The twenty first century is described as the Knowledge Century. The primary driver of wealth creation seems to have shifted from industry and technology to knowledge. Therefore, the concept of Knowledge Management has become a major force in economic thinking in recent years. Many large organizations are embracing Knowledge Management and claiming significant benefits. Research studies conducted across the world have demonstrated with strong empirical data that many of the world’s most successful organizations are those that are best at managing their knowledge. Experts defines Knowledge Management as a set of processes directed at “creating, capturing, storing, sharing, applying, and reusing” knowledge. Another view of Knowledge Management is that it is a systemic and organizationally specified process for acquiring, organizing, and communicating knowledge of employees so that other employees may make use of it to be more effective and productive in their work. Knowledge Management is also explained as the science of collecting organizational knowledge and, by recognizing and understanding relationships and patterns, turning it into usable, accessible information and a valuable source of wealth creation.
The basic benefits of Knowledge management include improving products, processes and productivity and gaining competitive advantage through embedding knowledge management processes into daily work related activities. By capturing, sharing, and generating knowledge to stimulate innovation and achieve success, Knowledge Management enables the organization to fully understand its operating environment, customers, market dynamics and the competition. Effective Knowledge Management also helps to keep good relationships with clients by increasing customer knowledge, designing relevant products, expediting response to customer queries, suggestions, and complaints. It also ensures improved consistency and quality when serving customers.
There are two main motivations for an organization to implement Knowledge Management. The first one is to generate, communicate, preserve and share knowledge internally and externally. This means that the organization can prevent knowledge loss and develop knowledge assets. Furthermore, good Knowledge Management enables organizations to retain critical expertise and prevent critical knowledge loss resulting from retirement, downsizing, employee departures and changes by building an organizational economy. It also improves the organization’s ability to capitalize on legal protection for intellectual property. The second one is to ensure a vibrant and motivated workforce that is constantly opening new opportunities of wealth creation.
Dr. Prem Kumar
Distinguished Professor, BML Munjal University
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