High Dependence On Knowledge Management Commerce Essay

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Efficient knowledge management becomes day by day a very critical issue for organizations by being considered as one of the most important competitive advantages. Globalization brings more complexity into business environments and communication and information technologies are very critical for control and coordination. The knowledge sharing is even more complex and critical for multinational organizations.

Purpose: The primary purpose of the study is to gain a deeper understanding of what knowledge management is ? how it works in companies .

Method: Inductive, Exploratory, Qualitative Case Study. secondary data is collected from internet.


There is a high dependence on knowledge management in national and multnational companies. For example the risk to fall into the trap of investments for expensive IT solutions is very high for multinational companies. Multinational companies possess dispersed knowledge all around the world and it is important to recognize that most of the part of this knowledge is implied.

Knowledge management is more than creating a knowledge archive and invoking retrieving mechanisms. Those who say that organisational knowledge cannot be managed are wrong. However, it may not be easy to design and implement a knowledge management policy that serves an organisation's needs in full. There are two important considerations to face when considering a knowledge management scheme.

What do we need to know about the knowledge resource in order to manage it effectively? How will knowledge management improve the organisation?

What exactly is knowledge and how do we want to manage it?

The first point is about asking the right questions concerning the organisation's knowledge resource before designing the framework for a knowledge management scheme. The second point is about knowing what it is the organisation is going to manage and understanding the management approach to this task.


Knowledge Management becomes day by day a very critical issue for organizations by being considered as one of the most important competitive advantages.

Globalization brings more complexity in to business environments and communication and information technologies are very critical for control and coordination.

The knowledge sharing is even more complex and critical for multinational organizations. They are geographically dispersed and effective knowledge management is extremely required to survive in global competition. It is important to control and coordinate the corporations' dispersed subordinates for which IT is used as a critical tool.



Knowledge management as business activity

A brief history of knowledge management

Terms in use in current

Knowledge management today

Future of knowledge management


Need of knowledge management today

Knowledge management still an illusion

Why knowledge management is used in today scenario

Companies which uses knowledge management

Roadblocks in adoption of knowlegde management

Time to review knowledge management



Objectives of the study:

The paper will focus and deliver two main points to the reader

1st - What is knowledge management and why it is important for business today.

2nd- How this approach be deployed in real time business environment, what are the benefits and impact to the organization and its employees

Choice of topic

These days there is an increasing interest in knowledge management . It have an important influence on globalization therefore on national and multinational organizations. Hence, there are a lot of researches performed on knowledge management and IT for multinational organizations. One of the crucial topics in knowledge management is how to use IT to boost effective knowledge sharing

This topic is even more interesting for companies for which the environmental conditions are much more complex. Multinational organizations basically work across different cultures. They are involved in international projects, which require high level of communication and cross-border knowledge exchange. I am interested to learn more about multinational organizations since I believe it is an important issue for multinationals how to share in the most effective way their existing knowledge base distributed in different locations


I believe that this study would result in important conclusions for medium-level managers in organizations who are involved in continuous knowledge exchange process. Therefore during the study I took the perspective of the medium-level managers who have a valuable amount of knowledge and who are deeply involved in knowledge management and exchange.

Research approach and research strategy

Research approach defines whether researcher is clear about the theory at the beginning of the research. Deduction searches the causal relationships between variables and is performed more frequently in a scientific research. The theory is developed first and than tested. The purpose of induction is to gain an understanding of the problem. Theory is developed after data collectioMy research approach is an inductive approach. I aim to gain a deeper understanding of the knowledge management in the organizations by using different case studies. My study is inductive in the sense that I try to describe knowledge management. I started by reading existing theories about knowledge management with the aim of understanding the topic in a deeper way to set a correct ground for the study. I basically made use of the existing theory to formulate my research question and purposes.

My research strategy is exploratory. Exploratory research is about finding out "what is happening" or "to seek new insights".

Collection of data:

There are two types of data

Primary data

Secondary data

Here in this I have collected secondary data which have been used by the other person. The source of data collection is internet, magazines and news papers etc.


What is knowledge management?

Knowledge management can be described many ways, but the definition that seems best is that "the process of capturing and sharing a community's collective expertise to fulfill its mission." Knowledge management takes advantage of an organization's most valuable asset - the collective expertise of its employees and partners.

Knowledge management acts something like a library in that it provides a repository for written information on a given subject, but it also tries to make available to the organization as a whole the knowledge that is in people's heads. This knowledge may be the most valuable of all because it is put in context and it is frequently more extensive and up-to-date and, therefore, more useful for decision-making. In short, knowledge management helps ensure that the right information gets to the right people at the right time to make the right decisions.

we define knowledge management as a business activity with two primary aspects:

Treating the knowledge component of business activities as an explicit concern of business reflected in strategy, policy, and practice at all levels of the organization.

