IT: How can organisations use knowledge management to achieve and sustain competitive advantage in today’s digital society? Essay

In today ‘s digital age, organisations can utilize knowledge direction to accomplish and prolong competitory advantage. Evidence from a wide scope of research sources-professional diaries, magazines, books, and commercial web sites-was used to back up this thesis.

In the essay, single presentations of the constructs associated with cognition direction and competitory advantage were presented to set up a foundation for researching how knowledge direction can be used by organisations in accomplishing and prolonging competitory advantage utilizing engineering as an enabler.

This essay adds to the organic structure of cognition by associating cognition direction to competitory advantage through the common construct of value, an built-in component of both knowledge direction and competitory advantage ; specifically, the value created by consciously pull offing cognition can be used to accomplish and prolong competitory advantage.

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Introduction

“ Knowledge is power. ”

The introductory citation attributed to Sir Thomas Bacon in 1597 ( Butler, 2000 ) merely, yet articulately, introduces the subject of cognition direction and its importance as a tool for accomplishing and prolonging competitory advantage. Knowledge is at least as of import in today ‘s competitory environment as it was more than four hundred old ages ago when Bacon made his celebrated announcement back uping his claim that “ the more one knows, the more one will be able to command events ” ( The Dictionary of Cultural Literacy, 1998 ) .

This essay responds to the inquiry “ How can organisations utilize knowledge direction to accomplish and prolong competitory advantage in today ‘s digital society? ” The essay begins with sum-ups of the constructs of cognition direction and competitory advantage to set up a foundation for discoursing how knowledge direction can be used to accomplish and prolong competitory advantage utilizing engineering as an enabler. A decision will sum up consequences of the research and analysis.

Knowledge Management and Competitive Advantage Concepts

The term cognition direction appears to hold flowed from direction guru Peter Drucker ‘s late 1980s description of cognition workers as people whose stock in trade was cognition ( Coleman, 1998 ) . Establishing a on the job definition for cognition direction is a dashing undertaking as there is yet no consensus definition for the term ( Shahnon, 2000 ; Trigg, 2000 ; Dueck, 2001 ) . A reappraisal of the literature revealed the undermentioned representative choices of definitions runing from reasonably simple descriptions to those of greater complexness:

aˆ?A A A Knowledge direction involves “ seting the corporate intelligence of your company at the users ‘ fingertips when they want it, and in the coveted format ” ( Ragsdale, 1999 ) .

aˆ?A A A Knowledge direction is “ [ T ] he procedure by which single acquisition and experience is accessed, reflected upon, shared and used to further enhanced single cognition and organisational value ” ( Coleman, 1998 ) .

aˆ?A A A Knowledge direction is “ [ T ] he tackling and administration of information assets that reside in the databases of an administration or in its employees ‘ corporate learning ability ” ( Shahnon, 2000 ) .

aˆ?A A A “ [ Knowledge ] direction means that cognition ( information ) is available, easy found, and reclaimable ” ( Russell, 2002 ) .

aˆ?A A A “ Knowledge direction can be viewed as a procedure for optimising the effectual application of rational capital to accomplish organisational aims, ” expressed another manner as “ the application of direction to knowledgeaˆ¦the procedures involved in making, bring forthing, sorting, hive awaying, administering, pass oning, orienting, and recycling cognition ” ( Pollock, 2001 ) .

As definitions for cognition direction abound, no attempt was made to offer yet another in this context ; instead, the analysis was focused on discerning and jointing the kernel of cognition direction. That kernel seemed to flux from a commonalty discovered in the selected definitions-a procedure orientation ; that is, there was an indicant of a series of stairss or provinces through which an organisation ‘s cognition moves during its life rhythm, get downing with creative activity and including harnessing, storage and organisation, distribution and communicating, entree and reusability, and orienting for specific user demands. Interestingly, nevertheless, none of the definitions address the retirement of cognition when it is no longer needed, a possible failing in the definitions of cognition direction, although Desenberg ( 2000 ) seems to suggest at the job in his claim that organisations are “ submerging in information ” and his place that organisations should be selective in its direction of cognition.

In sing cognition direction, experts seem to hold that cognition direction is more than merely pull stringsing information ; it is about making value for the organisation ( Trigg, 2000 ) . Russell ( 2002 ) contends that “ the simple exchange or transportation of cognition is non knowledge direction. ” O’Dell ( 2004 ) writes that “ the end [ of cognition direction ] is non to portion cognition for its ain interest, ” but to “ heighten organisational public presentation. ” Knowledge direction, so, appears to be a procedure targeted at making value for an organisation through consistently optimising its cognition resource.

