KM as part of Strategic Management

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Information and Knowledge have become the fields in which businesses compete.

Sharing Best Practice

Knowledge Management Systems (KMS) capture best practices to disseminate their experience within the firm.

Sharing best practice means re-using and exploiting the knowledge gained by a subset of the organisation.

Increasingly important in organisations that depends on applying their expertise.

Problems often arise from employees who may be reluctant to share their knowledge.

Figure 21 illustrates several important factors:

Globalisation

For some multi-national organisations, each division of the organisation will perform similar operations and in such cases sharing best practice has the effect of 'cross-referencing' the parallel operations. However, many organisations exploit their multi-national presence by re-organising their supply chain to allow specialisation within different local subsidiaries to take advantage of local supply and demand conditions.

Rapid Change

This change in available technologies, along with the globalisation trend, creates a business environment of rapid change. This rapid change 'means that existing knowledge becomes obsolete faster and that employees must learn new skills in less time' (Pearlson & Saunders 2003).

Embedded Knowledge

Certain organisations sell their expertise and knowledge more or less directly through consultancy services. The sales of such firms are of 'intangible' goods. However, the value of physical goods such as consumer electronics and automobiles exceeds by many times the value of the raw materials of which they are composed. The difference, clearly, is generated through knowledge-intensive activity. Such activity includes research and development, engineering, materials innovation, design, customisation and marketing. It is through these processes that knowledge becomes 'embedded' in products and services.

Sustainable Competitive Advantage

Various factors have been identified as reasons for the systematic management of knowledge, such as:

• the increased mobility of workers
• the more rapid transmission of data and information by new technology
• the increased competition
• copying of products and processes globally mean that it is increasingly difficult to maintain competitive advantage

However, capability and culture generated by knowledge management, enables organisations to continuously innovate and thus have a sustainable competitive advantage in the knowledge culture itself, even if not in the individual innovations themselves.

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Reference(s)
	Book		Chaffey, D. & Wood, S. (2004) Business Information Management: Improving Performance Using Information Systems. Financial Times Prentice Hall: United Kingdom (UK), England, Essex, Harlow. [ISBN: 9780273686552]. [Available on: Amazon: https://amzn.to/3yZ6vdF].
	Book		Ichijo, K. & Nonaka, I. (2006) Knowledge Creation and Management: New Challenges for Managers. Oxford University Press: United Kingdom (UK), England, Oxfordshire, Oxford. [ISBN: 9780195159622]. [Available on: Amazon: https://amzn.to/3DaXaRB].
	Book		Pearlson, K. E. & Saunders, C. S. (2004) Managing and Using Information Systems: A Strategic Approach. 5th Edition. John Wiley & Sons: United States of America (USA), New York (NY). [ISBN: 9781118281734]. [Available on: Amazon: https://amzn.to/3TMqOTZ].

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Reference (or cite) Article
	Kahlon, R. S. (2013) KM as part of Strategic Management [Online]. dkode: United Kingdom, England, London. [Published on: 2013-01-26]. [Article ID: RSK666-0000077]. [Available on: dkode | Ravi - https://ravi.dkode.co/2013/01/km-as-part-of-strategic-management.html].

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