Knowledge Management a Competitive Advantage Business Essay

A In the twenty first century landscape with all its uncertainty and dynamism, many firms are competing in a complex andA challenging environment which is being transformed by many factors ranging from globalization, technologicalA development and increasingly rapid diffusion of technology, to the development and use of knowledge (Hitt, Keats, andA DeMarie, 1998).A As such, the foundation of organizational competitiveness has shifted from an emphasis on physical and tangibleA resources to knowledge (Wong and Aspinwall, 2005) and managing knowledge-based resources has become the key forA sustaining competitive advantage (CA) and superior performance (Grant, 1996b; Grover and Davenport, 2001; Jackson,A Hitt, and DeNisi, 2003; Sharkie, 2003; and Teece, Pisano, and Shuen, 1997). To deal with this enhancedA dynamism and uncertainty of the business environment, one of the current strategic philosophies assisting firms to develop strategic capabilities is the knowledge management. It helps the organizations to systematically acquire,A create, share, and use knowledge so as to develop, renew, and exploit theirA knowledge-based resources, thereby allowing them to be proactive and adaptable to externalA changes and attain competitive success.A

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Review literature:-

Under the light of the previous researches, some researchersA (Davenport and Prusak, 1998; (Zack, 1999) (Alavi & Leidner, 2001) noted that competitive advantage isA realized only when the organization’s tracking methodsA and ways are efficient and distinctive and one of thoseA ways is through the knowledge management of the organizationA that have achieved competitive advantage not forA a specific period, but a long term.A (Gupta & Mcdaniel, 2002) studied knowledge managementA and competitive advantage by examining theA vital link between the management of knowledge inA contemporary organizations and the development of aA sustainable competitive advantage. The used variablesA are conceptualized in terms of organizational effectiveness,A efficiency, core competency, costs; knowledgeA acquirement, knowledge filtering, knowledge configuration,A knowledge dissemination and knowledge application. (Goh, 2005) also identified that the field of knowledgeA management has emerged strongly as the next source ofA competitive advantage. (Ismail & Ong, 2008). Emphasized that firms canA achieve the sustainable competitive advantage by informationA technology facilities. He sees that even if a firmA owned the most sophisticated information technologyA facilities which are impossible for the competitors toA imitate or substitute, and for sure it is rare, but if there isA no knowledgeable personnel in the organization, or the knowledgeable personnel in the organization is not willingA to utilize these facilities, these facilities would not generateA any value to the organization. Obviously, to achieveA sustainable competitive advantage, knowledge, willingnessA to use operations and availability of facilities mustA co-exist.A Hence, the question before the organizations is “how should theyA develop a knowledge management system to coordinateA people, technology and infra-structure to createA advantages competitiveness and sustainability inA business environments?


Knowledge is a different term from data and information. Data is simply raw facts, measurements etc. Information is organized or processed data that is timely and accurate. Knowledge as defined by (Tiwana, 2000) is the actionable (relevant) information available in the right format, at the right time, and at the right place for decision making. For example, sales of a particular year will be simply data, if we process the sales data and find sales in the north region is more, it will be information. By applying our experience we can conclude that south region requires more marketing efforts than north, it is knowledge. Knowledge is a valuable source for the organization because it helps the organization in taking important decisions in the rapid changing business environment. Knowledge is dynamic in nature. This implies that today’s knowledge may well become tomorrow’s ignorance if an organization fails to update knowledge as environmental conditions change.

