The difficult challenges of running a company

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Running business today is very difficult and different to the past. Corporation should consider about the knowledge that they will sent to their staffs, customers and competitors. As we know that at the beginning the knowledge inside the business always small and cannot let it public, however, when the business become bigger and bigger, they should have a plan to manage their business knowledge before giving it out to the market.

Considerable attention is being focused on Knowledge management (KM) from the organization and the top managers in recent years. Many corporations and chief managers consider KM as the most strategically important resource, and learning also the most strategically important capability for business organizations. Most of organizations have recognized the benefits of KM so they more and more have invested in developing KM. This essay will talk some more details about the KM.

Many people confuse about the meaning of knowledge, information and data, and they think that they have the same meaning. However, they are somehow different and also have their own level. Data is the raw or unprocessed information like symbol, numbers or alphabet, and it’s usually the initial idea of something. Data is unlimited, and we can see it everywhere on earth or galaxy. In hierarchy tower, data is a lowest level.

Synthesizing

Decision Making

Analyzing

Summarizing

Organizing

Collecting

Data

Information

Knowledge

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In case of information, it is higher level than data. The collection of data will create the information. Throughout the analyzing and summarizing, data become the information for some purpose, so it will affect some behavior, decision and outcome.

The highest level in the hierarchy is Knowledge. It is more complicated than other. Knowledge is a justified true belief about relationships among concept relevant to the particular area. In corporations or organizations, knowledge is usually converted into not only materials, documents or repositories but also in the corporation processes and practices. Basing on organizing, synthesizing or summarizing, the information becomes the knowledge to be easier to understanding, awareness. It can be change during the learning process because of the changing in understanding, decision or action of a person, organization or a group For example: the knowledge of having breakfast will be different among people, some people will have a big breakfast, and some will have light breakfast. Some will think that eating quickly is good, and some will think that eating slowly is good.

There are two types of knowledge including tacit knowledge and explicit knowledge. Tacit knowledge is the knowledge that in the mind of people, and it is hard to express, transfer or write down. It is usually experiences, thinking, new ideas, etc. In contrast, there is the explicit knowledge which is tangible and easily found in the normal life such as documents, seminars, presentations, texts, books, internets, videos, recordings, etc. There is the obvious example for both tacit knowledge and explicit knowledge: in corporation, the way of training employees is learning from the seminars, internal documents that is explicit knowledge, and the new employees learning from the seniors employees is tacit knowledge. In fact, most of the tacit knowledge cannot transfer to explicit knowledge, and it is just like the iceberg which is 95% under the water and 5% above the water. We just see the part above the water as explicit knowledge and we think is huge, but actually, the under part are bigger which represent for the tacit knowledge. People often convert explicit knowledge to tacit knowledge by reading and learning from books, and sometimes convert tacit knowledge to explicit knowledge when an individual with lots of tacit knowledge writes a book formalizing that knowledge(difficult to do this).

Knowledge management definition:

Quintas et al. (1997) defined knowledge management as "the process of continually managing knowledge of all kinds to meet existing and emerging needs, to identify and exploit existing and acquired knowledge assets and to develop new opportunity." Knowledge management is concept about the process to manage the intellectual assets which will create the value for the firms as well as rise productivity and can maintain and develop the competitive advantage.

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There are two kinds of knowledge management. First is to manage the existing knowledge to develop the knowledge repositories (memos, reports, presentations and articles), general knowledge. Second is to manage knowledge-specific activities which come from the acquisition and creation activities, communication, sharing and application, etc. In practice, knowledge management includes identifying the intellectual assets of organization and creating new knowledge to benefit for competitive advantage.

Actually, Knowledge management looks into the way how corporations exist in the market, how they are adapted with the conditions of marketplace. It relate to the way of using and developing the knowledge assets of a corporation or organizations.

The Competitive Advantages:

In organization, the manager is the person who will have responsibilities to make decision for every strategy to operate. Data, information will become a knowledge but how to use it is more important. There are some competitive Advantages when the manager can control and use the knowledge.

First, knowledge management helps the managers create the learning and innovation culture for company which help maintain the competitive position. To manage the knowledge inside the company, the manager will create working condition which is the free sharing knowledge environment for employees will improve the knowledge level but it can never take away the knowledge from them. For example: when I worked for the medical equipment company 2 years ago, people here worked in the sharing knowledge environment. People sharing knowledge together, it improves the effectiveness of the job. Besides, it helps company having the friendly working condition and all the job was done fluently.

Second, through KM, the leader of company can meet the opportunities to maximize the benefit for the company. The way the managers catch up the new information and transfer it into his knowledge, so it will help them a lot in making decision timely and exactly about cheaper cost; higher quality at same cost; target a different segment etc. therefore they can challenge with their competitors in the marketplace. For example: when the managers have the information about the market like new policies issuing, the fluctuation of interest rates of exchange rates, the increasing of oil price or real estate, they will have the right decision for the developing strategies of company like the case at the end of 2008, some of the rubber production companies in Viet Nam had the information of raw material increasing, so they analyzed, forecasted and tried to collect as much as possible the raw material of rubber. As a result, the rubber production companies which have knowledge management well gained the big profit in year 2009 about more than 400% and have the bigger advantage in market.

Third, the good knowledge management can create the competitive advantages for enterprises. With corporations or organizations, the customers play the most strategically important role. To serve the customers well and maintain that relationship, the business should use the knowledge to reduce their cycle time, shorten product development time, and improve customer service. How much data and information about customers that they have will help them to improve the knowledge about the behaviors, culture and the loyalty of their customers to challenge with their competitors in the marketplace.

KM on supporting managers practices:

Managing the blow of knowledge will help the manager become a great learners, thinkers and performers. In fact, the more new data, information you get, the more knowledge you will receive. It can be done by teaching them about the various KM processes and explaining the secrets of unlocking their true intellect.

Encouraging and rewarding knowledge workers and seekers for their contribution and utilization of the knowledge maximize the knowledge capital.

Creating awareness on the importance of team-work. Disciplined execution managed systematically is the only option for meeting the highest expectations.

Leadership and managerial skills need:

With the quickly developing of technology, the more knowledge transfer between tacit knowledge and explicit knowledge, so the managers should adapt with the new changing, therefore they should have some skills need for the new situations to use the knowledge for the organization. First, in the organization, the ways to transfer knowledge to the employees are very important, so the skill need for the knowledge transferring process is communication skill. In corporation, the managers should communicate with their staffs, employees or workers to research and know the knowledge level of their labor force. From that, they use their communication skill to bring the knowledge need to their labor force to improve their knowledge level.

CONCLUSION:

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