Making a direct connection between an organization's intellectual assets - both explicit (recorded) and tacit (personal know-how) and positive business results.

In practice, knowledge management often encompasses identifying and mapping intellectual assets within the organization, generating new knowledge for competitive advantage within the organization, making vast amounts of corporate information accessible, sharing of best practices, and technology that enables all of the above - including groupware and intranets.

That covers a lot of ground. And it should, because applying knowledge to work is integral to most business activities.

Knowledge management is hard to define precisely and simply. That's not surprising. How would a nurse or doctor define "health care" succinctly? How would a CEO describe "management"? How would a CFO describe "compensation"? Each of those domains is complex, with many sub-areas of specialization. Nevertheless, we know "health care" and "management" when we see them, and we understand the major goals and activities of those domains.

A brief history of knowledge management:

A number of management theorists have contributed to the evolution of knowledge management, among them such notables as Peter Drucker, Paul Strassmann, and Peter Senge in the United States. Drucker and Strassmann have stressed the growing importance of information and explicit knowledge as organizational resources, and Senge has focused on the "learning organization," a cultural dimension of managing knowledge. Chris Argyris, Christoper Bartlett, and Dorothy Leonard-Barton of Harvard Business School have examined various facets of managing knowledge. In fact, Leonard-Barton's well-known case study of Chaparral Steel, a company which has had an effective knowledge management strategy in place since the mid-1970s, inspired the research documented in her Wellsprings of Knowledge - Building and Sustaining Sources of Innovation.

Recognition of the growing importance of organizational knowledge was accompanied by concern over how to deal with exponential increases in the amount of available knowledge and increasingly complex products and processes.

By 1990, a number of management consulting firms had begun in-house knowledge management programs, and several well known U.S., European, and Japanese firms had instituted focused knowledge management programs. Knowledge management was introduced in the popular press in 1991.

Terms in Current Use

What are some of the most significant terms in current use and what do they mean within each context?

Explicit Knowledge

Knowledge that can be represented in words, drawings, plans, equations, or numbers, which can easily be communicated between people.

Tacit Knowledge

Knowledge that is not easily visible and expressible. It is hard to formalise, making it difficult to communicate or to share with others.

Knowledge Mapping

This is a process that defines the structure of domains of knowledge and the links between different domains. This is highly important in assessing risk. A particular element of knowledge could be fundamental to several other vital elements or domains of knowledge. A company is potentially at high risk of having some of its vital operations weakened if that knowledge is lost or the strength of that knowledge begins to fail.

Knowledge Auditing

This assesses where knowledge is located, in what form and at what strength. It is a vital process in project planning. It can be the single mechanism of identifying gaps in knowledge. It enables the acquisition of additional knowledge through recruitment or knowledge creation strategies and activities.

Knowledge Management Today

Knowledge management is in a state of high growth, especially among the business and legal services industries.  As the performance metrics of early adopters are documenting the substantial benefits of knowledge management, more organizations are recognizing the value of leveraging organizational knowledge.  As a result, knowledge management consulting services and technologies are in high demand, and knowledge management software is rapidly evolving.

The Future of Knowledge Management

In the next several years ad-hoc software will develop into comprehensive, knowledge aware enterprise management systems.  KM and E-learning will converge into knowledge collaboration portals that will efficiently transfer knowledge in an interdisciplinary and cross functional environment. Information systems will evolve into artificial intelligence systems that use intelligent agents to customize and filter relevant information.  New methods and tools will be developed for KM driven E-intelligence and innovation.

cycle of knowledge management:

Advantages of knowledge management

The knowledge management can help in many ways:

Helps the organization to know, what they know. For example What are the strong capabilities/ staff and facilities they have?

Knowledge manageent helps the organization to identify the concentration areas and less populated areas of knowledge.

It helps the organization to collectively, share towards fulfillment of goals and objectives of the organization. It also help find the current status of the organization as compared to the competitors.

These are also the benefits of knowledge management system

It facilitates better, more informed decisions

It contributes to the intellectual capital of an organization

It encourages the free flow of ideas which leads to insight and innovation

It eliminates redundant processes, streamlines operations, and enhances employee retention rates

It improves customer service and efficiency

It leads to greater productivity.

Why we need knowledge management now

Why do we need to manage knowledge? This question can be answer as:

Marketplaces are increasingly competitive and the rate of innovation is rising.

Reductions in staffing create a need to replace informal knowledge

Competitive pressures reduce the size of the work force that holds valuable business knowledge.

