GE operates as a multi-national enterprise investing significant capital into technological innovations in diverse portfolios of business practice. The company produces aircraft engines, plastics, appliances, medical systems and lighting (to name only a few divisions) with pre-tax profitability, company-wide, at 31.6 percent (Grant 2003).
Two types of knowledge are emphasized in KM practices. Tacit knowledge is ingrained in the minds of employees and is difficult to articulate1. Most knowledge is tacit in nature and is developed over time through trial and error. Tacit knowledge is often underutilized as organizations lack inbuilt systems to harness it.
29) with well-established theoretical underpinning, has emerged to become the top investment priority of many business organizations. Effective implementation and performance of knowledge management is largely associated with the intellectual capital of a firm and as a result it affects innovation and financial success as well (Ju, Li and Lee, 2006, p.
Consequently, the concept of knowledge management has recently emerged as one of the most essential organisational paradigms in contemporary organisational studies.
Knowledge is nowadays increasingly becoming an ultimate competitive advantage either replacing or complementing such traditional sources of success as technologies, marketing mix, and often even financial resources (Malhotra (1998).
Therefore, it became necessary to seek a study which explores the myth and reality of KM and based on empirical study gives a unbiased and objective result based on empirical studies.
The methodology chosen was the Kaplan and Norton Balanced Scorecard method which measures the degree of success of KM on FSA, the case study that has been taken up to validate or negate the hypothesis regarding success or failure of KM on business enterprises.
This is supported by the principals of firms having core competences that distinguish them from their competitors (Hamel and Prahalad, 1994). In today's knowledge based society, it is generally believed that such unique resources rest in a firm's people in the form of knowledge, referred to broadly as human capital (Grant, 1996; Teece et al., 1997).
According to the study, in a rapidly changing competitive market, organizations are driven to create changes and implement innovations not just within their workforce but most importantly in their products and services. Innovation has been associated with the overall growth and enhanced the performance of organizations through the improvements in their effectiveness, productivity, competitive advantage and most importantly, the quality of their goods.
Knowledge management is a relatively young academic discipline, but a well established management interdisciplinary that has been in practice for years. A better understanding of the various perspectives and theoretical concepts of knowledge management can help an organization achieve high performance working.