Knowledge Managment

Knowledge Management

Making decisions is one of the primary functions of an executive or manager. To efficiently perform this function, executives and managers must have convenient access to up to date information and detailed knowledge for specific business operations or business situations.

Knowledge is the major, non-tangible asset of any business. In essence, it is the 'intellectual capital' which should be carefully accumulated, preserved and utilized for increasing shareholder value and generating growth.


  • "During the 1980s, downsizing was the popular strategy to reduce overhead and increase profits, but the downside to being lean and mean soon became evident: When employees left, they took with them all the intellectual capital they had accumulated through the years. "They knew how to do things, how to sell things, even where things were stored," says an executive. "When that information left, organizations had to reinvent the wheel. And when you have to reinvent something, it's costing you money." (Forbes ASAP, April 7, 1997) Just as processes, structures and systems are required to manage a valuable 'tangible' company asset, (such as capital, equipment, people), knowledge, while not considered tangible, also has to be managed.



What is knowledge and why does it have to be managed?

In the business context, knowledge can be broadly defined as the cumulative "know-how" of all employees involved in your company's business activities. This ultimately distinguishes knowledge from data.

While the term 'data' refers to a collection of facts, the term 'knowledge' is used to denote "know-how" utilized for reasoning with already known facts to produce new facts, recommendations and forecasts.

In the course of their employment with a company, professionals in all divisions and at all organizational levels accumulate valuable knowledge. A significant part of this knowledge is distributed among various documents and computer systems. Another significant part is carried exclusively by employees and exists in their minds, personal notes, and company's verbal "know-how" and "folk stories".

When an employee moves on from a company, part of his business knowledge remains in the company while a substantial amount of it leaves with the employee. A large amount of accumulated knowledge is lost when employees are given new assignments or are transferred to other areas. Even though the loss of this accumulated knowledge, is hard to quantify, it is thought of as the most valuable enterprise asset of employees.  Corporate experience suggests that such losses can result in major disruptions and/or severe performance declines.


Knowledge management is the broad process of locating, organizing, producing, storing, preserving, transferring, and using corporate key expertise within an enterprise.


Good knowledge management practices should be seen as a crucial element for managing all internal business and operational processes and perhaps, more importantly, be seen as a major means of gaining and sustaining competitive advantage.

The complexity of corporate decision making increases constantly, and along with this, the body of associated corporate knowledge required also increases. Which technology should be used to successfully manage a knowledge base and reduce the risk of knowledge base loss?