Firstly, what is knowledge? Professors and experts have been studied about knowledge for many years. According to Oxford Dictionaries: knowledge is a collection of facts, information, and/or skills acquired through experience or education or (more generally) the theoretical or practical understanding of a subject. From the view of professional in the field, according to Dalkir, Knowledge Management in Theory and Practice, Elsevier Butterworth-Heinmann, 2005: "knowledge in an area as justified true beliefs about relationships among concepts relevant to that particular area". In my opinion, knowledge is about clearly understanding an concept through experience and practice. For example, when we go to school we can adopt a huge amount of information from books, teachers, friends. These information can not be considered as our knowledge only in case these information has been analyzed, practiced, improved, and transformed by the ourselves. Basically there are two forms of knowledge: tacit knowledge and explicit knowledge. Definitions for tacit knowledge and explicit knowledge was introduced world wide by Nonaka,Ikujiro, The Knowledge Creating Company, Havard Business Review,1991:
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Tacit knowledge: is personal, context-specific knowledge that is difficult to formalize, record, or articulate; it is stored in the heads of people. Tacit knowledge is usually created and developed through a process of trial and error encountered in practice.
Explicit knowledge is that knowledge which can be codified and transmitted in a systematic and formal language: documents, databases, webs,etc.
Also according to Nonaka, knowledge creation processes can be thought of as those activities that surround the conversion of subjective tacit knowledge to objective explicit knowledge which is also called externalization. In my opinion, it is very difficult to transform from tacit to explicit especially in the filed that those tacit knowledge is created through experience. For example: an tennis player knows very about how to play tennis. It is achieved through many years of practicing, playing, and competing. When he is playing tennis, he is able to make decision quickly. But it is extremely hard for him to codify the process of making decision in to documents then transfer it to another player. Besides being characterized by forms, knowledge can also be characterized by many other ways. From[ Singley and Anderson, 1989; Kogut and Zander 1992], knowledge includes declarative knowledge and procedural knowledge. In business environment today, knowledge in an organization is considered as an intangible asset or an intellectual capital. " in an organization, knowledge is often becomes embedded not only in documents or repositories but also in organizational routines, processes, practices and norms"-Davenport, T.H., Prusak, L., Information Ecology: Mastering the Information and Knowledge Environment, Oxford University Press, New York( 1997). From this point of view, knowledge is the factor that creates company's unique characteristics and competitive advantages. It is clearly that firms nowadays are focusing on investing in knowledge and appraising this investment as a long-term investment.
Secondly, once knowledge is available then how can firm manage knowledge? What is knowledge management? According to Dalkir(2005), knowledge management is an coordination of organization's people, technology, processes and organizational structure in order to add value to re-implementing and innovate knowledge. This coordination must run through a process which requires 3 levels of management, top- down bottom- up communication, technology. Those 3 factors must cooperate in creating, sharing, and applying knowledge as well as saving the valuable lessons learned and best practices into corporate memory in order to foster continued learning. The purpose of implementing knowledge management has been addressed by Wiig(1993) its purposes are to make the organization act as intelligently as possible in order to secure its viability and overall successful, and to otherwise realize the best value of its knowledge assets. Basically, the most core task of knowledge management is to convert tacit knowledge into explicit knowledge.
KNOWLEDGE MANAGEMENT AND ITS INFLUENCE TO ORGANIZATION
Employee is a core component of an organization. Therefore, knowledge can only contribute its highest value to an organization when it is well managed, implemented, improved by employee. When organization invest on knowledge means that it is investing on human resource. A successfully implemented knowledge management can dedicate many benefits for its employee so that operation of organization can be improved. It helps employee to: minimize time cost through better decision making and problem solving, upgrading employee to follow the trend. To an organization, knowledge management is able to create, maintain, and improve its competitive advantage across rivals. Suggested by Tiwana A, The Knowledge Management Toolkit, Prentice Hall PTR, 1996; he has pointed out a few key points about how knowledge management gives today's companies to successfully compete:
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Market valuation is largely based on intangible asset. In investing business, the market value is the value that investors and stock markets place on company. In reality, company that has learned to leverage its intangible asset well, this value might be much higher. Intangible asset such as reputations, human resource, knowledge management, achievement, collaboration, leadership, etc contribute to organization by create advantages. As for knowledge, it provides organization the ability of foresight which open opportunities and lead change.
