KNOWLEDGE MANAGEMENT

Critical Perspective on Knowledge Management

Critical Perspective on Knowledge Management

Introduction

Firms around the world are entering a new era of business competition. Globalization of supply chains and the escalating pace of technological change have set the stage for the emergence of global network competition. In network competition, firms must not only compete with other firms for favorable positions within a trading network but also collaborate with trading partners to secure competitive advantage for their global supply chains. The ability to win in network competition hinges on competent management of knowledge resources. Indeed, knowledge management is rapidly becoming a critical core competence for achieving a sustainable competitive advantage. However, the efforts of many firms to develop knowledge management competence have been disappointing (Nonaka, 1994).

A key reason for the failure of knowledge management initiatives is that few managers understand either the nature of knowledge or how to manage it. Many managers mistake information processing for knowledge management. As a result, they narrowly focus efforts on improving information management by carrying out a series of disjointed projects. For example, a firm may undertake projects to enhance information infrastructure, improve information processes, or engage workers in developing a climate supportive of information sharing (Hansen, 1999).

Discussion and Analysis

Effective knowledge management strategies ensure a holistic approach by developing knowledge management as a core competence of the firm. Building knowledge management competence is like constructing a three-legged stool that rests equally on the climate, processes, and infrastructure for knowledge management (Figure 1.1). The tendency to focus on one leg while ignoring the other two can produce unfortunate effects. For example, focusing solely on infrastructure by adopting the latest technology can rob a firm of rich knowledge gained in processes that promote social interactions, both across functions within a firm and between firms in a supply chain. Similarly, investing time and money in new knowledge-sharing processes will fail if the climate encourages counterproductive behavior, such as knowledge hoarding. In this paper, we discuss the components of knowledge management competence and provide real-world examples of how these components work in global supply chains (Allen, 1977).

From Business Perspective Definition

We define knowledge management as a business process that promotes organizational learning by integrating a firm's approach to creating, sharing, and using knowledge resources. Knowledge resources make up a firm's intellectual capital. Although they include intellectual property such as patents and trademarks, knowledge resources are more than just intellectual property. Knowledge resources reflect the knowledge and experience of a workforce that allow a firm to produce a market offering that has value. They include the explicit and tacit knowledge of individual workers and workgroups as well as knowledge incorporated into organizational routines. For example, competitive intelligence gathered by the sales force is a knowledge resource. A manufacturer's production processes and the skill of production workers are knowledge resources. The ability of a purchasing department to manage a global sourcing program is a knowledge resource. When knowledge resources are carefully managed, they have the potential to create a sustainable competitive advantage in the global marketplace ...