Now attending displacements from cognition direction to the construct of competitory advantage. The modern construct of competitory advantage can be attributed in big portion to Michael Porter who, in 1985, defined the term as follows:

“ Competitive advantage grows basically out of value a house is able to make for its purchasers that exceeds the firm’s cost of making it. Value is what purchasers are willing to pay, and superior value stems from offering lower monetary values than rivals for tantamount benefits or supplying alone benefits that more than countervail a higher monetary value. There are two basic types of competitory advantage: cost leading and distinction. ”

Basically, harmonizing to Flint ( 1999 ) , “ competitory advantage comes from the value that houses create for their clients that exceeds the cost of bring forthing that value. ” Flint notes that the most of import consideration for an organisation is to capture the value that is greater than its cost and stresses the importance of sustainability of competitory advantage to superior public presentation. Barney ( 1991, cited in Flint, 1999 ) provides insight into the differences between “ accomplishing ” and “ prolonging ” competitory advantage. An organisation has achieved competitory advantage, harmonizing to Barney, when “ it is implementing a value-creating scheme non at the same time being implemented by any current or possible rivals. ” Barney continues, composing that an organisation has “ a sustained competitory advantage when it is implementing a value-creating scheme non at the same time being implemented by any current or possible rivals and when these other houses are unable to double the benefits of this scheme. ” Barney ( 1995 ) besides defines several related footings such as “ impermanent competitory advantage, ” “ comparative para, ” and “ competitory disadvantage, ” but these footings are outside of the range of the current treatment.

This subdivision was focused on cognition direction and competitory advantage as single constructs. The research showed that cognition direction involves witting direction of cognition to make value for an organisation. The research besides showed that accomplishing and prolonging competitory advantage involves the value organisations create for their clients, value that exceeds the cost of making it.

Using Knowledge Management to Achieve and Sustain Competitive Advantage

Attention now turns from depicting cognition direction and competitory advantage as two distinguishable footings to a treatment of how knowledge direction can be applied in accomplishing and prolonging competitory advantage with a particular accent on how, in today ‘s digital age, engineering can be leveraged to help organisations in their cognition direction activities.

From the predating treatment of the single constructs of cognition direction and competitory advantage, one similarity comes to the bow ; that is, value stands out as an of import component in the description of each term-knowledge direction is used to make value for the organisation and competitory advantage requires value created for clients. This common element-value-provides the foundation for cognition direction to play a portion in helping organisations in their attempts to accomplish and prolong competitory advantage.

Leidner ( 2002 ) writes that “ [ O ] rganizations are implementing cognition direction patterns and engineerings on the promise of increasing their effectivity, efficiency, and fight. ” Shahnon ( 2000 ) suggests that organisations which “ assure more cognition as portion of their services ” place themselves more competitively, adding that organisations should to the full utilize their embedded cognition resources. Gantz ( 1998 ) contends that if “ knowledge-intensive houses can implement knowledge direction, they can derive competitory advantage. ” An article in The Information Advisor ( 1997 ) claims that direction gurus Peter Drucker, Tom Peters, and others go so far as to postulate that “ the lone existent competitory advantage a house can number on today is the accomplishments, expertness and cognition of the staff. ” Drucker ( 1995, cited in Broadbent, 1998 ) , in fact, wrote: “ Knowledge is progressively seen as a primary concern plus and knowledge direction as a cardinal discriminator between houses. ”

On the issue of prolonging competitory advantage, knowledge direction expert Larry Prusak ( 1996, cited in The Information Advisor, 1997 ) claims that “ ”the lone thing that gives an organisation a competitory edge-the merely thing that is sustainable-is what it knows, and how fast it can cognize something new.”A Shahnon ( 2000 ) writes that an organisation ‘s cognition is its “ merely sustainable competitory advantage. ” Birkinshaw ( 2001 ) contends that “ in a fast moving, progressively competitory universe a house ‘s merely digesting beginning of advantage is its knowledge-the cognition of its employees and the cognition that gets built into the organisation. ”

The concern literature is full with mentions back uping the function of cognition direction in accomplishing and prolonging competitory advantage, including those quoted in the preceding paragraphs and others ( Jackson, 2001, mentioning Hedlund, 1994 ; Evans, 1997 ; Hibbard, 1997 ; Martinez, 1998 ; Trussler, 1998 ) . In today ‘s digital age, engineering can be used to leverage cognition through the application of cognition direction as an enabling tool in helping organisations in their attempts to accomplish and prolong competitory advantage. In the earlier treatment of cognition direction the stairss or provinces through which cognition passes-creation, harnessing, storage and organisation, distribution and communicating, entree and reusability, and orienting for specific user needs-were identified. The ground that engineering, specifically information systems engineering, is appropriate to knowledge direction can be attributed to its capacity to “ form and pull strings informations ” ( Webopedia, 1998 ) which is basically and ideally suited to these undertakings.

