The value of effective knowledge management to the organization



In condition of economic globalization is happening quickly all over the world, along with the development of the accelerated pace of scientific and technical revolution and technology, companies are faced to chances and challenges posed by the revolution brought. Human resources are become the most valuable assets, the most important and most decisive for survive and development of any company. So, when we implement about this problem, we need to understand that human resources have the knowledge, skills at a high level, that creative work rather than labor empirical muscle. Social work force there has been a marked improvement from the workers' share green "is mostly the workers," white collar "is primarily. During 1880, approximate 9/10 labors is manual labors, nowadays, this number decreases 1/5 and 4/5 labors are knowledge labors. [1] 

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The explosion of information and knowledge with the current breakneck speed makes the employees and organizations more easily in solving their problem. But, information and knowledge overload are become burden. Thus, finding and managing knowledge are very necessary to organizations in practices. And nowadays, knowledge management is consider as a trend in management of organizations

What is the nature of information and knowledge management?

Before discussing knowledge management, a brief discussion is given about the Knowledge and its distinction with data and information in the context of information systems.

Now, I begin with data, What is data? Data is the data layer exists in the knowledge of different storage types: paper, computer file, ... Data and clear information exists and can be encoded and transmitted easily. Data is becomes information when it is analyzed, sorted, and placed in a general context and can become aware of the recipient. Information is data associated with a contact or a purpose. Information into knowledge when it is used for comparison and evaluation of outcomes, establish contacts and conduct a dialogue. Information is data in the context that it can use for decision making. The data are sorted to create meaning for the recipient, it could be text, images, film, or a conversation with another person. Knowledge is information that someone was armed. Knowledge means knowledge about a certain topic, the potential to use it on a certain goal. The uncertainty of the memory limits the reliability of knowledge about the past, while the occurrence of unpredictable events again limits the reliability of knowledge about the future.

Knowledge today is considered a business strategy effectiveness of each organization. So the formation and knowledge management is critical. So that every organization needed to keep knowledge to maintain their advantages and positions. The common attitude of most people is to hold on to one's knowledge since it is what makes him or her an asset to the organization. Today, knowledge is still considered power - an enormous power in fact - but the understanding has changed considerably, particularly from the perspective of organizations. New model of each organization is now mutual knowledge sharing among employees to the organizational development. That is the key to knowledge management - knowledge sharing.

In general, there are two types of knowledge: tacit knowledge and explicit knowledge. Tacit knowledge is that stored in the brain of a person. Explicit knowledge is that contained in documents or other forms of storage other than the human brain. Explicit knowledge may therefore be stored or imbedded in facilities, products, processes, services and systems. Both types of knowledge can be produced as a result of interactions or innovations. They can be the outcome of relationships or alliances. They permeate the daily functioning of organizations and contribute to the attainment of their objectives. Both tacit and explicit knowledge enable organizations to respond to novel situations and emerging challenges.

A survey in 2001 indicated that: "26% average in the organization of knowledge stored in documents (papers, books, documents), 20% is stored digitally, and stored in 42% of the workers" [2] 

Why do we need knowledge? As you known, during the period of employment, we find for each position, individual positions, employers are required to make the match as: age, gender, experience.. And most qualified. Why are qualifications important conditions that the employer give?

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Understanding the qualities and abilities of each person is a very difficult job, need more time, knowledge and professional qualifications. The main qualification is to represent the qualities and abilities of each person. But it is not always accurate (because there are many cases buy - fraudulent degrees), but look at each one degree achieved, people will have an overall assessment and pre-qualification and that person's qualifications. Thus, diploma as evidence of knowledge.

Persons who have knowledge capacity, qualifications, knowledge, experience and skills at work, in life. Therefore the intellectuals who often have to act wisely and scientific method. Thus they are likely to be people would notice and opportunity to them also higher.

Together, explicit and tacit knowledge constitute the organization's information capital. Collective knowledge in an organizational context results from the brokerage of information among individuals in a continuous process of transforming data into information and converting tacit knowledge into explicit knowledge. So it becomes more important to transform tacit knowledge into explicit knowledge.

