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Definition of terms
Data:
Facts and figures which relay something specific, but which are not organized in any way and
which provide no further information regarding patterns, context, etc.
unstructured facts and figures that have the least impact on the typical manager.

Information:
For data to become information, it must be contextualized, categorized, calculated and
condensed. Information thus paints a bigger picture;
it is data with relevance and purpose.

What is knowledge?
Knowledge can be gained and accumulated as “information combined with experience, context,
interpretation, reflection and is highly contextual”.
It is a high-value form of information that is ready for application to decision and actions within
organizations.
Knowledge is increasingly being viewed as a commodity or an intellectual asset.
It possesses some contradictory characteristics that are radically different from those of other
valuable commodities.
The power of knowledge is increasingly documented as the new strategic tool in the growing
organizations.

Today, knowledge is considered as a great source to an organization. The creation and diffusion
of knowledge have become ever more important factors in competitiveness.
Knowledge is a fluid mix of framed experience, values, contextual information, expert insight,
and grounded intuition that provides an environment and framework for evaluating and
incorporating new experiences and information. It originates and is applied in the mind of the
knowers. In organizations it often becomes embedded not only in documents or repositories, but
also in organizational routines, practices and norms.

In order for KM to succeed, one needs a deep understanding of what constitutes knowledge.

Characteristics of Knowledge
 Use of knowledge does not consume it.
 Transferral of knowledge does not result in losing it.
 Knowledge is abundant, but the ability to use it is scarce.
 Much of an organization’s valuable knowledge moves out at the end of the day.

Types of Knowledge: Tacit and Explicit

The term knowledge means skill or information acquired either through education or experience.
The knowledge can be broadly classified into two types
 1.Tacit knowledge
2.Explicit knowledge

Tacit Knowledge
The word tacit means understood and implied without being stated.
The tacit knowledge is unique and it can’t explain clearly.
That is the knowledge which the people possess is difficult to express.
The cognitive skills of an employee are a classic example of tacit knowledge.
The tacit knowledge is personal and it varies depending upon the education, attitude and
perception of the individual.
This is impossible to articulate because sometimes the tacit knowledge may be even sub
conscious.
This tacit knowledge is also subjective in character.

Explicit Knowledge
The word explicit means stated clearly and in detail without any room for confusion. The explicit
knowledge is easy to articulate and they are not subjective. This is also not unique and it will not
differ upon individuals. It is impersonal. The explicit knowledge is easy to share with others.

Embedded Knowledge
Embedded knowledge refers to the knowledge that is locked in processes, products, culture,
routines, artifacts, or structures.
Embedded knowledge is found in: rules, processes, manuals, organizational culture, codes of
conduct, ethics, products, etc. It is important to note, that while embedded knowledge can exist
in explicit sources (i.e. a rule can be written in a manual), the knowledge itself is not explicit, i.e.
it is not immediately apparent why doing something this way is beneficial to the organization

Knowledge management is that the firms manage know-how their employees have about its
products, services, organizational systems and intellectual property.
Knowledge management embodies the strategies and processes that a firm employs to identify,
capture and leverage the knowledge contained within its corporate memory.
Knowledge Management is appropriate towards the basic activity of planning and implementing
our tasks in a systematic and efficient manner.
Knowledge management is well documented that organizations with efficient communication
linkages have higher “information flow, knowledge sharing, cooperation, problem-solving,
creating, efficiency and productivity.
Companies built on such well develop networks to, “produce measurable business results, such
as faster learning, quicker response to client needs, better problem-solving, less rework and
duplication of effort, new ideas and more innovation. They enjoy higher sales, more profits, and
superior market value”.

Knowledge management is the deliberate and systematic coordination of an organization’s

people, technology, processes, and organizational structure in order to add value through reuse
and innovation. This coordination is achieved through creating, sharing, and applying knowledge
as well as through feeding the valuable lessons learned and best practices into corporate memory
in order to foster continued organizational learning

What is a Knowledge Management Principle? a principle is a 'fundamental truth or law as a

basis of reasoning or action'.
Four distinct characteristics:
They are timeless. They will be just as relevant in 50 years’ time as they are now.
They are changeless. Whereas knowledge will change over time, principles do not change
ever.
They are universal. That is to say, they can be applied anywhere.
They are scalable. That is, the same principles can apply to individuals, teams, organizations,
inter-organizations, and even globally.

Knowledge management and information management

Information and IM:
• Focus on data and information
• Deal with unstructured and structured facts and figures.
• Benefit greatly from technology, since the information being conveyed is already codified and
in an easily transferrable form.
• Focus on organizing, analyzing, and retrieving - again due to the codified nature of the
information.
• Is largely about know-what, i.e. it offers a fact that you can then use to help create useful
knowledge, but in itself that
• fact does not convey a course of action (e.g. sales of product x are up 25% last quarter).
• Is easy to copy - due to its codified and easily transferrable nature.

Knowledge and KM:

• Focus on knowledge, understanding, and wisdom
• Deal with both codified and uncodified knowledge. Uncodified knowledge - the most valuable
type of knowledge - is found in the minds of practitioners and is unarticulated, context-based,
and experience-based.
• Technology is extremely useful, but KM's focus is on people and processes. IT is great for
transferring explicit, codified knowledge, but it's role in the transfer of deeper, internalized
knowledge is more complex. Since this kind of knowledge is passed from person to person,
through interaction, collaboration, mentoring, etc. and preferably in an unstructured
environment, IT tools for KM have to support this function. They are therefore not merely
passing on information, but also act as tools to bring people together, to enhance communication,
to allow the storage and transfer of unstructured thoughts and notes, etc.