The amount of time available to experience and acquire knowledge has diminished.

Early retirements and increasing mobility of the work force lead to loss of knowledge.

There is a need to manage increasing complexity as small operating companies are trans-national sourcing operations.

Changes in strategic direction may result in the loss of knowledge in a specific area.

Most of our work is information based.

Organizations compete on the basis of knowledge.

Products and services are increasingly complex, endowing them with a significant information component.

The need for life-long learning is an inescapable reality.

In brief, knowledge and information have become the medium in which business problems occur. As a result, managing knowledge represents the primary opportunity for achieving substantial savings, significant improvements in human performance, and competitive advantage.

literature review:

Hislop (2002), states that management of knowledge is not 'simply combining, sharing or making data commonly available.' Knowledge management is based on the transfer or exchange of knowledge. Hislop (2002) refers to Bolisani and Scarso's (2000) 'language game' model which states that dialogues and language are very important to transfer knowledge.

Roberts (2000) names knowledge transfer as the diffusion of knowledge from one individual to others. Knowledge transfer occurs as a result of socialization, education and learning.

Johannessen, Olaisen, Olsen (2001) states that organizational knowledge is the result of interaction between tacit and explicit knowledge. Therefore tacit knowledge cannot be understood without the explicit part of the complete knowledge base. They argue that the challenge for companies is to make tacit knowledge of people explicit in the organization and that tacit knowledge based on personal experience can be made explicit in the organization through relationships based on thrust.

Roberts (2000) underlines the importance of trust for exchange of knowledge. Trust is subject to social environment, differs from cultures to cultures and nations to nations. Cross-border exchange of knowledge requires high level of trust which can be only a result of socialization therefore intense face-to-face relations. Face-to-face contact compensates difficulties occurring due to cultural and language differences.

Hislop (2002) emphasizes the social construction and cultural embedness of knowledge. Knowledge is not shaped by passive perceiving but by interaction with social groups. He further states that effective sharing of knowledge is directly related with wide social interactions since tacit knowledge can be only shared by high social interactions.

Organizations need to manage their knowledge base to be able to reach organizational efficiency. The most important challenge is the management of the highest level of knowledge which is tacit knowledge based on explicit knowledge. Tacit knowledge is highly dependent on the social environment and on the organizational culture. Therefore, knowledge management requires more than commonly available databases. Since tacit knowledge is alive in people, tacit knowledge can be only transferred by socialization under high level of trust. Therefore face to face communication is the most important means of tacit knowledge transfer.

Knowledge management - still an illusion

The Wall Street Journal had an article on 23rd january, 2006 the continued struggle that companies face with trying to pass knowledge from one worker to another.

In such a system, people only learn from those people they know, and in many cases there is just not enough opportunity for this type of knowledge transfer to occur (i.e., field repair workers, work at home, etc.).

Technology to help with knowledge management has had track record so far . Some companies have had success with a brute force approach - by forcing people to document what they know in a central database. They claim a virtuous cycle with people contributing voluntarily once there is a critical mass of content in those knowledge repositories.

Companies which uses knowledge management:

Companies demonstrate how organizations of various shapes and sizes overcame the deployment challenges to share knowledge within their enterprises.American companies will spend $73 billion on knowledge management software and spending on content, search, portal, and collaboration technologies is expected to increase 16% in 2008.

Knowledge management systems, which facilitate the aggregation and dissemination of a company's collective intelligence, provide numerous benefits, including enabling innovation and improving process efficiency.

In today scenario all the companies all over the world uses knowledge management. Small companies need formal approaches to knowledge management even more, because they don't have the market leverage, inertia, and resources that big companies do. They have to be much more flexible, more responsive, and more "right" (make better decisions) - because even small mistakes can be fatal to them.

Knowledge revolution hits Indian companies:

Knowledge is power and companies are realising that they can retain their competitive edge or gain by using their collective corporate knowledge wisely.

Knowledge management, as a result, is fast gaining importance.Wipro and Infosys, for instance, are putting in place several processes and methodologies to harness the wealth of knowledge they possess

Why Knowledge Management is used in today's scenario?

An organisation which embraces Knowledge Management tends to benefit in several ways, prime among them being its ability to cut cost and time. Also by distilling the knowledge, software companies have an opportunity to create IP which can be a revenue stream.

Terms such as intellectual capital, knowledge value added, and knowledge mapping are becoming a part of the knowledge landscape in the current century, says V P Kochikar, who is heading Infosys knowledge management initiatives.

Knowledge Management, is the answer to the question 'how can an organisation update and use its knowledge more effectively?'

