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Knowledge refers to awareness or a theoretical or practical understanding of someone or something that originates from a combination of data, information, experience, discovery, learning and individual interpretation (Edvardsson, and Durst, 2013). Knowledge can also be defined as the ability of an individual to respond to a body of facts and principles that have been accumulated over a period within his or her environment (Groff and Jones, 2012).
In an organizational viewpoint, knowledge is seen as the total of what is known by the people/employees within an organization. It is the intelligence and ability of the people within the organization. This intelligence and ability are what helps an organization to be more successful regarding achieving the organizational set goals and objectives. Failure to use the peoples’ intelligence and ability in an organization well may be fatal to an organization as far as organizational goals and objectives achievement is a concern.
Knowledge is what makes the difference within organizations. Most of the well-performing organization has useful and relevant knowledge they use to outdo their competitors. As such, this knowledge must be managed to ensure continued performance of an organization as a whole.
Knowledge has lately been recognized as a key factor in an organization. Additionally, knowledge is crucial in production and operation of an organization. It is, therefore, important to manage knowledge within an organizationn. There are different types of knowledge including explicit knowledge, tacit knowledge, embedded knowledge, procedural knowledge, detailed knowledge and so on (Groff and Jones, 2012).
This paper evaluates knowledge management in small businesses. Moreover, the paper will set out by defining what knowledge management is, its significance and purpose with respect to tacit and explicit management. The paper will also examine assumptions made by KMS, and also SMEs definitions.
What is a KMS and what does it do?
Knowledge management is a systematic process of capturing, processing, assessment, sharing, storing, distributing and using of knowledge (Croteau, 2016). It involves the best use of knowledge for achieving organizations set goals and objectives. Knowledge management consists of the initiatives, processes, strategies, and systems that ensure and heighten the creation, improvement, sharing, storage and application of the knowledge (Croteau, 2016).
Knowledge management is based on two main activities. The first activity is about capturing and documenting of all employees knowledge within the organization. With this capturing and recording of such knowledge, the organization can know what kind of assets it has regarding human manpower is a concern. That fact that people drive organizations, it makes it more logical to know what the organization has. It is people within the organization that sets the organization’s goals and objectives. As such, these employees are likely to work hard to achieve their organizational set goals and objectives.
The second activity is about the distribution of the valuable knowledge to all staff around the organization. Dissemination of such knowledge can be done through various means including; on the job training, direct supervising by respective line managers or heads of departments, through one on one talks with employees of an organization, hiring a trainer to come and train the employees and so on. As such, Knowledge management will not only allow the organization to have all the relevant information needed by the organization but also to use such information to organizational benefit.
Knowledge management encourages or focuses more on organizational learning with an aim of achieving the organization’s objectives such as continuous improvement in employee’s performance, acquiring more market share, being more innovative, improved profits, teamwork and togetherness through sharing of information learned or trained and so forth.
Valuable knowledge is very crucial for the success of any organization. As such, the organization that can create and diffuse knowledge to its employees is likely to gain a competitive age against its competitors. Having knowledge employees is great for an organization though it’s difficult to keep such employees within the organization. They may be lost through turnover, competition or even through retirement (Dalkir, 2011).
Knowledge management is closely linked to organizational success. It highlights the importance of managing useful knowledge to an organization. This useful knowledge is the one that will help in the achievement of organizational set goals and objectives.
Knowledge management is also defined as a systematic coordination of organizational resources in a way that can add value to an organization through use, reuse and innovation. These organizational resources include; people within the organization, processes within an organization, technology, organization structure and so on. This coordination is realized through creation, processing, distributing and application of the knowledge.
Knowledge management is the use of organizational brain power in a systematic manner to ensure that an organization gains a competitive age against its competitors, to achieve efficiencies in operations of an organization and to spur innovation within the organization (Groff and Jones, 2012).
Continuous organizational learning is crucial to an organization. People especially of an organization need to keep learning the environment an organization operates in keep changing every time and then. As such, employees ought to keep learning so as to gain more and more knowledge that will help in the achievement of organizational goals and objectives.
Knowledge management helps to keep an organization running at a high and efficient level. As such, organizational goals and objectives are likely to be achieved.
Knowledge management was recognized in the 1980s as a competitive asset to an organization. It was fueled by the development of Information and technology systems which made it simple for creation, storage, display and dissemination of information (Edvardsson, and Durst, 2013). Currently, most organizations have or are trying to adopt to knowledge management systems mostly due to its efficiency.
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What is Knowledge and what is the purpose of managing tacit and explicit knowledge?
Knowledge is different from information as well as data. Individuals absorb information and data in the development of knowledge. With knowledge can easily convert data information Knowledge is the total of what is recognised, resides in intelligence and competency of in individuals. In the recent past, knowledge is considered as production factor; however it is related to labor. This is a clear indication of the connection between knowledge-information-data.
