Importance Of Knowledge Management

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INTRODUCTION In order to transform knowledge into intellectual property, employees have to be willing to share their experience and knowledge with other members of the organization. Knowledge is the power that enables organizations to improve productivity and to provide value to the group and individuals. Intellectual capital is the competitive value of any business system. The appeal of an organization or of belonging to a certain group depends upon the satisfaction of each group member. A manager, who wants a team comprised of satisfied, motivated and productive members, must have the capacity for understand the human nature, individual differences, along with the efficient communication and adaptation skills. Such a leader also needs an…show more content…
Social capital influences the development of intellectual capital and thereby impacts the economic performance of organizations. Consequently, social capital can impact not only economic transactions, but also production, loyalty and risk taking (Nahapiet and Ghoshal, 2000). The importance of knowledge, as a vital resource, for the world’s economies has long been underlined in science and politics (European Council, 2000). The process of knowledge management is based on the ability of all members of the organization to add value to the basic business processes through the creation, communication, codification, and coordination of both explicit and tacit knowledge stores (Nonaka and Takeuchi, 1995). The entire process of transformation from classical to knowledge organization has been a crucial step in improving and achieving a learning team. The idea of a learning organization is based on team-building, in which the organization’s capacity for innovation and growth is constantly being enhanced, leading to continuous growth and transformation (Watkins and Marsick, 1993). Davenport and Prusak (1998, p.5) defined knowledge as a fluid of framed experience, values, contextual information, and expert insights that provides a framework for evaluating and incorporating new experiences and information. It originates in and is applied in the minds of knower’s. Subsequently, knowledge is often situated within…show more content…
As Gregory (1981) noted, the possession of knowledge provides a pool that can be called upon to solve problems and facilitate understanding. Organizations have to create successful knowledge strategies for generating greater value through knowledge via products, people and processes. Knowledge organization is a learning organization that is skilled at creating, acquiring and transferring knowledge and „at modifying its behavior to reflect the new knowledge and insights” (Garvin, 1993, p.80). Knowledge can be seen as “a dynamic human process of justifying personal belief toward the truth” (Nonaka and Takeuchi, 1995, p.58), or we can conclude that “knowledge is not a picture or representation of reality; it is much more a map of those actions that reality permits. It is a repertoire of concepts, semantic relationships and actions or operations that have proven to be viable for the attainment of our goals” (Glasersfeld, 1997, p.
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