to provide the business with a competitive advantage by ensuring that the speed in which knowledge can be accessed is fast and efficient as well ensuring a high accuracy of information (Holsapple et al, 1999). This framework also ensures that the path in which knowledge takes within an organisation as a whole is analysed to ensure that this is also optimised and accessible by the right people at the right time.

Ensuring that knowledge is available as and when required as well as being accurate assists an organisation in gaining a competitive advantage in a market. By utilising the latest accurate information this ensures the business can move forward successfully.

Also by allowing innovative knowledge to be input into a KMS and providing this knowledge to the correct area of a business this enables senior figures within an organisation to take ideas and develop these into new solutions, again providing a competitive advantage in the market.






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