The context of knowledge and globalization

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In the context of knowledge and globalization nowadays, knowledge is becoming more important for the development of a sustainable organization. The knowledge has been created more and it is one of the key success factors. Moreover, knowledge management has become a strategy to compete effectively of many organizations.

In this essay, I will discuss about the importance of knowledge management in the organization and how effective knowledge management can brings competitive advantages to the organization. In addition, how knowledge management helps managers and managerial skills are used to successfully implement knowledge management in the organization through the knowledge life cycle.


According to Fernandez (2004), knowledge is quite different from data and information. To define knowledge, we need to distinguish it from data and information. Data is a collection of the facts, objective of facts, observations or perceptions (thoughts, idea) and data shows represents raw numbers or assertions (statement) and not associated with context. For example, the sale order of a restaurant includes three large pizzas and two medium sized of breads. According to Fernandez (2004), information is a data that is categorized, analyzed and it also is a subset of data that only includes those data that possess context, relevance, and purpose. Besides that, information involves manipulation of raw data. For example, the number of monthly sales of pizza and bread are considered information. So, the manager of the restaurant may base one that information in order to easily make decision and concern about the food's price and quality.

According to Nonaka and Takeuchi (1994), knowledge is intrinsically different from data and information, knowledge is defined in an area as justified true beliefs about relationships among concepts relevant to that particular area. For example, the monthly sales of foods go along with the information of monthly sold of beverage; we can calculate the profit of the total monthly sale. Finally, according to Fernandez (2004), we can distinguish knowledge by the following ways:

Knowledge is at highest level in a hierarchy with information at the middle level, and data to be at the lowest level.

Knowledge is the richest, deepest and most valuable of the three.

Information with direction.


According to Birmingham and Sheehan (2002), knowledge has four stages of life cycle:


In the creation stage, when the first idea comes up in the person's mind, they cannot identify it clearly. For the organization, its commercial viability can be tested through an appropriate strategy. In order to make the activities, the organizations have to build an environment. Creating this environment requires adjustments in the following areas:

Informal Knowledge System: The business can make the open plan by creating the space which has many common areas and giving the employees the chance to experiment, and provide resources for the training programs and conferences.

Birkinshaw, J. and Sheehan, T. 2002. Managing Knowledge Life Cycle. Mit Sloan Management Review. Massachusetts Institution of Technology.

Information Technology Systems: In this stage of the life cycle, the connecting device is also necessary such as discussion forums, videoconferencing facilities, and brainstorming software. Moreover, technology should connect people who can share some new idea at specialized internet forums.

Human Resources: The companies need new more employees for using the new knowledge.

External Relationship: In order to find out the new ideas, companies should contact with customers outside and expand the relationship with other partners.


In the mobilization stage, knowledge is developed; organizations try to extract value from it. In order to fulfill it, companies need to mobilize knowledge internally and keep it not exposed from outside in the proprietary.

Informal Knowledge System: Companies need to create internal networks so that the employee can transfer their knowledge by experience.

Information Technology Systems: Technology allows transferring the informal of knowledge. Moreover, the organizations need a system that can mark the existence of current ideas and projects.

Human Resources: Knowledge is mobilized when have new ideas that are transferred into commercial products and services.

External Relationships: In this state, the deep relationship with both customers and partners from outside is important.

Birkinshaw, J. and Sheehan, T. 2002. Managing Knowledge Life Cycle. Mit Sloan Management Review. Massachusetts Institution of Technology.


In the diffusion stage, it is quite opposite with other stages. The organizations will not try to keep the idea and knowledge for their own any more. By doing so, they start to sell it to the customers and marketing the valuable knowledge by media.

Informal Knowledge Systems: The valuable knowledge will be spread out widely. Moreover, the system needs to concentrate on training employees in the organizations and encourage their use.

Information Technology Systems: During this stage, because of the ease of access to information, it will create competitive advantages for the competitor to copy. So, the extensive knowledge database will be very helpful for the organization in the diffusion and commoditization stage.

Human Resources: The organization might need a good adviser to work with customers and confirm the value of applying the organization's knowledge to customer's issues.

