The Concept of Knowledge Management

Knowledge is a concept of realizing and understanding the patterns and implications of existing data and information (Filemon & Uriarte, 2008). In general, there are two types of knowledge: tacit knowledge and explicit knowledge. Tacit knowledge is a knowledge that resides in the human brain and is difficult to articulate in words, text, and drawings (Laudon & Laudon, 2014). On the contrary, explicit knowledge is the knowledge that is resided in documents, databases, memos and other forms of storage. Primarily, knowledge is known to be one of the intangible assets of an organization (Laudon & Laudon, 2014). In an organization, knowledge is being generated in gathered through various mechanisms of ‘organizational learning’ such as data collection, experiment, and feedback.

Organisational learning can be defined as the process of change in which organizations can sustainably improve their utilization of the accumulated knowledge in response to the turbulent environments (King, 2009). Typically, organizations are not able to fully make use of the knowledge that they possess. However, through knowledge management (KM), organizations may seek to obtain or generate knowledge that may be useful and to make it readily accessible to those who want to use it.

Knowledge Management (KM) has been revolving around the interest of many disciplines since the last decades (Wiig, 2000). Database technologies, organizational science, decision support system, performance support systems and web technologies are among the disciplines of KM (Dalkir, 2005). Owing to the multidisciplinary nature of KM, the phrase ‘Knowledge Management’ is too complex to be explicated into a universal definition. Nevertheless, to put it simply, the concept of KM is technically involved a cyclical process of creating, capturing, using and sharing knowledge (Filemon & Uriarte, 2008). Nowadays, the management of knowledge has become one of the fundamental factors for the organizational survival and competitive advantage (Jeon et al., 2011; Omotayo, 2015). Fundamentally, there are four key components of KM that is — knowledge, people, technology and process (Desouza, 2011). Nonetheless, the success of an organization may be subjected by its ability to leverage its knowledge-based assets.

According to the historical perspective of KM, the classical evaluation of KM came into light in the 1970s (Filemon & Uriarte, 2008). The work of Peter Drucker and Paul Strassman highlighted that information and explicit knowledge are considered as valuable assets of an organization. Whereas, the work of Peter Senge emphasized the learning organization and managing knowledge. However, in the late 1970s, Everett Rogers and Thomas Allen laid the basis of understanding on how knowledge is generated, implemented and integrated within the organization. Although the notion of knowledge as a competitive advantage emerged in the 1970s, it was in the mid-1980s that this notion became more and more evident. During this period, Peter Drucker and other writers developed the ideas of managing knowledge that dependent on artificial intelligence and expert systems. This development had brought to such a concept of “knowledge acquisition”, “knowledge-based system” and other computer-based entities.

Consequently, these also led to the further rapid growth of knowledge managing systems. Later in the 1990s, a number of large management consulting firms had started to launch in-house knowledge management (KM) initiatives (Filemon & Uriarte, 2008). Moreover, as knowledge management gained attention among corporations and organizations, the number of articles, books, and press being published has escalated significantly. In 1994, the International Knowledge Management Network (IKMN) based in Europe went online and shortly after followed by the Knowledge Management Forum, United States. Subsequently, numerous other KM-related groups and publications started to make an appearance. By the end of the 1990s, knowledge management projects had become big business for major international consulting firms that implemented “knowledge management solutions”. For instances, Ernst & Young, Arthur Andersen, and Booz-Allen & Hamilton. This can be attributed to the failed Total Quality Management (TQM) and other business process initiatives which in turn making knowledge management (KM) a very desirable alternative. The evolution of knowledge management (KM) is comprised of two generations. The first generations of KM were predominantly technology driven whereby it mainly involved the process of capturing knowledge. However, the non-fulfillment techniques of the KM first generation had prompted theorists to further investigate the course of action how knowledge is created and shared.

Accordingly, the second generation was essentially concerned with people, behaviors and working style instead of focusing on the application of technology. Nevertheless, in the present time as well as the future perspective of KM, the use of technology is becoming ever more indispensable. Nowadays, with the emergence of smart technology may exert a great influence on how we work, learn and interact. John Bordeaux, an associate partner of IBM Global Business Services in Social Knowledge Management stated that smart technology will affect KM over the next three years and change the way people, as well as organizations, incorporate technology into the decision-making process. (Trees, 2015). Bearing in mind the dynamic nature of knowledge today, knowledge management (KM) has become the focal point and necessity for organizations (Omotayo, 2015). The need for managing knowledge in the organization can be accounted for by various driving factors in the environment. For instances, the effect of globalization, technological advancement, highly competitive marketplace as well as an aging workforce (Wiig, 2000; Dalkir, 2005; Omotayo, 2015).

According to Ridge (2007), organizations that can effectively manage and leverage their knowledge are more likely to perform better. In addition, the knowledge management (KM) plays a significant role in governing innovation at the organizational level (Ridge, 2007; Du Plessis, 2007). For instance, by encouraging open innovation culture through sharing knowledge and work collaboration among employees as well as other external parties to develop new ideas. Through innovation, the organization will able to differentiate itself from its competitors and will help (Desouza, 2011). Based on a study conducted by Forbes in 2004, Fortune 500 companies suffered financial loss amounted to $31.5 Billion a year by failing to share knowledge (Babcock, 2004). At the management and individual level, people often engage with decision-making process on a daily basis. Therefore, the successfulness of the organization may be dependent upon the competencies of the managers and employees in making a decision and solve the problem. Moon and Desouza (2011) stated that managers will have a better chance of making decisions when there is more accurate knowledge available.

Consequently, KM is often described as a strategic management tool for the organization in managing collective information of employees’ expertise (Martensson, 2000). In order to create and implement KM as a strategic tool in the organization, it is extremely crucial to align the KM strategy with the organization mission, goals, and objectives (Gao et. al, 2008; Oluikpe, 2012). Furthermore, the successful organization’s implementation of KM is also associated with culture and people as people is essentially the source of knowledge (Oluikpe, 2012; Hislop, 2013) In essence, knowledge management (KM) can provide privileges to the organization such as an effective decision-making process, competitive edge, and survival.

Nevertheless, implementing it successfully may be a challenge and often associated with countless failures for many organizations. Therefore, implementing knowledge management (KM) may not always be essential for all organizations. In fact, adequate management support, particularly from the top level management is required in order to achieve great success in implementing KM in the organizations (Mayo, 1998; Pettersson, 2009).