Sharing Tacit Knowledge: The Essence of Knowledge Management

Sharing Tacit Knowledge: The Essence of Knowledge Management

Ayesha Khatun (Assam University, India)
DOI: 10.4018/978-1-5225-3725-0.ch004

Abstract

Twenty-first century markets are unstable: technologies rapidly proliferate, competitors multiply, products and services become obsolete almost overnight. It is knowledge that can help the organizations to remain competitive. But as knowledge is the source of competitive advantage for the organization, it is also the source of competitive advantage for individuals. People think that knowledge is power, so sharing the same may lead to losing the power. Moreover, the very nature of tacit knowledge poses many difficulties in sharing the same. But sharing tacit knowledge is a vital part of the knowledge management process because it is tacit knowledge that is inimitable and is unique for the firm and hence provides competitive advantage. Studies found that personal interaction and informal networks work as the most successful means of sharing tacit knowledge. This chapter discusses the concept of tacit knowledge and attempts to discuss and suggest some effective methods of sharing tacit knowledge in organizations.
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Introduction

Knowledge Management (KM) is one of the most discussed topics of 21st century in the context of business excellence and sustainable competitive advantage. Knowledge Management is in high demand in service sectors like defense, education, consultancy firms, health service, IT etc. It is found that the world economy has had shifted from agrarian era to industrial to banking and finance to IT and now to knowledge. Multiple factors have led to this current “knowledge boom”.

The increased focus on knowledge economy and knowledge society has definitely led to the emergence of Knowledge Management, irrespective of the nature of business operation. In fact, in knowledge economy, Knowledge Management is believed to be the path to sustainable competitive advantage (Dunford, 2000).

In a knowledge driven economy, organization’s intangible assets are increasingly becoming a differentiating competitive factor, particularly in service industries. Indeed, intangible assets such as trade marks and company’s repuation and skills pertaining to employee’s know-how and the corporate culture are both recognised as quintessence of competitive advantage.

Companies are spending huge amount of money on KM. For example Ernst & Young spends about 6% of its revenue on KM, McKinsey and Co. spends about 10% of its revenue on KM, Buckman Laboratories, a specialty chemicals firm spends around 2.5% of its revenues on KM and an author, Duane Sharp finds that where KM practices have been successful, the returns generated by these practices (ROI) have often exceeded 10 times the original investment (Sharp, 2003). Moreover, firm like Rank Xerox (the European arm of Xerox Corporation), has saved more than $1.5 billion over the past several years by identifying and replicating internal best practices.

Many world class corporations have adopted highly dedicated KM practices. To name a few Ernst & Young –Knowledge Process Landscape, Hewlett & Packard-Knowledge Links and KPMG Peat Marwick US has developed an intranet called Knowledge Web (K-Web) as the basis of their KM practices. Studies found that sharing knowledge is the crucial part of knowledge management and hence the success of knowledge management depends on effective sharing of knowledge. It is said that knowledge economy is the economy of sharing.

Let us systematically discuss about knowledge, tacit knowledge and how tacit knowledge could be shared and why the same is so important in the context of knowledge management.

Key Terms in this Chapter

Tacit Knowledge: Tacit knowledge is that knowledge that resides in the human brain. It is the experience, intelligence, and know-how of the people in the organization. Unlike explicit knowledge, tacit knowledge cannot be documented easily or expressed in explicit form, and hence, it is tough to share tacit knowledge with others. Tacit knowledge could be gathered from observation and experience.

Knowledge Management: Knowledge management is a management philosophy that aims to make visible the knowledge available in the organization and entails a process of knowledge creation, storage, sharing, and application, and integrates the same with business processes in the organization. In short, knowledge management leads to knowledge-focused activities in the organization to make the processes prompt and competitive.

Knowledge: Knowledge refers to the ideas, information, understandings, skills, and insights possessed by an entity acquired from learning and/or experience through the mental process of thinking, reasoning, abstraction, and comprehension. Unlike information, knowledge is deeply influenced by the beliefs and values of the entity.

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