Definition of Knowledge Management:-

Knowledge management is an emerging concept and has got many different definitions. The term knowledge management was first introduced in a 1986 in a European management conference. Alternative definitions have been proposed since that attempt to capture the complexities of knowledge management. The 20A American Productivity and Quality Center defined knowledge management as “the strategies and processes of identifying, capturing and leveraging knowledge”. (knapp, 1998) defined knowledge management as “the art of transforming information and intellectual assets into enduring value for an organization’s clients and its people”. Darroch also defined knowledge management as “the process that creates or locates knowledge and manages the sharing, dissemination, and use of knowledge within the organization”. A The traditional definitions of knowledge management focused only on the knowledge that is recognized and already articulated in some form. However, increasingly, knowledge management is also incorporating the managing of important tacit knowledge (Sabherwal A & Becerra-Fernandez, 2003). Davenport and Prusak (1998) defined knowledge A management as the management of a corporation’s knowledge through a systematic and A organizational specified process for acquiring, organizing, sustaining, applying, sharing, A and renewing both tacit and explicit knowledge from employees to improve A organizational performance and to create value. A Wiig (1994) suggested that knowledge management in an organization must be A considered from three perspectives, each with different scopes and purposes: (a) aA business perspective – focusing on why, where, and to what extent the organization must A invest in or exploit knowledge, and which strategies, products and services, alliances, A acquisitions, or divestments should be considered from a knowledge-related point of view; A (b) a management perspective – focusing on determining, organizing, directing, and A monitoring knowledge-related activities required to achieve the desired business strategies and objectives; and (c) a hands-on operational perspective – focusing on A applying the professional skill to conduct explicit knowledge-related work and tasks. A In fact, knowledge management is a principle that is aimed at satisfying and exceeding the customer’s expectations (Keskin, 2005). Knowledge management is a relatively new business philosophy. The goal of knowledge management is to identify, capture, store, maintain, and deliver useful knowledge in a meaningful form to anyone who needs it, anyplace and anytime, within an organization. Knowledge management is about sharing and collaborating at the organizational level. Knowledge management has the potential to revolutionize the way we share expertise, make decisions, and conduct business.

History of knowledge management:-

Knowledge management era started with the use of different programs which include on-the-job discussions, formal apprenticeship,A discussion forums, corporate libraries, professional training and mentoring programs. The use of computers in the second half of 20th century brought a revolution in the knowledge management field. It resulted in the specificA adaptationsA of technologies such asA knowledge bases,A expert systems,A knowledge repositories,A group decision support systems,A intranets, andA computer-supported cooperative workA which developed the emerging knowledge management field to a large extent. In 1999, the termA personal knowledge managementA was introduced which refers to the management of knowledge at the individual level (Wright, 2005). In terms of the enterprise, early collections of case studies recognized the importance of knowledge management dimensions of strategy, process, and measurement (Morey, Maybury & Thuraisingham 2002. Recently with the use of theA Web 2.0, the concept of Knowledge Management has taken into consideration the participation of people andA emergence. This line of evolution is termedA Enterprise 2.0A (McAfee 2006). However, there is an ongoing debate and discussions (Lakhani & McAfee 2007) as to whetherA Enterprise 2.0A is just a fad that does not bring anything new or useful or whether it is, indeed, the future of knowledge management (Davenport T. , 2008)

Knowledge management cycle:-

TheA knowledgeA managementA cycleA asA givenA byA ‘Turban’A involvesA sixA steps.A ToA keepA theA knowledgeA managementA systemA effective,A theA knowledgeA hasA toA beA updatedA withA time.A TheA knowledgeA managementA cycleA worksA asA follows:- CreateA knowledge:A A knowledgeA creationA isA theA generationA ofA newA ideas,A insightsA orA routin.A ItA involvesA developingA newA waysA ofA doingA thingsA orA developsA knowhow.A SometimesA newA knowledgeA isA broughtA inA orA sometimesA ownA knowledgeA isA improved. CaptureA knowledge:A A newA knowledgeA mustA beA identifiedA asA valuableA andA beA representedA inA aA reasonableA way. RefineA knowledge:A A newA knowledgeA mustA beA placedA inA contextA soA thatA itA isA reused.A ThatA isA whereA humanA insightsA mustA beA capturedA alongA withA explicitA facts. StoreA knowledge usefulA knowledgeA mustA beA storedA inA knowledgeA repositoryA soA thatA others inA anA organizationA canA accessA it. ManageA knowledge:A A aA knowledgeA repositoryA mustA beA updatedA soA thatA itA holdsA theA currentA dataA thatA isA relevantA andA accurate. Create knowledge Capture knowledge Refine knowledge Store knowledge Manage knowledge Disseminate knowledge DisseminateA knowledge: knowledgeA mustA beA madeA availableA inA aA rightA formatA toA anyoneA inA theA organizationA whoA needsA it,A anywhereA andA anytime. A (turban, sharda, & delen)