Two often-heard myths about Knowledge Management are that it is the company's most important resource, and that Knowledhe Management is all about technology. Both are not true, as however knowledge-intensive a company's work may be it cannot survive on knowledge alone.

Infosys has a company-wide intranet called Sparsh which acts as a central information portal. The intranet consists of about 5000 nodes, spread throughout the various India-based development centres and the US-based marketing offices.

Infosys, has created a proprietary knowledge management maturity model which draws upon the SEI's capability maturity model. According to Srivastava, expertise sharing in Wipro Infotech happens through moderated group discussion, chat and discussion forums.

To promote and publicise Knowledge Management initiative internally, companies have adopted several methods.

Wipro Infotech for instance has a `saint and thief' award concept, under which both the saint (person who contributes the maximum knowledge) and the thief (the one who steals the most from the knowledge repository and deploys them) are rewarded.

Infosys has created Knowledge Currency Units which employees can earn for contribution towards knowledge sharing, accumulate and encash them for contribution to knowledge sharing.

Roadblocks to adoption of knowledge management solutions

There have been many roadblocks to adoption of formal knowledge management activities. In general, managing knowledge has been perceived as an unmanageable kind of problem - an implicitly human, individual activity - that was intractable with traditional management methods and technology.

We tend to treat the activities of knowledge work as necessary, but ill-defined, costs of human resources, and we treat the explicit manifestations of knowledge work as forms of publishing - as byproducts of "real" work.

As a result, the metrics associated with knowledge resources and our ability to manage those resources in meaningful ways have not become part of business infrastructure.

But it isn't necessary to throw up one's hands in despair. We do know a lot about how people learn. We know more and more about how organizations develop and use knowledge. The body of literature about managing intellectual capital is growing. We have new insights and solutions from a variety of domains and disciplines that can be applied to making knowledge work manageable and measurable. And computer technology itself a cause of the problem can provide new tools to make it all work.

We don't need another "paradigm shift", but we do have to accept that the nature of business itself has changed, in at least two important ways:

Knowledge work is fundamentally different in character from physical labor.

The knowledge worker is almost completely immersed in a computing environment. This new reality dramatically alters the methods by which we must manage, learn, represent knowledge, interact, solve problems, and act.

we can't solve the problems of Information Age business or gain a competitive advantage simply by throwing more information and people at the problems. And we can't solve knowledge-based problems with approaches borrowed from the product-oriented, print-based economy. Those solutions are reactive and inappropriate.

Applying technology blindly to knowledge-related business problems is a mistake also, but the computerized business environment provides opportunities and new methods for representing "knowledge" and leveraging its value. It's not an issue of finding the right computer interface although that would help. We simply have not defined in a rigorous, clear, widely accepted way the fundamental characteristics of "knowledge" in the computing environment.

Is it time to revive Knowledge Management?

David Pollard over at How to Save the World has a post on the old KM vs. the new KM. He summarizes the differences between the first and the second as:

"First-generation Knowlegde management has vainly sought one-size fits-all integrated enterprise solutions, which are complicated to use and expensive to change, and which focus on content and collection;

Second-generation Knowledge Management must look instead to simple, lightweight, cheap, intuitive, stand-alone apps, which are easy to use, add or change, and which focus on context and connection. In the shift from first to second generation Knowledge Mmanagement, the holy grail changes from cost savings to improvements in knowledge worker effectiveness."

The article also contains a list of 23 human behaviors that impede the sharing of knowledge and collaboration, and how some recent organizational and technological changes do alleviate some of those impediments. The main message he conveys is:

"The challenges we face today in getting people to share what they know and to collaborate effectively are not caused or cured by technologies, they are cultural impediments. It's extremely difficult to change people's behaviours (they usually exist for a reason), so the solutions we find have to accommodate these behaviours, and these cultures, rather than trying to 'fix' them."

But I think that he is missing a few key points.

There are two main reasons why KM has not worked in the past.

The first one that in most organizations it was a top-down exercise with a disproportionate amount of "perceived" benefits for the organization vs. the individual.

The second reason is that previous Knowledge Management tools and processes (i.e., teams, etc.) were never integrated with people's real work. That meant that KM became a "voluntary" extra-curricular activity - and guess what - most people don't do that.

For KM initiatives to work, they will have to be grassroots in nature and will indeed have to be based on lightweight tools that integrate with people's daily work. And most of the "perceived" benefits of the initiative have to be for the individual


Organizations are realizing that intellectual capital or corporate knowledge is a valuable asset that can be managed as effectively as physical assets in order to improve performance.  The focus of knowledge management is connecting people, processes and technology for the purpose of leveraging corporate knowledge.  The database professionals of today are the Knowledge Managers of the future, and they will play an integral role in making these connections possible