I have an example to explain about data, information and knowledge. I will use an example with using a saving account in a bank relates with principal, interest and interest rate:

Data: I have two numbers such as 1000 or 8%, completely out of context, are just pieces of data. Interest, principal, and interest rate, out of context, are not much more than data as each has multiple meanings which are context dependent.

Information: If I establish a bank savings account as the basis for context, then interest, principal, and interest rate become meaningful in that context with specific interpretations. Principal is the amount of money, $1000, in the savings account. Interest rate, 8%, is the factor used by the bank to compute interest on the principal.

Knowledge: If I put $1000 in my savings account, and the bank pays 8% interest yearly, then at the end of one year the bank will compute the interest of $80 and add it to my principal and I will have $1080 in the bank. This pattern represents knowledge, which, when I understand it, allows me to understand how the pattern will evolve over time and the results it will produce. In understanding the pattern, I know and what I know is knowledge. If I deposit more money into my account, I know that I will earn more interest, while if I withdraw money from my account; I know that I will earn less interest.

According to example, we can see that Knowledge is the key to success for each process operation of the organization. So organizations need to make the reasonable, timely and use the appropriate tool to promote all the interests and efficiency of knowledge in the organization

Thus, the management of knowledge is very necessary in every organization. However, what is knowledge management? And why must knowledge management. \

Knowledge management is a process, an effective management tool to share, capture, storage, selection, creativity and knowledge to provide the right person, right place, right time to raise the efficiency of decision the effective implementation and adaptability of the organization. Knowledge management is essentially a process of promoting innovation, initiation of ideas, thoroughly exploited wealth of knowledge in the organization, and is a process of sharing, developing and keeping voters way to provide continuity in time, right place and right person for the purpose of making quick decisions make breakthrough progress. Knowledge management is becoming a global trend. The position of this nascent sector governance has been confirmed by the success of many worlds leading Group in the application. Based on the knowledge management philosophy, values and spiritual matter, only profits and market value of companies using the corporate world has made admirable.

Why knowledge management? In my opinion, knowledge is becoming more important than ever. the information explosion has reached its peak. From the individual needs, the increasing demand for the exchange, sharing and innovation in many areas has led to the need for knowledge management. An individual or an organization that will be underdeveloped when they don't receive knowledge. And once the number of knowledge is too large and complex collection of knowledge will become difficult if not know how to administer a rigorous and reasonable. Therefore, knowledge management has gradually become an essential method in the management of all activities of individuals and organizations


The importance of knowledge management in the organization and how effectively implement knowledge management can create competitive advantage.

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In my thinking, knowledge management is a framework within which the organization control and check all its processes and strategies as knowledge management processes. In this view, all business management processes affect creativity, popularity, innovation, existence and application of knowledge management toward organizational.

Knowledge management is necessary for companies because what worked yesterday may or may not work tomorrow. Considering a simplistic example, companies that were manufacturing the best quality of buggy whips became obsolete regardless of the efficiency of their processes since their product definition didn't keep up with the changing needs of the market. To appropriate and adapt timely to the changes of business environment. Organizations should have the accurate assessment of the internal organization regarding the effectiveness of business

Implement knowledge management processes in the workplace

Knowledge begins with an understanding of business operations, and each point of the operation of the organization. An organization operates inefficient because they do not have the unity of knowledge and the business strategy. So knowledge management must be combined with an understanding of business processes


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Organization needs to understand what is knowledge for them and what is not. Initially while setting up a knowledge management program, technology should take a back seat. The focus should be on processes and management program; technology should be seen as an enabler. Many organizations make mistake by throwing technology before understanding the organization knowledge assets and processes. In my opinion, to successfully implement knowledge management is to know how to use appropriate knowledge and manage it effectively. Because knowledge is only useful when it is placed in proper context and used for proper purposes

Steps for implementing an effective knowledge management program or practice are:

1. Identifying knowledge - Organizations need to capture and understand the source of knowledge, should be carefully stored, to be able to easily use and share as needed

2. Organizing Knowledge - Once knowledge has been identified. it is essential that organizations need to identify any necessary knowledge, knowledge that is not necessary to guide management activities for the organization. Organizations need to understand the difference between tacit and explicit knowledge.