BenefitsA ofA knowledgeA management:-

WithinA theA usageA ofA KnowledgeA Management,A theA companyA canA haveA followingA advantages:- InnovationA withA theA helpA ofA flowA ofA ideas:A TheA knowledgeA managementA programsA canA allowA employeesA andA departmentsA toA seeA theA overall statusA ofA theA companyA aboutA aA specificA developmentA field.A WithA theA helpA ofA thisA ability,A newA ideasA andA innovativeA techniquesA canA beA emergedA withA respectA toA theA existingA knowledge. ImprovingA theA customerA satisfactionA byA reducingA theA responseA time: WithA theA helpA ofA theA KnowledgeA ManagementA usage,A theA employeesA ofA theA companyA willA beA ableA toA findA theA opportunityA ofA appropriateA solutionsA toA customersA withA anA acceptableA responseA timeA becauseA KMA willA allowA themA toA findA theA necessaryA informationA aboutA theA demandA ofA theA customerA moreA relativelyA andA rapidly. IncreasingA theA revenues: WithA theA helpA ofA theA KM,A theA necessaryA productA andA serviceA thatA theA companyA providesA willA beA locatedA inA theA market,A withA theA helpA ofA theA rapidA interdepartmentalA communicationA toA useA theA rightA informationA atA theA rightA time. KeepingA employeeA dynamic:A TheA employeesA areA importantA toA beA keptA “alive”A duringA criticalA transactions.A WithA theA helpA ofA KnowledgeA Management,A theA informationA systemA thatA containsA theA functionsA ofA KMA canA recordA theA valueA ofA everyA employeeA andA allowsA managersA toA rewardA themA ifA theyA haveA criticalA additionsA toA theA businessA processA transactionsA ofA theA company. ProcessA reduction:A WithA theA helpA ofA KM,A theA costsA andA amountA operationsA canA beA reducedA byA eliminatingA theA redundancyA ofA processA phasesA andA unnecessaryA ones. SustainedA competitiveA advantage: A KMA canA allowA companiesA toA increaseA theA importanceA ofA intellectualA propertiesA andA knowledge-basedA assetsA thatA canA beA costlyA toA imitateA nA theA marketA thatA theA companyA locatesA in.A ThisA canA helpA theA companyA toA haveA aA competitiveA advantageA inA aA long-termA period. KnowledgeA managementA canA improveA theA totalA efficiency,A productivityA andA revenuesA inA anyA businessA transactionA ifA itA canA beA usedA well.

CompetitiveA advantage:- A

AsA theA globalA competitionA becomesA increasinglyA fierce,A howA toA achieveA competitiveA advantageA startsA obtainingA moreA attention. (Barney J. , 1991) notedA thatA whenA anA organizationA isA implementingA aA valueA creatingA strategyA notA simultaneouslyA beingA implementedA byA anyA currentA orA potentialA rivals,A thenA theA organizationA hasA aA competitiveA advantage.A AndA whenA otherA organizationsA areA unableA toA copyA theA benefitsA ofA thisA strategy,A itA confirmsA thatA theA organizationA hasA aA sustainableA competitiveA advantage.A InA 2008,A BarneyA distinguishedA twoA typesA ofA competitiveA advantage:A temporaryA andA sustainableA competitiveA advantage.A AccordingA toA him,A competitiveA advantageA typicallyA resultsA inA highA profits,A butA theseA profitsA attractA competition,A andA competitionA limitsA theA durationA ofA competitiveA advantageA inA mostA cases,A therefore,A mostA competitiveA advantageA isA temporary.A OnA theA otherA hand,A someA competitiveA advantagesA areA sustainableA ifA competitorsA areA unableA toA imitateA theA sourceA ofA advantageA orA ifA noA oneA conceivesA aA betterA offering.A Furthermore,A refers (Al-hawary & hani, 2009) toA competitiveA advantageA as,A toA createA someA barriersA thatA makeA firm’sA performanceA imitationA difficult.A ThatA is,A sinceA theA competitiveA advantageA isA atA theA heartA ofA firm’sA performance,A itA shouldA protectA itselfA fromA beingA despoiledA andA assimilateA newA sourcesA ofA technologies,A skills,A andA coreA competencies.

