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How Knowledge Management Works

Mostafa Sayyadi, Management Consultant and Business & Technology journalist
person using MacBook Pro

Executives today are more focused on strategic management decision making due to the hypercompetitive global environment and the public and private sector evaluation and opinion. Public organizations are attempting to function as private profit-wise while public companies have the Wall Street analysts continuously evaluating their every strategic move. Lee and Kim’s model for managing knowledge takes a strategic process oriented approach and is relevant to executive leadership. One of the prominent knowledge management scholars by the name of Nonaka suggests that executives  build a climate of openness for individuals to exchange ideas.

Knowledge is accumulated by creating new approach to gathering, evaluating, and disseminating information throughout the organizations. Executives inspire people to create new ideas and develop effective mechanisms to acquire knowledge from various sources such as suppliers, customers, business partners, and competitors. This is similar to a value-chain approach. Executives need to first support this approach for the model to work because they play a strategic role in expanding the knowledge accumulation through applying incentives as mechanisms to develop a more innovative climate and managing effective tools to acquire knowledge from external sources.

Executives then integrate knowledge internally to enhance the effectiveness and efficiencies in various systems and processes, as well as to be more responsive to market changes. Accumulated knowledge is synthesized to produce higher quality outcomes. Thus, knowledge integration focuses on monitoring and controlling knowledge management practices, evaluating the effectiveness of current knowledge, defining and recognizing core knowledge areas, coordinating expert opinions, sharing organizational knowledge, and scanning for new knowledge to keep the quality of their product or services continuously improving

Executives can promote knowledge integration by creating expert groups or steering committees to enhance knowledge quality and evaluate knowledge assets. Follower’s diversity of skills and interpersonal relations that is based on trust and reciprocity can improve the performance of group cohesiveness. Therefore, in the process of knowledge integration, knowledge enters organizational processes and provides valuable contributions to products and services. Executives as leaders steering the organizational strategy facilitate this process, by undertaking initiatives that improve knowledge transfer, thus enhancing the performance of employees and the implementation of effective changes to maintain the quality of products and services. The burden of success when effective implementation of knowledge integration is concerned is heavily dependent on the capabilities of the organization’s leaders.

Executives must also curtail the knowledge within organizations. This knowledge needs to be reconfigured to meet environmental changes and new challenges and at the same time should not be leaked to the competition in any shape or form unless agreed upon by senior executives.

When executives agree to share knowledge with other organizations in the environment, studies have shown that that knowledge is often difficult to share externally. One reason is that other organizations have too much pride to accept knowledge or are apprehensive to expose themselves to the competition. Therefore, executives may lack the required capabilities to interact with other organizations , or distrust sharing their knowledge. In addition, just the notion of creating an expert group or steering committee may be shortsighted because such groups may not have sufficient diversity to comprehend knowledge acquired from external sources .

On the other hand, executives are aware of networking with business partners is a key activity for organizations to enhance knowledge exchange. Networking is a critical concern for leaders in this process is developing alliances with partners in external environments. Executives and their expert groups and/or steering committees are the ones who can make final decisions about developing alliances with business partners.

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