So, why is knowledge management useful?

It is useful because it places a focus on knowledge as an actual asset, rather than as something
intangible. In so doing, it enables the firm to better protect and exploit what it knows, and to
improve and focus its knowledge development efforts to match its needs. In other words:
• It helps firms learn from past mistakes and successes.
• It better exploits existing knowledge assets by re-deploying them in areas where the firm stands
to gain something, e.g. using knowledge from one department to improve or create a product in
another department, modifying knowledge from a past process to create a new solution, etc.
• It promotes a long-term focus on developing the right competencies and skills and removing
obsolete knowledge.
• It enhances the firm's ability to innovate.
• It enhances the firm's ability to protect its key knowledge and competencies from being lost or
copied.

Questions that KM answers

• What your organization knows?
• Where this knowledge is located, e.g. in the mind of a specific expert, a specific department, in
old files, with a specific team, etc.
• In what form this knowledge is stored e.g. the minds of experts, on paper, etc.
• How to best transfer this knowledge to relevant people, so as to be able to take advantage of it
or to ensure that it is not lost. E.g. setting up a mentoring relationship between experienced
experts and new employees, implementing a document management system to provide access to
key explicit knowledge.
• The need to methodically assess the organization's actual know-how vs the organization's needs
and to act accordingly, e.g. by hiring or firing, by promoting specific in-house knowledge
creation, etc.

Organizational Knowledge Resources

Business knowledge can exist on several different levels: Individual:
Personal, often tacit knowledge/know-how of some sort. It can also be explicit, but it must be
individual in nature, e.g. a private notebook.

Groups/community: Knowledge held in groups but not shared with the rest of the organization.
Companies usually consist of communities (most often informally created) which are linked
together by common practice. These communities of practice may share common values,
language, procedures, know-how, etc. They are a source of learning and a repository for tacit,
explicit, and embedded knowledge.

Structural: Embedded knowledge found in processes, culture, etc. This may be understood by
many or very few members of the organization. E.g. the knowledge embedded in the routines
used by the army may not be known by the soldiers who follow these routines. At times,
structural knowledge may be the remnant of past, otherwise long forgotten lessons, where the
knowledge of this lesson exists exclusively in the process itself.

Organizational: The definition of organizational knowledge is yet another concept that has very
little consensus within literature. Variations include the extent to which the knowledge is spread
within the organization, as well as the actual makeup of this knowledge.
It is: "When group knowledge from several subunits or groups is combined and used to create
new knowledge, the resulting tacit and explicit knowledge can be called organizational
knowledge." Others present a broader perspective: "individual knowledge, shared knowledge,
and objectified knowledge are different aspects or views of organizational
knowledge"

Organizational knowledge is therefore defined as: all the knowledge resources within an
organization that can be realistically tapped by that organization. It can therefore reside in
individuals and groups or exist at the organizational level.

Extra-organizational: Defined here as: Knowledge resources existing outside the organization
which could be used to enhance the performance of the organization. They include explicit
elements like publications, as well as tacit elements found in communities of practice that span
beyond the organization's borders.

From Physical Assets to Knowledge Assets

Knowledge has become increasingly more valuable than the more traditional physical or tangible
assets.

intellectual assets, which generally refer to an organization’s recorded information, and human
talent where such information is typically either inefficiently warehoused or simply lost,
especially in large, physically dispersed organizations

This has led to a change in focus to the useful lifespan of a valuable piece of knowledge. When is
some knowledge of no use? What about knowledge that never loses its value? The notion of
knowledge obsolescence and archiving needs to be approached with a fresh eye. It is no longer
advisable to simply discard items that are “past their due date.” Instead, content analysis and a
cost-benefit analysis are needed to manage each piece of valuable knowledge in the best possible
way.

Intellectual capital is often made visible by the difference between the book value and the market
value of an organization (often referred to as goodwill). Intellectual assets are represented by the
sum total of what employees of the organization know and what they know how to do. The value
of these knowledge assets is at least equal to the cost of re-creating this knowledge. The
accounting profession still has considerable difficulty in accommodating itself to these new
forms of assets.

Some examples of intellectual capital include:

1. Competence—the skills necessary to achieve a certain (high) level of performance

2. Capability—strategic skills necessary to integrate and apply competencies.
3. Technologies—tools and methods required to produce certain physical results.

Core competencies, found at a tactical level, are the things that an organization knows how to do
well and that provide a competitive advantage.
Some examples would be
a process,
a specialized type of knowledge,
or a particular kind of expertise that is rare or unique to the organization.

Capabilities, found at a more strategic level, are those things that an individual knows how to do
well, which, under appropriate conditions, may be aggregated to organizational competencies.
Capabilities are potential core competencies, and sound KM practices are required in order for
that potential to be realized. A number of business management texts discuss these concepts in
greater detail.
It should be noted that the more valuable a capability is and the less it is shared among many
employees, then the more vulnerable the organization becomes should those employees leave.

Knowledge management life cycle

major phases involved in the knowledge management cycle, encompassing the capture, creation,
codification, sharing, accessing, application, and reuse of knowledge within and between
organizations. Four major approaches to KM cycles are presented from Meyer and Zack (1996),
Bukowitz and Williams (2000), McElroy (2003), and Wiig (1993). A synthesis of these
approaches is then developed as a framework for following the path information takes to become
a valuable knowledge asset for a given organization.
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