Knowledge

Overview

Companies gain a competitive advantage through proper development and use of knowledge management. In order to conduct successful business practices in the 21st century companies must understand the difference from doing to knowing business (Housel and Bell, 2001).

This research project will answer several questions such as, what is knowledge, intellectual capital and how does knowledge acquire value in an organization. The outcome of the analysis will conclude with understanding the worth of information in an organization and the importance of knowledge in the business sector.

Discussion

Defining Knowledge

The wikipedia encyclopedia defines knowledge as the awareness and understanding of facts, truths or information gained in the form of experience of learning (Wikipedia, 2005). The word knowledge also serves as information that has a purpose of use. Knowledge is power and referred to something that takes action when applied (Reinan, 2005). While others such as, John Creswell (2003) warrants knowledge as conjectural with a scientific method approach. This approach refers to knowledge as imperfect and fallible, making it difficult for the absolute truth to be discovered. According to a business article in American Society for Training and Development (ASTD), knowledge consists of twelve principles (Allee, 2001).

Understanding. The ASTD states in order to understand knowledge one must learn how to manage knowledge effectively (Allee, 2001). The twelve principles about knowledge include the following: (1) Knowledge is messy (2) Knowledge is self-organizing, (3) Knowledge seeks community, (4) Knowledge travels via language, (5) The more you try to pin knowledge down, the more it slips away, (6) Looser is probably better, (7) There is no one solution, (8) Knowledge doesn’t grow forever, (9) No one is in charge, (10) You can’t impose rules and systems, (11) There is no silver bullet, and (12) How you define knowledge determines how you manage it.

Principles. The first term states knowledge is messy; due to its entanglement with everything, we know and do (Allee, 2001). The author states knowledge as a self-organizing principle around organizations or groups. It seeks community because it is waiting to be born or happen, a prime example of this is the Internet. Knowledge travels via language through constant development of languages, communications and experience included in daily work schedules. Another important fact about knowledge lies in its inflexibility and requirements. Often one will try to restrain knowledge through patents and other forms of official documents, only to find that too much control leads to loss of originality. Also by tightly controlling resources, time and energy can be lost when monitored too tightly. Experts agree that looser is probably a better solution overall when dealing with knowledge.

Next, when dealing with knowledge it would be wise to learn that there is no one solution (Allee, 2001). Since the beginning of time, knowledge has continually changed and will continue to do so. Although, at some point one must except that knowledge does not grow forever, meaning eventually it may vanish or pass away. This theory compares to the natural life span on the earth. Allee (2001), further states knowledge as a shared method and no one can claim responsibility or impose rules and systems on it. Overall knowledge will take care of itself when left alone, due to its self-organizing ability. Moreover, knowledge works at best when managed properly. Knowledge can present itself in various ways, forms, categories, but ultimately it depends on how one uses it to gain the best results.

Forms. Knowledge exists in two forms, explicit and tacit. Explicit knowledge presents a concise clear to the point appearance (Srikantaiah & Koenig, 2000). This knowledge is tangible, often found in commercial publications, organization business records, email, web, intranets, groupware, databases and self-study materials. Explicit knowledge provides an external and internal form. Whereas tacit knowledge involves a different concept, involving peoples awareness, with the use of internal staff and outside experts. Srikantaiah & Koenig, (2000), states that knowledge involves face-to face conversation, telephone conversation and individual knowledge. Both explicit and tacit knowledge bring essential contributions to one another.

Categories of Knowledge
Individual Knowledge. According to Housell and Bell, (2001), knowledge management can be born, die, be owned and placed into various categories. Since an explanation of knowledge has been defined and broken down into twelve principles, two forms, it now can be simplified into four major groups to include, individual, group, organizational and extra-organizational knowledge. Individual knowledge consists of a wide view of ideas of what is believed to be true. For instance, an item of information fixated by a research scientist or adults on the planet provides knowledge further in detail. Individual knowledge can also be defined as a set of rules, beliefs, attitudes, speculations, lifestyle choices and habits, in which shapes a persons environment (Housell and Bell, 2001). Another important detail with individual knowledge attributes in the ability to differ from animals. Unlike any other animal, the human being has the innate ability to imagine, store, and influence ideas. Human beings are born with individual knowledge and once developed throughout life, it serves as an asset to employers, leaders and companies.

Group Knowledge. Group knowledge exists as knowledge that pertains to a certain selection of individuals in a cluster. It may take the form of various ideas, skills and processes. For example, group knowledge may refer to certain proficiency that college students or business professionals hold. Another important area to group knowledge focuses on people knowledge. According to Housel and Bell (2001), people knowledge allows individuals from various forms the dexterity to work together in companies. Housel and Bell (2001),further states, “knowledge management brings people knowledge to visibility and to a position of prominence in a frame work for understanding and using knowledge within a corporation” (p. 12).