External Relationship: The companies need to focus and enhance service quality to keep the relationship with customers. In addition, companies need to diversify product and best service to make the difference with the competitors. Besides that, the companies should take advantages of knowledge that can use in the diffusion stage.


At this stage, it will present how to manage knowledge which is diffused. The valuable knowledge has been diffuse totally.

Informal Knowledge Systems: In this stage, the use of formal knowledge systems will be more valuable than the informal one. The organization should focus on supplying the best practices that can add value to well developed processes.

Birkinshaw, J. and Sheehan, T. 2002. Managing Knowledge Life Cycle. Mit Sloan Management Review. Massachusetts Institution of Technology.

The systems are necessary in order to encourage new ways of commercializing existing knowledge.

Information Technology Systems: The system help companies to manage content active by maintain standard with old documents, adding new information and storing documents which are no longer current.

Human Resources: At this stage, the demands of knowledge decrease that lead to career opportunity also reduce. So, companies can use the contract employees to resolve this issue.


In the organization, each person will have their own knowledge which called tacit knowledge that can be only used by them and no one can use that knowledge. For example, the famous tennis players, he has his own skill that no one can learn. In contrast, when that person show their knowledge to outside (explicit knowledge) as information by writing documents or writing books then others can receive and understand that knowledge and can transform into their knowledge. What will happen if any an individual keeps an important position, own a large amount of knowledge and have a necessary knowledge leave the organization? Then the company will face with many difficult problems. For example, according to my father, the company have to face with the lack of human resource when the person who keeps the important position left the company. Then the company lost the large amount of knowledge which is the most important asset and the company have to spend hundreds of millions to train the new employees annually. So, if an organization does not know to take advantages and keep the amount of personal knowledge then the organizations will loss the knowledge to the competitors. In addition, knowledge management is also essential because the organizations sometimes will face the issue of the overload of information.

Birkinshaw, J. and Sheehan, T. 2002. Managing Knowledge Life Cycle. Mit Sloan Management Review. Massachusetts Institution of Technology.

For instance, there is too much information. So, an individual cannot control it and do not how to approach the important information. Therefore, for the organizations, the quality of information is the most important.


Today, any small and medium enterprises always face many difficult problems such as undercapitalized, lack of human resources, obsolete technology and poor management. Therefore, the enterprises also need to apply modern management models such as knowledge management in order to effectively compete to others enterprises. In the 21st century, for the modern organizations, knowledge has become more and more important for development of a sustainable business. It is considered one of the key successful factors and knowledge management has become an effectively competitive strategy in all types of organizations. So, if any the organization knows how to manage and effective use their knowledge resources, they will have a competitive advantage to ensure the sustainable development of their organization.

In addition, knowledge management creates competitive advantage for small and multinationals company base on different intrinsic properties of good knowledge management practices. For instance, KM creates:

Strong corporate culture

Reduce cost and marketing best practices

Improve managerial leadership and minimize the corporate tension in multicultural corporate environment

Improve the retrenchment of captured knowledge

For instance, the large corporate have many subsidiaries. The employees between the branches do the same work with others. So, that issue will waste a lot of time and cost. Therefore, knowledge management helps the large business firms expand the relationship between the subsidiaries, increase productivity, reduce cost, and store the working experience and knowledge of the employees.


In the context of economic globalization today, managers gradually realize the important role of knowledge management because knowledge management has become an important factor to decide the sustainable development of many organizations and can compete with others businesses base on the value of knowledge. In order to successfully implement knowledge management, the leaderships need to learn new more knowledge, share knowledge, take advantages from others organization's knowledge and the managers need to focus on the human factors. For example, the managers must create the environment of knowledge sharing in the workplace for their employees so that for those who have less experience can learn more from the others.


In summary, knowledge is quite different from data and information. It is created from valuable information which is created by processed data. Then people can use the knowledge to make decision. Knowledge is defined in an area as justified true beliefs about relationships among concepts relevant to that particular area. In addition, knowledge has four stages of life cycles: creation, mobilization, diffusion and commoditization.

The effective knowledge management is the key success and it has become the most decisive factor for the development for any organizations today. Therefore, the leaderships need to effectively implement knowledge management in the business.