Knowledge Management in Organizations

Knowledge Management in Organizations

Mario Pérez-Montoro
DOI: 10.4018/978-1-59904-883-3.ch088
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Within the last 10 years we have witnessed the appearance and consolidation of a brand- new discipline, that of knowledge management (KM), which has the organization and organizational environment as its primary focus. This discipline seeks to design systems and strategies to make it possible to systematically take advantage of the knowledge generated by and within an organization. Within the current economic situation characterized by extreme competitiveness and market globalization, the correct application of knowledge management offers an important competitive advantage in the business world, one capable of ensuring a company’s ongoing survival and operation. This article seeks to present a brief analysis of this new discipline and, at the same time, offer a useful conceptual framework as a tool for orientation to the literature of the field. In order to accomplish this, first we shall tackle the historical context of the discipline and describe the two main schools which have dominated the theoretical outlook of knowledge management ever since its inception, as well as their evolution. Secondly we shall compile an outline of the fundamental concepts upon which KM is based, and we shall introduce a detailed working definition of knowledge management. Last of all, we shall consider the methodological and pragmatic aspects involved in developing an effective KM program or system within an organization.
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After World War II, various companies began to develop a series of strategies for improving their productivity through experience-based learning. The key theoretical expression of this line of thought is to be found in the work of economist Kenneth Arrow (1962). Other authors (Prusak, 2001) cite these strategies as clear intellectual predecessors of the knowledge management movement. This movement, however, did not establish itself nor spread until the second half of the 90s. It is only then when, amongst other factors, the key founding works on the conceptual and applied aspects of knowledge management first appear (Chen & Chen, 2006).

The birth of this discipline cannot be attributed to any single factor. Nonetheless there are two different variables, one technological and the other more directly economical in nature, which may have been largely responsible for setting the scene.

On one hand, the appearance of new information and communication technologies made it possible to access, manage, and use information, and thereby knowledge, to a hitherto unknown extent. Moreover, the market evolution of the technological sector was such that costs were lowered so as to place technology within the reach of most medium and small-sized companies.

On the other hand, the globalization of the marketplace and the growth of a new culture of competitiveness created a new economic milieu. In response, companies designed new alliance strategies and policies for organizational culture in order to successfully adapt to these new and changing conditions. Knowledge and intangible assets―rather than only material resources―began to be looked upon as value-added assets contributing to a company’s operation and survival within the global market (Roos, Pike, & Fernstrom, 2006; Stewart, 1997).

Two distinct schools, each offering its own way of understanding and defining knowledge management, were conceived within this specific context. One of these schools understood knowledge as process, as per Karl Sveiby (2001). This Eastern (or Japanese) school stemmed from the ideas defended by Nonaka and Takeuchi (1995), two of the most prominent authors of this line of thought, and focused its investigation upon tacit knowledge and its creation, using theoretical fields of learning such as psychology, sociology, or education as its cornerstones. Within this school or knowledge-process group, the company or corporation is viewed as a living organism that interacts with its environment and is therefore seen as being more experiential than mechanistic (Gueldenberg & Helting, 2007). In such a context knowledge is understood as a psychological process directly related to experience, and the enabling of knowledge and its sharing or socialization process as thus being crucial to knowledge management. According to this view, knowledge management projects are usually developed by the human resources department.

Key Terms in this Chapter

Collaborative Practice: The ways of working which emerge between communities of practice as they work towards the achievement of common goals.

Knowledge Workers: A person who works with data, information, and knowledge rather than physical components.

E-Community: The development of shared purpose, values, and experience resulting in the formation of trust between a group of people who may be geographically dispersed and communicate mainly via electronic means.

Community Of Practice: The emergent process of social learning as a group of people with shared values, beliefs, and goals, work together towards a common aim.

E-Collaboration: The use of information technology to establish, facilitate, and sustain cooperation between two geographically dispersed parties, who have common goals, to enable them to work together for mutual benefit.

Collaborative Systems: A computer-based system that is accessed and used by more than one organisation to support business transactions in the supply chain. The system allows data to be automatically updated in a partner organisation’s systems during the processing of a transaction.

Social Activity Theory: The study of authentic practice arising from communities of knowledge workers engaged in business practice.

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