Definition: Knowledge Management implies the effective governance of organization’s acquired and generated knowledge relating to technical know-how, insights, experiences, strategies and tactics. In finer terms, knowledge management is the process of handling organization’s knowledge efficiently, so as to create value and fulfil strategic objectives.
Knowledge Management aims at identifying, acquiring, creating, assessing, organizing, utilizing, storing, transferring, and protecting the knowledge and information of the firm.
It follows an integrative approach by effectively utilizing the organization’s knowledge base in association with the individual skills, competencies, experiences, ideas, etc. to achieve the goals of organization.
What is Knowledge?
- Data: Data is the set of raw facts and figures, which convey some meaning, but it lacks systematic arrangement, due to which it is difficult to interpret.
- Information: When data is systematically organized, contextualized, calculated and summarized, it turns out as information. So, it is the refined form of data which is relevant and useful to the organization. It is often stored in documents, files, pdfs, drives, etc.
- Knowledge: Knowledge means to have proper understanding, sense or awareness of something, i.e. competitors, customers, product, service, employees, suppliers, government policies, economic conditions, etc. which is gained by learning and experience. It is of two types:
- Explicit Knowledge: Knowledge which is available in codified form, i.e. it is stored or recorded in books, files, folders, registers, databases, etc. and communicated through a medium.
- Tacit Knowledge: This form of knowledge is not easy to define, as it is the intuitive knowledge, based on experience, practice and value. However, it helps in achieving long term competitive advantage, as it lies with the person who looks after, manages and decides everything. It is hard to transfer, as there is no way to extract such knowledge and record the same in documents so that a beginner can go through it and become an expert.
- Embedded Knowledge: The form of knowledge which is secured in process, rules, product, manuals, routine, techniques, methods, code of conduct and organizational culture is called embedded knowledge.
- Wisdom: Wisdom is the ultimate outcome of knowledge, which refers to the ability to judge or interpret things accurately. so as to make rational decisions.
Knowledge Management specifies what a firm knows, and what it needs to know, so as to become competitive.
Objectives of Knowledge Management
- To enable the provider of products or services to become more effective in doing business and improve service quality, increase customer satisfaction and so forth.
- To identify the most relevant and valuable knowledge and share the same with those who need it.
- To ensure that all the employees and members of the concern have a shared understanding regarding the organizational goals.
- To make sure that right amount of knowledge is provided, i.e. neither more nor less. Meaning that every person in the organization should have only that much knowledge which he/she is required to know.
- To facilitate smooth flow of knowledge in the organization by promoting enhanced knowledge dissemination with the use of both internal and external learning processes.
- To convert individual knowledge into structural asset or capital of the firm.
- To have complete knowledge of the external parties with which the company deals, i.e. suppliers, customers, competitors, distributors, creditors, banks etc.
In a nutshell, knowledge management is about making the relevant information or valuable knowledge available to the right person, at the right time and place. This helps the organizations in making sound decisions as reliable and confidential information is provided to the right person, when required.