This chapter examines the fundamentals of Knowledge Management (KM) and Intellectual Capital, traces the history of these movements, and explores organizational applications of both traditional and current KM implementations. The three subsystems that are fundamental to any KM system are examined, and the importance of organizational learning and sense-making for successful KM is explained. The necessity of treating knowledge management in a systemic organizational sense to include the social as well as the technological implications is rationalized, and the key attributes of an organization’s prevailing culture, including affective factors that encourage or block effective KM, are discussed. The importance of information technologies such as SCM, CRM, ERP, ERP II, and Web 2.0, Enterprise 2.0, mobile technologies, and social media is highlighted. Leadership concerns and application of dynamic leadership models are addressed in the text and in case studies.
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For more than two decades Knowledge Management (KM) has been vigorously proposed as a means to optimize enterprise performance and sustainable competitive advantage in the face of the rapidly increasing complexity and ambiguity of our modern global business environments (Nonaka & Takeuchi, 1995; Davenport & Prusak, 1998; Choo & Bontis, 2002; Marqués & Simon, 2006; Karaszewski, 2008). It is important to reflect that knowledge and its applications have been matters of concern to humankind since the dawn of cognition. Wiig (2000, p. 3) points out that “Knowledge, what it is, what it means, and its roles for work and spiritual life, has a long history”. Wiig goes on to cite the craft-guilds and apprentice-journeyman-master systems of the thirteenth century which relied on systemic and pragmatic knowledge management contemplation, and asserts that “Those responsible for survival in competitive environments always have worked to build the best possible knowledge within their area of responsibility” (Wiig, 2000, p. 3). Chapter 7 follows this path, and is intended specifically to consider knowledge and its application in relation to leadership and practical business-related factors.
Knowledge Management tends to be defined according to whether its protagonists are looking through a technological or a sociological lens, and it came into being because the availability of competitive expertise prior to the 1980’s had been haphazard (Wiig, 2000). KM may be broadly considered as the deliberate design of processes, tools, structures, etc. with the intent to increase, renew, share, or improve the use of structural, human and social elements of knowledge (Seeman et al., 1999), or more specifically as “Those processes, tools and infrastructures by which an organization continuously improves, maintains and exploits all those elements of its knowledge base that the organization believes are relevant to achieving its goals. KM includes the processes, tools and infrastructure by which these goals are modified as the organization's knowledge base changes. The organization's knowledge base is defined to include the data, information, intuition, knowledge (know how), understanding (know why), and wisdom, residing throughout the organization and in areas of overlap with partnered customers.” (Smith, 1998)