For instance, policy an analyst is requested to establish if changes in policy about marketing of ABC products, in the clothing sector. The analysts begin by assessing the numbers on the ABC sales for the previous three years. The analysts use these numbers and develop a pattern for ABC products demonstrating that they have significantly increased for 3 years, especially after policy changes.
Such data is converted to information. To get practical descriptions that maximises sales, the analysts looks for further information, speaks with famous clothe retailers and distributers. Upon completion, the analyst and based of the analyst’s understanding, she states that attempts to market local fashion items expanded after policy implementation and positively increased the sales volume. In this case, the analysts used current and new knowledge. User her skills to recognise a certain element. Transforming data to information, while using current knowledge she reached a conclusion. In fact, she produced new knowledge (Hislop, 2013).
Knowledge is imperative because it encourages innovation – knowledge management system fosters innovation within an organization. Through sharing of information, employees of an organization can pick relevant information that may help them to develop some new within the organization. Knowledge management encourages the creation of knowledge. As such, new ways of doing things in an organization may be discovered. Knowledge is crucial to decision making since managers can access all relevant information they want for decision making within the organization.
In addition, knowledge, customers’ responses are timely received and may be acted upon quickly. Any organization that can respond to customers’ needs will be loved by its customer, hence more revenues to an organization. Knowledge helps in staff retention within an organization. This `is done by recognizing of employees’ within an organization. Recognition may be in the form of rewards such as increased salaries or wages.
Again, knowledge improves organization’s revenues. The knowledge management system ensures improved revenues when products and services get to the market faster. Knowledge management system provides the necessary information of what is required at any particular point in time. As such, an organization can easily and quickly respond to customers’ needs well.
With the adoption of knowledge system, an organization is likely to grow as far as technology is a concern since they can create, process, store, share and access all the relevant information that is beneficial at easy and quick. Consequently, knowledge is driving businesses to extend to other parts of the world. This international expansion is good for any business though it has to be undertaken carefully so as to reap all the benefits of globalization and avoid all the challenges that come with globalization such as management issues or difficulties.
Purpose of Managing Tacit and Explicit Knowledge
Tacit and Explicit Knowledge
People hold divergent forms of tacit and explicit information and employ their information in various ways. Moreover, people use divergent viewpoints to contemplate about anomalies and formulate solutions. Again, research shows that knowledge is disseminated in creative ways.
This is knowledge that comes from common sense, it is automatic, and does not involve thought process. Tacit knowledge is critical when it comes to assisting firms not just in decision making processes but also impacting the corporate culture. In short tacit knowledge is individual, slanted form of information is informal. This type of knowledge is never found in books or written materials.
Mental tacit information integrates implicit mental representation and perspectives that are so entrenched and often never taken seriously. Perceptive models impact how people conceptualize world events. People can investigate story content and actions and employ useful tacit information in executing work-related functions.
For example, workers of Datafusion Inc, an ICT consulting organisation, capture and shares meeting footages with employees. This is to say that employees will
Explicit knowledge is largely methodological or academic. Moreover, explicit knowledge is documented in formal prose such as manuals, computational formulas and shared through print media and electronic media among others. Explicit information is technical and involves a level of scholarly information or understanding that is attained through formal education, or structured education.
Explicit information is cautiously codified, stored in a hierarchy of repositories and is accessed with high quality, dependable fast data reclamation structures. Once classified, explicit knowledge assets can be used time and again to solve many comparable forms of issues or unite people with valuable reusable information.
For instance, Ernst & Young have developed an international brain of explicit data to comprise cultural disparities. Their database of best practices with a global reach is anchored on sharing and documenting information. The company’s approach to business issues stems from an array of perceptions.
Regardless of where problems occur, there is no right answer, but several practical methodologies. Ernst & Young see knowledge objects as templates of core insights that can be employed in any cultural setting.
Andersen Consulting for instance, developed ostentatious ways to classify, store and reuse explicit data. With this approach, any client sensitive data is removed while selected information is reprocessed. In short, data is transformed into a verified successful solution that can be employed in a similar industry.
Importance of knowledge management system
What are the assumptions made about KMS (Objective / practice-based)?
There are various assumptions of Knowledge management system. For example, KMS is associated with free circulation of information; it is assumed that information within an organization flows freely from one employee to another the information maybe about products an organization deals with, strategies, and structure. In reality, free flow of information within some organization is not possible. Some organizations have levels in which certain information can flow up to. Organizational information is mostly kept secretly and only shared with some few senior employees of an organization source
When it comes to knowledge sharing between employees – it is assumed that all employees of an organization trust each other and as such, they freely share whatever kind of information they have. In reality, particularly, where employees try to outdo each other in term of their performance and rewards. Source
There is the aspect of efficient research and retrieval system, which is assumed that all staff or employees of an organization can easily and efficiently search and retrieve all relevant information they need to help them perform their respective duties well. The reality may be different depending on an organization. Some organizations do not have efficient systems that can allow employees to search and retrieve information without difficulties.
