After reading this article you will learn about:- 1. Meaning of Knowledge 2. Transition from Information Value to Knowledge Value 3. Forms.
Meaning of Knowledge:
Knowledge is an important source to create learning environment in the organisation, at all levels and all areas. When there was shift from industrial economy (based on hierarchical control) to the global decentralised, information driven economy, knowledge became an important resource for the organisations. Organisations at the global level maintain their corporate identity irrespective of geographical distances, linguistic and cultural differences.
They can acquire tangible assets like land and building at competitive prices in global markets but cannot acquire intangible assets like organisational competencies, image and reputation. The value of these assets is bound to the specific organisational context.
They develop these assets to compete in the global markets by developing their core competencies (skills and capabilities of the organisation) and enriching them with knowledge of the local communities that participate in their global workplace. Managers should recognise the value and manage that base of knowledge.
They sponsor training and development programmes so that people can create the required knowledge base. “Cultivating a learning culture in which organisational members systematically gather knowledge and share it with others in the organisation to achieve better performance is knowledge management.” Knowledge management is closely associated with intellectual capital and learning organisation.
Knowledge is the foundation of organisations in the 21st century. During previous decades, economies of scale, marketing, customer service etc. decided the success of an organisation. Today, companies are shifting from natural resources (assets) to intellectual assets.
Business executives examine their knowledge base and recognise that stock of human capital is more important than any other resource. As companies are moving from natural assets to intellectual assets, executives examine the knowledge underlying their businesses and use it for their growth and development.
Knowledge management is an extension of traditional business philosophy. It was practiced even in the past when commercial wisdom was passed by family business owners to their children; craftsmanship was passed from traders to their apprentices.
The term ‘knowledge management’ gained momentum when the economies became industrialised and experienced a shift from natural assets to intellectual assets. Use of knowledge has become important in the context of contemporary global learning organisations which rely heavily on intellectual capital.
Transition from Information Value to Knowledge Value:
Knowledge management embodies a transition from industrial age to knowledge age.
1. Industrial age:
Up to 1960’s, business was dominated by industrial production. Those who produced more were considered successful businesses.
2. Information age:
The period of 1960’s to 1990’s was the information age. Technological systems were considered as key components guiding the business processes. Human beings were viewed as passive resources to process whatever information was available in the data base.
3. Knowledge age:
In 1990’s, knowledge age superseded the information age. Today, work is knowledge based. People are key components that continuously assess information assimilated in the technological systems. They engage in active process of sense making to assess the effectiveness of information used for organisational functioning or decision-making.
For example, business activities in customer service, information system, finance, HR management etc. are totally knowledge based. In manufacturing industries also, much of the production work revolves around computer-aided techniques, whose use requires human brain.
Forms of Knowledge:
“Knowledge is multifaceted and complex, being both situational and abstract, implicit and explicit, distributed and individual, physical and mental, developing and static, verbal and encoded.” — Blackler
Knowledge has various forms.
It can be:
Embedded knowledge:
This form of knowledge is formed in rules and procedures of the organisation.
En-cultured knowledge:
It represents knowledge present as values, beliefs and collective understanding amongst people in the organisation.
Embodied knowledge:
It represents the practical knowledge applied by organisational members based on their competence and skill.
Embraced knowledge:
It is the conceptual knowledge of members based on their cognitive skills, that is, skills distinct from those of emotions.
Nonaka and Takeuchi categories forms of knowledge as:
1. Explicit knowledge:
It is formal knowledge contained in documents like reports, articles, manuals, pictures, video, sound, databases, corporate intranets, software etc. It defines the identity and competence of the organisation. It is articulated knowledge which can be codified – the words we speak, the books we read, the reports we write or the data we compile. It is visible information which can be communicated and shared with others through various communication media.
2. Tacit knowledge:
It is personal knowledge that a person gains through experience. It is shared and exchanged through verbal contact. It is practical knowledge that is key to getting things done. It prevails in people’s mind and is difficult to articulate in writing. It includes intuition, perspectives, beliefs and values that people develop and form as a result of their experiences.
It embodies technological expertise, operational know-how and judgment about how to run a business. Tacit knowledge is made of collective mindset of people in the organisation. It shapes the ways leaders of the organisation perceive their industry and firms placed within it. It determines how the organisation makes decisions and shapes collective behaviour of the members. It is invisible, personal and difficult to share or communicate with others.
Explicit knowledge defines the identity, competence and intellectual assets of the organisation independent of its employees. Thus, it is organisation knowledge par excellence, but it can grow and sustain only through a rich background of tacit knowledge. Both these types of knowledge are important for growth of the organisation.
Knowledge management aims at converting tacit knowledge into explicit knowledge. Business sense in people’s minds is to be documented in reports and databases so that everyone can have access to it and apply it in the best form, wherever necessary.