Knowledge management is an introductory step that is useful in differentiating between raw information and knowledge. Raw information can be widely available to various agencies, but only a few organizations can manage to convert that information to relevant knowledge and use it to achieve their objectives. The process of converting this information to knowledge is referred to as knowledge management strategies (Baets, 2005).
The term knowledge management invokes a number of images such as customer service representation. Many firms undertake formal and informal knowledge management initiatives that are designed to improve organizational performance, spur innovation, and increase customer responsiveness. While some organizations continuously reap significant benefits from investments in knowledge efforts, others struggle with unworthy challenges.
Successful knowledge management programs start with assessing critical organizational problems that a business faces. However, a number of companies fail to connect their knowledge efforts with critical business issues. When such situations arise, plenty of time and effort is focused on projects of little importance, while key issues are left overlooked (King, 2009).
For instance, one may find a manufacturing company engaged in a knowledge-related initiative but failing to align its efforts with critical business objectives such as an integration of newly acquired subsidiaries. If an organization is unfamiliar with skills and expertise within the absorbed company, it loses important contracts that may have been won if combined knowledge was used (Carnegie Bosch Institute Workshop, 2005). Therefore, a company loses an important opportunity because its knowledge management efforts were not aligned with organization’s strategic goals.
Before introducing the subject of knowledge management, corporations focus on controlling and systematizing knowledge and knowledge sharing within organizations. However, in the current situation, the focus has shifted to enhancing conditions geared towards innovation and knowledge creation. This process involves related challenges and advantages to the development of the organization’s way of doing things. Many organizations find it more important to share information internally and more efficiently learn to adapt quickly to internal circumstances so as to retain their competitive advantage. Thus, responding to this situation, the formal way of knowledge management strategies focus on information systems and technology. Technical tools collect and codify existing knowledge and help an organization run more smoothly.
Generally, effective knowledge management with more collective and systematic processes ensures that an organization reduces costs as well as the number of mistakes. It, thus, ensures a significant improvement of the quality of a company’s products. Having a clear understanding of an entity’s shareholders’, employees’, customers’, and industry’s needs has an immediate effect that promotes management relationships. Thus, management contributes greatly to improving excellence through effective knowledge management. It provides a company with the following benefits: opportunities to grow and expand; dramatic cost reduction; improvement in value and profitability; faster response to customer queries; and improvement in quality of goods and services. In addition, effective knowledge management accelerates knowledge creation which is an important driver in innovation. It has been the major cause behind products and services becoming smarter day by day. An organization learns faster with its people developing their competencies and confidence at a faster rate than they used to (Easterby-Smith, 2003).
In conclusion, in order to stay competitive, organizations have to promote, develop, and embody knowledge management principles, policies, processes, strategies, tools and technologies in their routine activities of an organization’s life.