The continuous evolution of theory and practice has modified the existing organizational paradigms and has introduced new models which attempt to explain how information is created, transmitted, used, and managed within various organizations. Many authors have outlined the fact that information no longer represents the most important asset of a firm. In the present competitive conditions, the managers must also consider knowledge and its relationship with enterprise information systems (Gray & Densten, 2005; Jorna, 2002; Nonaka & Takeuki, 1995). Using both a theoretical and empirical approach, this study attempts to investigate the implication of a new paradigm of knowledge management on an organization’s structure and functioning, considering knowledge management in direct relation with data management and information systems. This article shows, using two organizational examples, that the development of effective knowledge management systems requires a well-organized information system, as well as the clear identification of the main knowledge and decision-making centers within the business organization. After briefly defining the concepts of information management and knowledge management, the article presents a comprehensive literature review of the academic and professional publications that investigate the inter-relationship between these two organizational functions. Based on this secondary information, we propose a model that integrates both information and knowledge management systems, and provides an analysis of two UK business firms in order to illustrate the integration between these elements.
Before considering the research made on the relationship between information management and knowledge management, it is important to understand clearly the meaning of concepts such as data, information, and knowledge, and the progression from one to another within an organization.
A simple collection of data does not represent information, and equally, a simple collection of information cannot be considered as knowledge. An isolated datum has no meaning, and a collection of randomly combined isolated data is even more confusing (Schreiber et al., 2000). In order to transform a data collection into information, a person or a system must order the data, applying a specific interpretative pattern, which is determined by the context and the objectives of data analysis. Through the application of this interpretative pattern, specific relations among the collected data are discovered and defined, which transforms data in information, but only for a specific context and purpose (Bellinger, 2004). When the resulting information is ordered and interpreted in a specific context and with a specific purpose, patterns can be identified and defined as knowledge (Bellinger, 2004). Considering this transformation of data in information and then in knowledge, it is possible to draw a descriptive model (see Figure 1). It is interesting to note that in order to properly interpret the data and then the information, certain information patterns (knowledge) must be applied which create a dynamic cycle of knowledge creation and application within organizational systems.
The progressive transformation of data in information and information in knowledge
However, this model is still too simplistic for several reasons. First of all, the knowledge used to define interpretation rules might not be created inside the organization, but rather acquired and transferred from outside (e.g., from a consulting firm), and it might be completely different from the knowledge resulting as an output of the entire process of interpretation.
Key Terms in this Chapter
Hierarchy Culture: An organizational culture that focuses on the development and maintenance of stable organizational rules, structures, and processes, by implementing a hierarchical system of power and management.
Market Culture: An organizational culture that attempts to achieve market performance using internal processes that emphasize stability and control.
Clan Culture: An organizational culture that emphasizes the internal maintenance organizational structures and processes, using flexibility, concern for people, and sensitivity toward customers.
Knowledge Management: A central function of an organization that contains a number of rules and processes applied so to comprehensively collect, organize, share, analyze, and distribute knowledge in order to maximize the organizational performance.
Adhocracy Culture: An organizational culture in which various groups of individuals reach consensus by responding in an ad hoc fashion to frequently changing priorities.
Explicit Knowledge: Knowledge that is coded and cataloged in order to facilitate its use by people.
Implicit Knowledge: Knowledge that is contained in people’s ‘modes’, and based on their personal experience and insight.