Contemporary Issues: Knowledge Management - Essay Example

 Contents Contents 1 Introduction 2 Discussion 3 Answer A: What is KM and impact of KM on contemporary organizational strategy 3 Answer B: KM as a supporter of sustainable growth of an organization 4 Answer C: Opportunities and challenges for KM in the contemporary business world 6 Conclusion 9 References 10 Introduction Knowledge management is an important strategic asset in the current corporate world in which all types of organizations are finding it necessary to invest in sufficient KM strategies to manage knowledge and information in a way such that the maximum benefits of the available knowledge can be extracted. Knowledge management is a process of collecting, developing, managing, sharing and using information and knowledge within an organization. It is a multi-dimensional approach which is employed by organizations across the globe with the aim of achieving the key corporate and organizational goals through the optimal use of the knowledge available within an organization. Today, knowledge management is used across diverse fields including computer science, information and media, public health, business administration and public policy. The concept of knowledge management focuses on the achievement of varied organizational objectives such as competitive advantage creation, improved performances, innovation, continuous improvement and integration of the different units of an organization, all of which are developed on the basis of the encouragement of sharing and creating knowledge. This essay aims at analysing the aspect of Knowledge Management as a significant strategic and contemporary issue in the current business environment. This is done by collecting data and evidence from reliable and valid secondary data sources and by studying the benefits, objectives and the challenges associated with knowledge management and by analysing the validity of knowledge management as a contemporary corporate issue. Discussion Answer A: What is KM and impact of KM on contemporary organizational strategy Knowledge can be defined as the data and information that is available in context with the understanding of applying the available knowledge (Jacobides, Knudsen and Augier, 2006). Knowledge as a component is subjective in nature because it is built on the basis of values, beliefs, emotions and intuitions of an individual as well as the experiences of the individual. In order to gain maximum efficiency, an organization has to collect different types of knowledge and ensure that they are able to manage the various types and levels of knowledge within the organization. Knowledge management is the process through which the organizations are able to use various types of information and knowledge like tacit knowledge, explicit knowledge, systemic knowledge and implicit knowledge for the benefit of the enterprise (Nonaka and Von Krogh, 2009). Knowledge Management (KM) has emerged as a significant and integral component of the modern business environment because knowledge management is a strategic tool that can be used by organizations to ensure competitive advantage, success and growth of the organization in the intensely competitive and dynamic global business world. Apart from being innovative, an enterprise also needs to be able to manage the physical and intellectual resources in the most efficient manner to gain an edge over its competitors. This strategic management process can be used as a key tool for the creation of growth and success. As such, the management of organizations pay a high degree of importance to the knowledge management systems while developing their organizational and business strategies. Also, the knowledge management system helps to manage the knowledge assets of a company in the most effective and advantageous manner which helps to generate profits in the short run and foster the creativity and competence of the organization in the long run (Johnson, Scholes and Whittington, 2014). Another main advantage of knowledge management is that it can be used as an effective tool to use the Information and Communication Technologies (ICT) to take tactical and strategic decisions related to organizational management. An effective knowledge management system is developed by considering the behavioural as well as the technical functionalities of an organization and its resources. Thus, the holistic approach of a knowledge management system emphasizes on three key factors of any organization which are process, people and technology and as such are key influencers of the corporate and organizational strategies (Johnson, Scholes and Whittington, 2008). Answer B: KM as a supporter of sustainable growth of an organization Since, globalization has brought about major changes in the way the contemporary business world functions, therefore, many new concepts and tools have emerged for enabling businesses across a wide range of industries to function in a more competent and sustainable manner (Beynon and Dunkerley, 2000). The era of globalization is marked by the transnational flow of physical resources, products, services as well as the intellectual resources like knowledge, information and ideas. As such, the integration of knowledge and the availability of knowledge have become easy for all organizations (Bartlett, Ghoshal and Beamish, 2008). In this situation, the different corporations have to compete not only in terms of marketing and resource building but also in terms of building on the knowledge and information resources and employing the knowledge resources in the most value adding manner (Reilly and Tushman, 2004). Knowledge management can be established as a globally contemporary issue because it is a kind of management strategy that is focused towards the most efficient management and use of knowledge for the aim of attaining the organizational objective and for serving the key organizational goals of any business (De Wit and Meyer, 2005). The central tenets of knowledge management include locating, collecting, extracting, codifying, sorting, organizing, storing, retrieving and transferring information and knowledge with the aim of meeting organizational objectives and goals which in the long term scenarios add to the competiveness, sustainability and continued success of a company in the contemporary corporate environment (Maier, 2007). The knowledge management systems are gaining increasing popularity as a strategic management tool because of the multiple benefits associated with its use in an enterprise. The benefits of a knowledge management system can be studied through the consideration of six main aspects which are the strategic advantages and impacts of the knowledge management systems, the measures that are used for evaluating the effectiveness of a knowledge management system, the barriers which are faced in the process of implementation of the knowledge management system, the stakeholders who are directly impacted by the use of the knowledge management system and the operational benefits that can be gained through the employment of a knowledge management system. The key benefits that are being gained by many locally and globally functioning companies across the globe from the use of knowledge management systems include the facilitation in decision making processes, stimulation of innovation and positive cultural