Easy combination of different sources of information under KMS it is assumed that all employees of an organization can combine various sources of information and use that information for the better of an organization. This may not be true to some organization. Some organizations have departments or units in which employees are confined. As such, employees are restricted to what kind of information they can access depending on their respective departments or units. Source
With regards to employees’ abilities or competences information is easily accessible its assumed that all information about all employees abilities or competences within an organization is readily available in electronic form, and it can easily be accessible by anyone within an organization. In reality, some firms do not have such employees’ information on electronic yellow pages where everyone can access. Furthermore, some employees are not comfortable to have all their information available and accessible to anyone else apart from the ones they want them to get access to such personal information (Aggestam, 2015).
Owing to the fact that employees are experts in the particular area and can easily educate other employees, however in KMS; it is assumed that employees of an organization are experts in the certain field of their work and can quickly train and support other staff. This may not be true to some organization. Some employees may not be will to share their knowledge with each other for free. Unless some incentives are attached to information sharing within an organization, it will be difficult to for some employees to open up and share information with their colleagues.
It is widely acknowledged that project teams have virtual project offices, but under KMS, it is assumed that project teams have special virtual project rooms where all information and correspondence with internal and external customers is collected there. In reality, some organizations do not have such teams and rooms where such information and communication can be collected. Source
Bonus schemes are widely used in companies; nevertheless, it is assumed that most organizations have bonus schemes that are created to activate further knowledge sharing or flow with an organization. In reality, most organization do not have such bonus schemes to encourage employees to share and allow flow of information within the organization.
How do you define a small to medium enterprise (startup?)
Small and medium-sized enterprises (SMEs) are independent firms that employ fewer numbers of employees or workers. They are non-subsidiary firms. Small and medium-sized enterprises are those firms with fewer than 50 workers or employees, but this number of employees or workers may vary across countries all over the world (Hislop, 2013).
What is the Knowledge Economy and what does it have to do with SMEs?
Most of the small and medium-sized enterprises face several problems in their operations. Such problems include lack of enough capital, less marketing competition from large organizations, lack of quality operational knowledge (Croteau, 2016).
Some of these problems hinder Small and medium-sized enterprises to successful compete with other firms. It is, therefore, important for Small and medium-sized enterprises to adopt knowledge management system to help them improve their competitiveness. A good understanding and use of knowledge is an important boost to firms’ competitiveness.
Knowledge management system aims at improvement of firms, profits. As such, Small and medium-sized enterprises should adopt it. Small and medium-sized enterprises will benefit since knowledge management ensures effective communication within the firm and knowledge sharing which is very critical to any firm’s success or failure (Hislop, 2013).
Small and medium-sized enterprises should aim at improving their competitiveness so as to be able to survive in this tough market. With the adaptation of knowledge management system, Small and medium-sized enterprises will definitely improve their competitiveness hence a high chance of becoming large organizations.
Why would SMEs want to have KMS (eCommerce)?
Small and medium-sized enterprises want to have knowledge management system so as to; Increase revenues – since knowledge management systems enhance business revenues through getting products and services to the market faster, small and medium-sized enterprises desire to make more revenues so as to expand will drive them to knowledge management system use (Dalkir ,2011).
Knowledge management encourages innovation – knowledge management system fosters innovation within an organization. As such, small and medium – sized enterprises also desire to be more innovative so as to acquire a competitive age to help them grow to large organizations.
Improved customer services – knowledge management system ensures improved client services. As such, small and medium – sized enterprises will also desire to satisfy their customers. Satisfied customers are likely to remain loyal to an organization. With loyal customers’, small and medium – sized enterprises are more guaranteed to grow or develop to large organizations.
Discuss key challenges to the implementation of KMS in SMEs.
Implementation of knowledge management system in SMEs is hindered by various challenges. For instance, SMEs considerably rely on technology – knowledge management system relay more on technology. Therefore, a failure in technology may have a negative effect on the operation as well as the profits of an organization. It’s worth noting that knowledge management system is a technology-driven system. As such, it’s intricate to distinguish knowledge management system and technology.
Moreover, it is difficult to get employees to effectively use information – availing information to employees is not enough. Getting employees to effectively and efficiently use available information is more critical. Some people take the time to get interested in some information. As such, knowledge management system implementation in SMEs may take time for it to be accepted and put in effective and efficient use.
Constraints of information circulation among employees are somehow difficult in SMEs particularly when such information is likely to empower another employee to become more relevant and competitive within an organization. Employees do compete for promotions in some organization. As such, it will be very difficult for an employee to share with other (Aggestam, 2015).
Another challengelle is the unwillingness of information sharing amongst employees’ of an organization – it is a great deal to get an employee to share whatever information he or she has free of charge. Therefore, implementation of knowledge management system may not be possible for some SMEs.
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