3. Transforming Knowledge - Knowledge to transform the organization is always easier to decide and build but the new strategy. Knowledge need to be received, applied and shared effectively.


4. Measuring knowledge benefits - Success is the best result for each process of knowledge management. The measurement process and effective implementation will be made through the organization's revenue. So the control for each process of knowledge management should be closely and effectively

Thus, knowledge management program can even be implemented if the organizations understand the purpose of investment and acquisition opportunities where possible.

Knowledge management life cycle

Knowledge management is essentially a process of promoting innovation, initiation of ideas, thoroughly exploited wealth of knowledge in the organization, and is a process of sharing, developing and keeping voters way to provide continuity in time, right place and right person for the purpose of making quick decisions make breakthrough progress.

There are many approaches and different definitions depending on perspective and methods of the individual or entity. These include a management and learning of individuals and organizations, communication, technology and information systems, artificial intelligence, intellectual property, ... No one definition or approach unity of knowledge management at all, but can contain the all-encompassing. management including human knowledge, the ways and processes, operations, technology and a wider environment to promote the format, creativity, communication or sharing, and use of personal knowledge personnel as well as knowledge of the organization. It is about the management processes to create, distribute and use knowledge to achieve organizational goals. It requires a combination of business awareness, attitude and creative practices, systems, policies and procedures designed to liberate the power of information and ideas.

The tools can furthers be classified into knowledge creation, knowledge incretion, knowledge sharing and knowledge utilization.

The various steps are described here:

Knowledge Creation - Knowledge creation consists of two types: explicit knowledge and tacit knowledge. Tacit knowledge is knowledge that a person can be an unconscious self. Tacit knowledge cannot explain or argue, because tacit knowledge is not understood clearly, it is familiar, through automatic and conscious wearer. For example: confidence, experience and sensitivity in their work ...And explicit knowledge is the explanation and knowledge are encoded by text, documents, audio, video and images through words or language are not words, rule systems, programs computer, standard or other means. These knowledge structures can be showed out and easy transfer. For example, knowledge about specializations is presented in textbooks, books, newspapers, magazines ...

Knowledge Storage - In successful organizations, knowledge has always been considered as the most valuable asset. Therefore, knowledge has always been stored and closely managed in the archive. Decisions related to knowledge made by the organization.


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Knowledge Sharing - Knowledge management is a method to create an organization with the personal dynamic, a structure continuous learning system with high adaptability. Overcome the limitations of traditional modes of governance, knowledge management helps an individual in the organization constantly learning, making the lazy employees into creative people knowledge continually. Based on shared criteria and evaluation of knowledge contribution, knowledge management creates incentives to create cultural sharing among member organizations, promoting the study factors and organizational learning throughout life of the business.

Knowledge Utilization - This is final goal of knowledge practice. Knowledge will gradually lose its value if it is not used with its potential and its intended purpose. The more knowledge is created as knowledge is applied and utilized.

In the knowledge economy, job creation, transmission, storage, development and use of knowledge is the dominant activity of all economic activities, science and technology are productive forces directly. Theories of human governance are gradually replaced by knowledge management theory. The practice of knowledge management is done will help to businesses and the economy flourished.


Now almost every organization has recognized that in order to survive in today's competitive and global environment, it has to face knowledge-based economy revolution. They have realized the need and importance of this valuable asset. Since knowledge management caters to the critical issues of organizational adaptation, survival and competence in face of increasingly environmental change, therefore there is an essential need of managing it effectively. There components that can play effective role in managing this valuable asset effectively include: defining effective strategies for its management, using state of art information technologies for implementing these strategies and developing knowledge management systems and a strong culture that can recognize its need and importance and thus adapt it. Also since knowledge is a prerequisite of learning, therefore it is effective management can result can add value to its service or products, thus improving its overall performance and giving a competitive edge to it.