Essay on Strategic Importance of Knowledge Management

6590 Words May 12th, 2005 27 Pages

Today the world has more and more of free flow of information leading to transfer of knowledge from a person or an organization to others. Whereas this invariably leads to faster development, it also impacts the competitive advantage held by the innovators of processes or technology. It has therefore become strategically important for one and all in business to understand the knowledge, processes and controls to effectively manage the system of sharing and transferring the information in the most beneficial fashion.

This paper dwells upon definition, types, scope, technology and modeling of knowledge and Knowledge Management while examining its strategic importance for retaining the competitive advantage by the
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Tacit knowledge
Tacit knowledge (Polanyi, 1962) is a form of skill, ability or ‘‘techne'', i.e. know how, which is difficult to communicate to others as information, but "much of what Michael Polanyi has called tacit knowledge is expressible – in so far as it is expressible at all – in metaphor" (Nisbet, 1969). In the context of tacit knowledge, Drucker (1993) opines, "the only way to learn techne was through apprenticeship and experience". David and Foray (1995) also stress that no knowledge is tacit by nature, what has to be done is to create incentives to make tacit knowledge communicable. Polanyi (1962) says that this sort of knowledge also can be regarded as connoisseurship. Such knowledge is deeply rooted in employee experience or in company culture making it more valuable in sustaining the competitive advantage because it is much harder for competitors to imitate. Hidden knowledge
Hidden knowledge influences the way we think and act, as a sort of personal paradigm, or the technical–economic paradigm in the business world, a trajectory which leads our way of thinking and acting when expressing and interpreting, among other things, new ideas. Hidden knowledge organizes the development of mental models, the nature of the abstraction we make, the choice of variables, problems or phenomena, the facts we choose to focus on, our underlying metaphysical positions, our theoretical ‘‘tastes'' etc. Support for the concept ‘‘hidden knowledge'' is found in

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