MichaelA porter’sA conceptA ofA competitiveA advantage:-

AccordingA toA porter,A whenA aA firm’sA profitsA areA moreA thanA theA industry,A it’sA saidA toA haveA aA competitiveA advantage.A MichaelA porterA identifiedA twoA typesA ofA competitiveA advantage:- costA advantage differentiationA advantage CostA advantageA isA enjoyedA byA theA firmA whenA itA producesA theA sameA productA asA itsA competitorsA butA atA aA lowerA cost.A DifferentiationA advantageA resultsA whenA aA firmA deliversA benefitsA thatA exceedA thoseA ofA competingA products.A ThusA aA competitiveA advantageA enablesA theA firmsA toA deliverA superiorA valueA toA customersA andA superiorA profitsA forA itself.


KnowledgeA managementA aA competitiveA advantage:-A

KnowledgeA managementA helpsA inA gainingA competitiveA advantageA inA theA followingA ways:- KnowledgeA managementA canA IncreaseA productivityA ofA anA organizationA byA applyingA effectiveA organizationalA knowledgeA management.A ByA havingA yourA knowledgeA processesA inA aA structure,A itA willA allowA thoseA withA theA necessaryA knowledgeA toA quicklyA shareA orA applyA itA andA youA canA reduceA wastefulA meetingsA andA inefficientA knowledgeA bottlenecks.A ThisA willA helpA youA getA moreA workA hoursA fromA yourA employeesA andA createA aA costA advantage. TheA technologicalA solutionsA canA beA appliedA inA anA organizationA forA knowledgeA dispersalA withinA anA organization.A ByA offeringA easier,A moreA intuitiveA waysA forA yourA employeesA toA createA andA shareA knowledge,A yourA companyA canA produceA moreA andA betterA knowledgeA thanA yourA competitors,A thusA gainingA aA qualityA advantage. FosterA andA rewardA theA sharingA ofA knowledge.A WhetherA creatingA master/apprenticeA relationshipsA orA monetarilyA rewardingA thoseA whoA shareA knowledgeA withinA yourA company,A takeA stepsA toA ensureA thatA everyA employeeA isA tryingA toA shareA usefulA knowledge. It’sA theA knowledgeA managementA toolsA thatA helpA theA organizationA inA identifyingA theA unmetA needs.A HavingA aA proactiveA approachA toA satisfyA thoseA needsA isA definitivelyA goingA toA provideA anA organizationA aA competitiveA advantage.A GoodA knowledgeA managementA alsoA allowsA inA identifyingA theA nicheA marketsA andA byA addressingA theA needsA inA theseA nicheA marketsA isA going A toA proveA oneA ofA theA attributeA ofA yourA organizationA success. AlmostA allA organizationsA areA usingA theA knowledgeA managementA toA remainA competitiveA inA market.A TakingA theA exampleA ofA WallMart,A theA world’sA largestA retailA corporationA ,A itA viewsA theA knowledgeA managementA notA onlyA asA aA wayA ofA enhancingA profitabilityA andA financialA growthA butA alsoA asA aA wayA ofA remainingA competitiveA inA aA turbulentA worldA ofA businesses.A ItA hasA investedA aA largeA amountA ofA moneyA inA buildingA aA strongA knowledgeA managementA system.A ItA isA becauseA ofA theA effectiveA kmA systemA thatA itA hasA emergedA asA theA world’sA largestA corporation.A WallMartA employsA differentA toolsA ofA knowledgeA managementA toA remainA competitiveA inA market.A StartingA fromA theA simpleA toolsA ofA knowledgeA managementA likeA onthejobA discussions,A formalA apprenticeship,A discussionA forums,A corporateA libraries,A professionalA trainingA andA mentoringA programsA toA theA advancedA technologiesA likeA knowledgeA bases,A expertA systems,A knowledgeA repositories,A groupA decisionA supportA systems,A intranets,A andA computersupportedA cooperativeA work,A itA usesA eachA andA everyA technologyA ofA knowledgeA managementA toA haveA aA competitiveA edgeA inA theA market.A TheA knowledgeA managementA helpedA theA WallMartA inA cuttingA operationalA costsA andA buildingA upA aA valueA forA itsA shareholders.A TheA employeesA inA WallMartA areA veryA muchA satisfiedA withA theA knowledgeA managementA systemA functionalA inA almostA allA units.A WithA theA toolsA ofA knowledgeA managementA theA bestA employeesA inA WallMartA areA chosenA andA accordinglyA rewardsA areA given.A TheWallMartA storesA reliableA knowledgeA managementA skillsA haveA resultedA inA enhancedA efficiencyA inA serviceA deliveryA andA customerA careA asA wellA asA developmentA ofA greatA competition.Hence,A anA effectiveA knowledgeA managementA systemA isA oneA ofA theA drivingA forcesA forA WallMartA forA itsA greatA success.A TheA otherA examplesA thatA provedA thatA effectiveA knowledgeA managementA canA helpA achieveA organizationA goalsA andA helpA inA remainingA competitiveA inA marketA areA sportswearA giantsA AdidasA andA Nike. (KNOWLEDGE-MANAGEMENT-A-CASE-STUDY-OF-WALLMART)