Knowledge management can help organization become purposefully opportunistic. As mention above, market change continuously. These changes can affect organization's product line and service. Stepping one step before market and rival helps organization to realize and optimize opportunities. Further talking, knowledge management can help organization to build its strategic planning for long- term operation.
Knowledge management helps avoid unnecessary work duplication, expensive reinvention and repeated mistakes so that organization can save expenses and cost. In accounting , when organization can save their expenses and cost, more money is transferred into retained earning to continue develop and improve organization's operation.
Knowledge management can save organization from" knowledge walkouts". If key employee leaves which mean that the tacit knowledge also leaves. In case this tacit knowledge is very valuable, the potential of this knowledge will be on the hand of rivals will extremely affect the organization.
KNOWLEDGE MANAGEMENT AS A MAMAGERIAL TOOL TO MANAGER
The importance of knowledge management is undoubtedly. As has been mentioned above, knowledge management requires all level of an organization to participate. Specifically, manager who is responsible for the operation of an organization must be the leader in learning and improvement knowledge. There are there levels of management in theory. In this case, I only analyze the importance of knowledge management to top manager. Top manager is in charge of decision making, strategic planning and foresight as well as many other managerial aspects. Through out some view points of what knowledge management brings to organization, it is clearly to see how knowledge management supports manager in decision making, foresight and strategic planning. Tiwana( 1996) has strongly pointed out the knowledge providing effective decision support by making knowledge about past projects, initiatives, failures, successes, and effort readily available and accessible can make a significant contribution toward convalescing this process. In simple words, manager can learn from previous tasks. There are for sure difficulties in performing a task toward organization's goals and objectives. In modern organization, after the task was achieved by an assigned team, manager must evaluate the whole process to find out what needs to be improved. Analyzing process provides manager a new experience, new knowledge so that it could be applied in the future. Once problem happens again, manager can easily make an decision. Another useful application of knowledge management to manager is that to support them in strategic planning. As knowledge management can help organization become purposefully opportunistic. Manager sets goals and objective for short-term and long-term. Besides, manager compute plans for organization to avoid shock if market suddenly changed. Knowledge management helps manager to forecast the market, realize the opportunities and threats then build a strategic planning for long-term goals and objectives.
In order to successfully implement knowledge management, several leadership skill and managerial skills are required. Robbins and Alvy(1995) suggested that a characteristic of the successful leader is the ability to install in others the desire to learn what is necessary to help the organization reach its mission. In my opinion, those leadership skills related to knowledge management implementing are: lead by example, inspiration, delegation, communication. Manager is always recognized as an idol to employee. One effective ways to encourage is to show them the desire of learning and sharing from manager. Manager has to use communication skill to convince employee, mobilize them through difficulties, and remind them when they are neglecting. Together, manager and employee and every stakeholder of an organization must cooperate to make it stronger for every one stake.
CHALLENGING IN IMPLEMENTING KNOWLEDGE MANAGEMENT
Doing business, cost is the most important factor to be analyze carefully before open a project. Firstly, the cost comes from information technology to build infrastructure of knowledge management system. Secondly, assume that organization can afford to build an knowledge management system but it is not planned properly then the outcome can not be generated as expected. Therefore, organization must pay for the cost for running the knowledge management system until it can generate outcomes.
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Another challenging is to create the flow of knowledge. Specifically, the transfer of tacit knowledge to explicit knowledge, from knowledgeable worker to unknowledgeable worker is very difficult to happen due to culture and selfishness of human being. As proved above, tacit knowledge lies in the head of expertise, professor, CEO, knowledgeable worker therefore to encourage and convince them to transfer those knowledge requires new way of thinking, new reward policies based on their contribution to the organization's whole knowledge.
Through this essay, general theories about knowledge and knowledge management have been given. Knowledge management has been a key factor of companies' competitive advantages in today competitive environment. Considering its contribution to organization, knowledge management has also helped manager in decision making, strategic planning and foresight. Finally, besides advantages of implementing knowledge management, there are some challenges such as cost in time and investment, difficulties in the flow of knowledge. As a student, knowledge management is an effective an efficient improvement subject. It provides student concepts and practices in the way student learn and apply.