Knowledge Management as a Part of Modern Business Strategy (Essay Sample)

Knowledge Management
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Introduction
According to Garcarz, Chambers and Ellis (2003), knowledge management has become a major part of modern business strategy. More than ever before, knowledge has become a critical asset to any firm. How well a firm manages its knowledge determines how well the firm is going to be successful in the future. Unfortunately, knowledge management is not easy. To understand why knowledge management may not be easy for most firms it is necessary to identify a number of issues that regard knowledge in the context of a firm
Knowledge is not information
Information is easier to capture in any form whether inside a computer database, or even in printed materials (Gupta, 2008). Unfortunately, this is not the same for knowledge. Knowledge seems to be more elusive and harder to capture. Organizations may have massive databases that have a lot of information, but this does not necessarily mean that they have enough knowledge in the firm (Smith, Araujo, & Burgoyne, 1999). Information systems theory, knowledge is a derivative of information. Information starts with bits of data, the data can be transformed into information and the information can be transformed into knowledge and eventually into wisdom. However, by the time this process is reaching the knowledge level, most of this knowledge will be in the employees’ heads and not in the database. So the biggest knowledge that any firm has to answer will be on how to transform this manage this fluid knowledge.
Knowledge can be tacit or explicit
The fact that knowledge can be tacit makes it even harder to manage. Explicit knowledge is easier to manage especially because it can easily be shared between the workers. However, the tacit knowledge is harder to manage as it is likely to be confined in the head of the works who own it. This tacit knowledge comes in the form of experience that the worker has been able to acquire over time while working for an organization.
Loss of knowledge
Organizations are likely to lose knowledge when an employee who has the knowledge moves away from the firm. For instance, if an employee decides to resign, or the firm decides to fire him or her, the knowledge that such an employee had is no longer available for the firm and this can have devastating impacts on the firm. The death of an employee will also cause such a loss of knowledge to the firm.
Yet, this knowledge can be critical to a firm. For instance, in a financial investment firm, if a employee has been working there for a long time and had gained a lot of experience and knowledge about financial trading, losing such an employee would be devastating to a firm. It would be even harder on the firm if the employee decides to join a competitor.
Knowledge management
Knowledge management involves capturing, developing, and sharing knowledge within an organizational environment with an intention to effectively apply it for business strategic advantage. This process is not easy and can be financially intensive especially due to the resources that the firm may require in order to make sure that it has been able to achieve this (Senge, 1990).
In this regard, comparing and contrasting between the knowledge intensive professional organizations and the non-professional organizations may indicate which of these are likely to face challenges with regard to their knowledge management.
Knowledge intensive firms
Three major factors are likely to make these kinds of firms to be have less challenges in managing their knowledge
Higher retaining of knowledge workers
Big and professional firms are likely to have a low level of employee turnover. Whilst this does not in itself guarantee that effective knowledge management, but it does however guarantee that the firm will be able to maintain most of its knowledge (Marquardt, 2011). It is obvious that since most of the knowledge that a firm has is tacit, this knowledge is tangled with the employees and that if the employees leave the firm, they are likely to leave a gap in the firm’s knowledge management strategy. Professional firms are more likely to retain their employees and have lower employee turnover and this goes a long way in making sure that the knowledge of the firm is not shredded in bits. Moreover, a firm with low employee turnover has more chances of creating more knowledge (Stahl, 1993). As identified, knowledge is a derivative of information.
Employees create this knowledge as they go about their business and interact with the information that the firm has (Vanbuel & Scheffknecht, 2000). The longer the employee stays in the firm, the more knowledge they are likely to create as time goes on. On the other hand, if the employees continue to leave the firm at a higher rate, they are not able to stay in the firm long enough to create new knowledge for the firm. Furthermore, they are likely to join a competitor and divulge the knowledge they gained from the firm. Considering that this knowledge is supposed to be a source of strategic advantage, when the employees leave the firm and divulge the knowledge to the competitor, this creates a disadvantage to the firm that lost the employees (Westen, 2009). Big and professional firms therefore have the advantage of the fact that they are less likely to lose their employees. Employees in such firms have all they need because these big firms are able to pay them well, offer them career growth and even give them better working conditions. These factors are likely to motivate an employee stay in the firm for longer, or even for the rest of their lives and this can be of help in the firm with regard to its knowledge strategy (Soliman, 2015).
Knowledge-sharing Culture
These firma are more likely to have a knowledge-sharing culture and this helps a lot in managing their knowledge. As seen in the definition of knowledge management, one major and important aspect of knowledge management the creation and sharing of knowledge (Graham, 1996). A firm that has a knowledge sharing culture is more likely to be able to have fewer challenges in managing its knowledge. In this regard, most knowledge intensive firms are able to manage their knowledge better because they are more likely to have a culture where the creation and sharing of knowledge is encourages among the employees.
Professional networks
These professional and knowledge intensive firms are more likely and able to help their employees to join professional networks (Morey, Maybury, & Thuraisingham, 2002). As Christensen (2003) says, professional networks help a lot in knowledge management in that they encourage a knowledge creation and knowledge sharing culture not only within the professional network but also in an organizational environment. At the same time, some of the professional networks can be expensive to join and retain and since these large organizations are able to finance this, their employees are more likely to be able to join and remain in these networks. Smaller and non-professional firms on the other hand are less likely to be able to join these professional networks, which make it harder for them to be able to have better ways to manage their knowledge base (Burden, MacIntosh, & Srikantaiah, 2000).
Better structure that help in creating and retaining knowledge
Professional and knowledge-intensive firms are more likely to have better ways to manage their knowledge base. The structure and culture within these firms are able to help the firm to have better management of their knowledge (Wallace, 2007). These firms have more structured organization and this, whilst it may be a hindrance to knowledge sharing also offers the firm with a better way to apply knowledge management. This is very important in a situation where the firm is dependent in the knowledge as a strategic tool. It is also necessary to note these professional firms are more likely to depend on knowledge for strategic advantage than the smaller non-professional firms are.
Financial muscle to implement the systems that are necessary for knowledge management
Knowledge management is not an easy thing for most firms to implement. In most cases, it involves the acquisition of Information Technology systems in order to implement the knowledge management (Handzic, 2004). The equation of these systems and even the maintenance of the same is an expensive financial affair that only the bigger firms are able to incur. By being able to buy the systems that are critical to managing knowledge in a firm, this places them ahead of the smaller non-professional firms. The costs in implementing these systems come in many ways. For instance, the cost of acquisition of comprehensive information system that will help the firm to manage its knowledge can be very expensive (Hobohm, 2004). Not only that, the systems analysis that needs to be done prior to acquiring these systems can be themselves very expensive as it requires employees experts (system analysts) who will be able to carry out proper systems analysis. Failure to carry out a proper systems analysis can lead to problems and can even lead to the whole system failing. When such a system fails, the losses to the firm are very high since a failed system has no value to the firm and cannot be resold to recover all, or even part of the cost of the system. In this regard, only the big firms are able to finance such big acquisition and therefore benefit from the benefits that these systems give the firm with regard to its knowledge management.
However, while these firms have these advantages, they also have an array of disadvantages that may make them find it harder to manage knowledge (Handzic, 2004). In fact, the same factors that make this firm to be able to be in a better position to manage their knowledge base may also act as hindrances to preve...