CompetitiveA advantageA isA atA theA heartA ofA aA firm’sA performanceA inA today’sA challengingA andA rapidlyA changingA environment.A ToA secureA theA competitiveA advantage,A firmsA shouldA beA ableA toA continuouslyA acquire,A createA andA disseminateA knowledgeA acrossA variousA levelsA ofA theA organization.A KnowledgeA isA centralA toA strategyA formulationA andA Implementation,A knowledgeA managementA hasA becomeA aA keyA strategicA taskA facingA managersA forA achievingA successA inA today’sA complexA andA dynamicA environmentsA (MuthusamyandA Palanisamy,A 2004).A TheA shiftingA windsA ofA changeA inA today’sA businessA environment,A whereA theA MarketA placeA isA increasinglyA competitiveA andA theA rateA ofA innovationA isA rising,A haveA madeA EnterprisesA realizeA thatA knowledgeA isA theirA keyA asset.A ItA isA pointedA outA thatA theA mostA valuableA AssetsA ofA theA 21stA CenturyA enterpriseA isA itsA knowledgeA andA knowledgeA workers(SunmanA andA Kruger,A 2004).A ItA isA arguedA thatA knowledgeA isA displacingA naturalA resources,A capitalA andA laborA asA theA basicA EconomicA resourceA inA theA “newA economy.A KnowledgeA mostlyA theA tacitA knowledgeA isA hardA toA imitateA soA effectivelyA managingA suchA typeA ofA knowledgeA inA anA organizationA isA definitelyA goingA toA leadA theA organizationA toA aA placeA whichA forA othersA willA beA difficultA toA achieve.A KnowledgeA managementA helpsA usA inA identifyingA unmetA needsA inA theA market.A HavingA aA proactiveA approachA toA satisfyA theseA needsA isA goingA toA placeA yourA organizationA aboveA allA inA theA turbulentA competitiveA businessA environment.A So,A everyA OrganizationA shouldA startA thinkingA ofA aA soundA knowledgeA management,A becauseA inA aA knowledge-drivenA economyA it’sA theA onlyA sourceA ofA achievingA successA overA others.

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Knowledge Management A Competitive Advantage Business Essay. (2017, Jun 26). Retrieved January 21, 2022 , from

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