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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.
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. A visual definition relates knowledge with a bite from a red apple - 'a bite (of information) should be taken, chewed, digested, and acted upon so that it becomes knowledge'.
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).
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.
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 Value of Knowledge Management in Company:
The first value that knowledge management creates for company is the culture. KM will create the environment for people feel free to share knowledge which 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. It helps company having the friendly working condition, besides that when people sharing knowledge together, and it improves the efficiency of the job.
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. 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, most 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, most of rubber production companies gained the big profit in year 2009 about more than 400%.
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.