Organizational Knowledge. Organizational knowledge applies to information specific to a particular corporation. According to Housel and Bell, 2001 organizational knowledge can also be reflected as “creative reserve in the form of human resources and computer systems” in today’s businesses (p.9). Other examples include sole information to the organization and their internal operations, shared by its employees.

Intellectual Capital. Intellectual capital or knowledge capital links to knowledge resources (Srikantaiah & Koenig, 2000). Knowledge capital falls into three categories, which include knowledge, social and infrastructure capital. Intellectual capital includes a company’s tacit and explicit knowledge about the organization. As reviewed earlier explicit knowledge provides tangible information and tacit knowledge involves people’s knowledge. By combining knowledge capital with tacit and explicit knowledge, the entire structure of an organization exists. Knowledge capital in the future will depend on meeting and understanding the demands of knowledge which resides within the employees, suppliers and customers (Cairncross, 2002). By incorporating knowledge as assets into the workforce companies mature and develop new ways of learning. Furthermore, intellectual capital may exist in several forms to include embodied, embedded and represented (Srikantaiah & Koenig, 2000).

According to Srikantaiah and Koenig, (2000), embodied is defined as a type of knowledge which presents itself in the minds of knower, and different communities. Often, embodied knowledge is tacit based on the communal familiarity, insights, and situations of individuals and groups. Knowledge resources in the embedded form include daily routines and job responsibilities. Moreover, represented knowledge includes separate articles, rather than procedures or plans. Other mentionable sources of knowledge include social and infrastructure capital. Social capital includes organizational culture, reputations, trust and informal networks. Whereas infrastructure capital includes knowledge management applications, LANS, WANS, intranets and servers.

The value of knowledge in organizations

Values. More than ever companies incorporate knowledge into everyday activities. For instance, within the business world, companies rely on knowledge-based systems (Gaffney & Dobrow, 2004). Knowledge management and information is today’s competitive advantage in business. Customer’s can help businesses gain useful knowledge to any corporation by gaining insight. Often companies will enforce changes within the companies to gain value.

In 1992, “BP Amoco an oil company downsized and restructured its company into a learning organization where people, teams, and informal networks generate and share knowledge to add value to what they do” (Worley & Cummings, 2001). This type of company compares to an learning organization since a strong emphasis was placed on effective knowledge of workers to turn the organization around. Other ways in which knowledge acquires value in the organization focuses on customer value (Peppers & Rogers, 2004). Companies must realize the magnitude of maximizing a customer’s value through knowledge and trust within the company. By capitalizing knowledge and value within a firm, a company will gain full results of its customers. Another unique idea for creating value consists of the employer placing themselves into the customers needs, and then meeting it accordingly. For companies to increase success levels, it is imperative to achieve the trust of the customer.

Conclusion

Opinion. Companies that properly understand knowledge management gain a competitive advantage within today’s work force. Without the proper use of knowledge management in business, companies will fail. By properly understanding how to use, knowledge and intellectual capital in the 21st century will prove crucial for survival. Also by learning how to effectively apply knowledge and acquire value within a particular organization will guarantee a successful business plan. A victorious company will learn the advantage of mastering knowledge. Lastly, the company of the future will be able to distinguish between doing and knowing business for continued success and endurance.



References

Allee, V. (2001). American Society for Training and Development. 12 Principles of Knowledge
Management. Retrieved January 15, 2005 from http://ecorse.hpu.edu/13392500510/12Principles.htm

Cairncross, F. (2002). The company of the future: How the communication revolution is
changing management. ACM . Retrieved January 18, 2005 from http://www.acm.org/ubiquity/book/f_cairncross_1.html

Creswell, J. (2003). Research design. Qualitative, quantitative, and mixed methods approaches

Cummings, T. & Worley, C. (2001). Organization development and change. Mason, OH: South-western college publishing.

Gaffney, J. & Dobrow, L. (2004, December). Profit growth: Turning data into action. 1 to 1 Magazine.

Housel, T. & Bell, A., (2001). Measuring and managing knowledge. New York, NY: McGraw- Hill/Irwin.

Peppers, D & Rogers, M. (2004 Dec). Trust stakes its claim to customer value. 1 to 1 magazine.

Reinan, J. (2005, January 17). The pursuit of knowledge. Star Tribune. Retrieved January 18, 2005, from http://www.startribune.com/dynamic/story.php?

Srikantaiah, T. & Koenig, M. (Eds.). (2000). Knowlegde management for the information professional. Medford, NJ: Information Today, Inc.

Wikipedia. (2005). Knowledge. Retrieved on January 17, 2005, from http://www.wikipedia.com