Declarative and procedural knowledge (Courtney, 2001), relate to two important concepts in knowledge management, which are, ‘know what’ and ‘know how’. The former is in essence, facts and statements, for example, knowledge about the firm’s current turnover, while the latter is more specialized knowledge, relating to ‘know how’, e.g. how to analyse a financial statement. This involves putting the ‘know what’ into practice, which is perhaps more important; individuals have the ability to do this because of the experience they have accumulated which gives them the tacit knowledge to deal with ‘know how’ (Little, et al., 2002). A very basic type of knowledge related to the working of an organisation is core knowledge, i.e. knowledge that is, ‘that minimum scope and level of knowledge required just to "play the game"’ (Zack, 1999). Having that level of knowledge and capability will not assure the long-term competitive advantage of a firm, but does present a basic industry knowledge barrier to entry. Core knowledge tends to be with members of an industry and therefore provides little advantage, other than over non-members. Advanced knowledge enables a firm to be competitively viable. The firm may have generally the same level, scope, or quality of knowledge as its competitors although the specific knowledge content will often vary among competitors, enabling knowledge differentiation (Courtney, 2001).
A survey by Reuters found that ninety percent of companies that deploy a Knowledge Management solution benefit from better decision making. Eighty percent said it increased productivity (Marwick, 2001). Knowledge management is a diverse issue that emerged in the mid-1990s and has become a much-debated issue. In recent years organisations seem to have evolved and developed and are now concentrating on developing their competitive advantage by concentrating on knowledge management. The reason for this as suggests the article: “The most important issues in KM” is that “We need to connect our people much better so they can, more effectively, meet, team, and share through networks” (King, et al., 2002). Sharing leads to an increase in company efficiency and saves time because knowledge is not be created anew every time an individual starts a project as they can reuse knowledge that is already available to them. Therefore, knowledge management sees the work force as the most important asset the company owns and research has shown that forty two percent of corporate knowledge is locked in the brains of employees and needs to be extracted and made accessible by implementing effective knowledge management software (Baltazar, 2002).
Several different factors need to be taken into consideration while discussing the issue of knowledge management. Some of the most important ones, as suggested by King (King, et al., 2002) is the fact that knowledge management provides a strategic advantage. For firms to have a competitive advantage the effective management of knowledge is vitally important, because possessing and exploiting the knowledge that their competitors do not have, will lead them to become more innovative and efficient. However, before knowledge is utilised effectively in an organisation there are certain fundamental issues that need to be taken into consideration. One of the most important points is to get the staff to participate in the exchange of knowledge. This can be problematic, since the idea of sharing knowledge is foreign and therefore incentives have to be set up for people to participate (Hansen, 2002). One of the ways to do so is to get the top management involved. Psychologically, workers on the floor are hesitant to contribute their ideas to their superiors, especially if they are not in constant contact with them. However, this problem can be solved if management are more accessible and maybe even ask for help and advise from their workers. If this type of system is in effect then knowledge will freely flow throughout the organisation and new knowledge will be generated constantly, which in turn will increase the firm’s competitive advantage (Hansen, 2002).
Another way of effective knowledge management in the organisation is to set up and encourage communities of interest (Davis, 2002). These are groups of people who share the same type of vocation or interest; an example would be a particular department in a firm. By setting up a community of interest this department will be able to share and access knowledge with the same department in other parts of the world; them posting information on the Internet that can be accessed by other relevant people can achieve this. Therefore, the knowledge that one department has acquired through their experiences can be used by other departments who come across the same types of problems and they will have the advantage of not going through the same type of trial and error (Little, et al., 2002).
One of the major issues that need to be considered in the management of knowledge is the identification of organisational knowledge, which can be, and needs to be captured. That is an important issue in knowledge management: what knowledge can be captured and information that cannot be captured. An example of knowledge that cannot be captured is some parts of a telephone conversation. A telephone conversation is full of current and up to date knowledge, and the conversation can be recorded to reuse the knowledge that has been created or mention on the telephone. However, if none of the conversation is recorded, and therefore, the knowledge that is created can be quite easily lost and is not captured. There are certain elements of a telephone conversation that cannot be captured, these include all the reactions of the people involved in the conversation, these might range from yawns to furrowed brows, or nodding (Thomas, et al., 2001). On the other hand, an example of knowledge that can be easily captured is company details, e.g. name and address and their customers. The former is also related to the issue of knowledge currency (King, et al., 2002). Up to date knowledge is extremely important to organisations, since knowledge is constantly being generated and new knowledge can become old knowledge relatively quickly which means organisations can loose their competitive advantage to the other players in the market.
Other issues that an organisation has to think about are if they have the software and the infrastructure to actually implement knowledge management in the firm in a successful manner, for example if a firm does not even have networked PCs then they will not be able to set up effective knowledge management systems. Knowledge is one of the company’s biggest assets and when it is so centralised, the opportunity and temptation to use it inappropriately is great (Hansen, 2002). Therefore, managers have to address this issue and weigh up the costs and benefits of having a secure system in place and question the advantage of having a knowledge management system in place; is it going to be worth installing both financially and strategically.
There are major obstacles to the management of knowledge. The most important one is the people in the organisation. Knowledge is in people’s heads and therefore, without them there would be no flow of knowledge. People can be obstacles to knowledge management if they do not seek advice and learn from others; this could be because of psychological reasons such as pride or maybe because the environment is not the one that encourages a flow of the knowledge (Baltazar, 2002). There is also an inability to find expertise in the organisation at the right time. There is always somebody who knows the answer to a problem, but it may be nearly impossible to connect the person who has the expertise with the one who needs it. However, these obstacles can be easily rectified with efficient knowledge management systems and also by the top management taking an active interest in the issue of knowledge management (Marwick, 2001).
Baltazar, H. (2002) Overcoming KM's obstacles eWeek, 19, 43-45.
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Davis, A. (2002) Knowledge management - The four pillars of success Biopharm-the Applied Technologies of Biopharmaceutical Development, 15, 44-+.
Hansen, M. (2002) Knowledge Management: Turning the lone star into a real team player: Electronic tools and other initiatives designed to enhance the sharing of information are useless unless the co acknowledges a fundamental need: fostering a culture of collaboration between units and employees The Financial Times, 14.
King, W. R., et al. (2002) The most important issues in Knowledge Management Communications of the ACM, 45, 5.
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