changes, development of learning based organizational culture, improvement in the bottom-line of the company and the development of a knowledge rich work environment, all of which are necessary for surviving in the volatile and fast changing corporate world and which lead to the development of a successful and sustainable organization. The business strategies and the corporate strategies of a company cannot be decided without accessing the available information related to the company. For deciding on the future business strategies of an organization, the senior managers have to access different levels and types of knowledge for which the consideration of the appropriate knowledge sources is necessary (Stacey, 2012). Every type of strategy starting from the basic strategies like marketing and sales, product designing etc. to the more high end corporate decisions like foreign expansion, selection of markets, product management, and investment decisions cannot be taken rightly without the managers being able to access and use a proper knowledge database. For this purpose, the presence of a knowledge management system has become mandatory in an organization but it often faces a hindrance in the way of proper management of the KM system which leads to difficulty in the process of using the knowledge in the most value reaping way. So, the formulation of an effective and well managed KM system is a pre requisite for the use of the system within an organization. The importance of a knowledge management system is more profound for the global and multinational organizations because these kinds of organizations have to deal with diverse groups of people and heterogeneous types of knowledge bases (Gupta and Sharma, 2004). Answer C: Opportunities and challenges for KM in the contemporary business world There are a number of opportunities that have evolved for the implementation of knowledge management systems and processes in the arena of international business. The fast integration of global corporate systems has led to the creation of diverse scopes and opportunities for the use of knowledge management in a wide array of industries and segments (Eisenberg, 2007). Also, the increasing necessity for employing technological systems in every enterprise leads to the development of beneficial opportunities for the use of knowledge management practices (Stonehouse, Campbell, Hamill and Purdie, 2004). The leading multinational companies are using KM systems as a way of enhancing efficiency, profitability and competitiveness. However, there are also multiple roadblocks that are faced in the knowledge management system usage. In particular, the implementation phase of the knowledge management systems poses several risks and challenges for companies across all industries because this phase needs the integration and collaboration of the employee groups and as such, the human factors come to play a critical role in deciding the success level of the KM system implementation (Deal and Kennedy, 2000). Some of the key challenges that may be faced by an organization in the processes of establishing knowledge management systems and processes include the failure of aligning the knowledge management initiatives with the business and corporate philosophies and objectives of the respective organization, the development of knowledge repositories which are difficult for access by certain groups of employees and which actually do not adequately address the concerns of content management, failure in taking up the right approaches for formally and informally sharing knowledge among separate employee groups and levels and the inability of the knowledge management systems to create beneficial impacts on the business results (Chua and Lam, 2005). All these factors can hinder the effectiveness of the new system with respect to the achievement of the corporate objectives and the alignment of the business objectives with the knowledge management initiatives (Pfeffer and Sutton, 2006). Apart from these challenges, another key challenge in the process of developing and maintaining a knowledge management system is to align the human behaviours of the employee groups in the company with the functions of the new system. The consideration of the human factors is critical because both the human resources and the knowledge resources are crucial for the long term success of an organization (Daft, Kendrick and Vershinia, 2010). In case, the personnel of a company display higher level of resistance towards the adoption of the knowledge management processes, then the chances of the successful use of such systems become intensely difficult (Fergusson, 2005). Other ancillary challenges for KM systems are the lack of suitable strategies, the absence of proper resources and skills, tendency to use overly simple knowledge management processes, showing more preference towards formal and stringent methods for knowledge sharing among different employee groups, non-alignment of the system with the actual corporate objectives, the absence of focus and interest among the employees and the presence of political and organizational biases in the process of collecting, managing and retrieving knowledge in the form of data and information. The failure of a knowledge management system may lead to major losses for a company because the design, setting up and managing KM system requires high amounts of investments in terms of money, resources and time on the part of the organization. This may happen when an all-inclusive KM system is used in the organization without actually taking into consideration the key needs that are to be addressed through the new technological system (Daft, 2009). Knowledge and power are two aspects of an organization which are directly related to each other. It is argued by many researchers that the management and use of knowledge has become one of the key priorities for any organization in order to ensure success and competitiveness in the intensely integrated and competitive business segment (Johnson, Christensen and Kagermann, 2008). However, many challenges are faced in the way of integrating power and knowledge in a company because of differences in the interests and opinions of different groups of entities who hold these knowledge and power. Conclusion Thus, it can be established from the above discussion and analysis that knowledge management is a necessary strategic tool in the current business environment. Also, the importance of knowledge management is likely to increase with the heightened use of global connections and cross border flow of information and other resources. But in order to extract the complete benefits from the knowledge management system in an organization, the implementers of the system would have to carefully assess the benefits, opportunities and the risks associated with the use of the system. Many factors have to be taken into consideration while planning and using the knowledge management processes and practices for ensuring that the knowledge management systems are effective and meet the desired objectives and goals. Since there are many dimensions and approaches that should be ideally considered regarding the use and benefit extraction from knowledge management, therefore, knowledge management has become a globally studied contemporary issue. 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