Some feel that cognition direction is an “ IT [ information engineering ] job looking for a solution ” ( Abell, 2002 ) . Others, as Shahnon ( 2000 ) suggests, postulate that “ cognition direction has little to make with engineering ” and more to make with organisational civilization. To set engineering in its proper perspective vis-a-vis cognition direction, it is of import to observe that it is one of three constituents, each of which is critical for success: engineering, people, and processes that “ bring people and information together ” ( Trigg, 2000 ) . O’Driscoll ( 2002 ) echoes Triggs appraisal, naming cognition direction scheme “ a tripartite and systematic focal point on procedure, people and engineering. ” In this context, information engineering serves as an enabler as was suggested in the debut to this essay ; it enables people to execute cognition direction processes more expeditiously and efficaciously. This combination of people, procedures, and engineering and the resulting efficiencies and effectiveness it produces are what provide an organisation with “ valueaˆ¦that exceeds the cost of bring forthing that value, ” as Flint ( 1999 ) suggests.

Today, engineerings applied in cognition direction depend to a great extent on information architecture and content direction ( Abell, 2002 ) . Information architecture is “ the design of the construction and pilotage of a Web site, leting a site’s users to readily happen information and perform of import undertakings ” ( PR Newswire, 2000 ) . Contented direction is the attack to pull offing paperss for cyberspace and intranet Web sites ( Computer Desktop Encyclopedia, 2002 ) . Shahnon ( 2000 ) lists other back uping cognition direction engineerings that are already familiar to information engineering professionals: groupware, information excavation, document direction, and hunt and retrieval. Caldwell ( 2004 ) claims that engineerings such as “ [ vitamin D ] esktop personal cognition hunt, instant messaging, Google, free VOIP, P2P file sharing and coaction suites, societal webs, RSS, web logs and wikis are all doing it possible for single cognition workers to take control of the direction of rational capital within the endeavor. ”

The essay opened with single presentations on the constructs of cognition direction and competitory advantage. The research indicated that the intent of cognition direction was to make value for an organisation. Likewise, the research indicated that organisations achieve and sustain competitory advantage by making value for their clients. For competitory advantage to be, this value must transcend the cost of making it. A hunt of the literature provided legion accounts of the linkage between cognition direction and competitory advantage. The research showed engineering to be an enabler through which an organisation can increase its efficiency and effectivity in pull offing cognition thereby making value at a decreased cost-a cardinal demand for accomplishing and prolonging competitory advantage.

Abell, Angela ( 2002 ) Is there life after cognition direction? Information Outlook, April 1, 2002.

Barney, Jay ( 1991 ) . Firm resources and sustained competitory advantage. Journal of Management, 17, 99-120. Cited in Flint, Gerald David ( 1999 ) What is the significance of competitory advantage? Global Competitiveness, January 1, 1999.

Barney, Jay B. ( 1995 ) Information engineering and sustained competitory advantage: a resource-based analysis. MIS Quarterly, December 1, 1995.

Birkinshaw, Julian ( 2001 ) Making sense of cognition direction. Ivey Business Journal, March 1, 2001.

Broadbent, Marianne ( 1998 ) The phenomenon of cognition direction: what does it intend to the information profession? Information Outlook, May 1, 1998.
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Desenberg, Jon ( 2000 ) Traveling past the information age: Acquiring started with cognition direction. The Public Manager, June 22, 2000.

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Drucker, P. ( 1995 ) Pull offing in a clip of great alteration. Truman Alley Books – Dutton: New York, 1995. Cited in Broadbent, Marianne ( 1998 ) The phenomenon of cognition direction: what does it intend to the information profession? Information Outlook, May 1, 1998.
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Evans, B. ( 1997 ) . Knowledge management-fuel for invention. Information Week Online ( hypertext transfer protocol: //www.informationweek.com ) , October 20, 1997. Cited in Jackson, Lisa Ann ( 2001 ) Knowledge direction: Understanding theory and developing scheme. Competitiveness Review, January 1, 2001.

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Gantz, John ( 1998 ) Knowledge direction: Some there at that place. Computerworld, October 12, 1998.

Hedlund, G. ( 1994 ) A theoretical account of cognition direction and the n-form corporation, Strategic Management Journal, 15, 73B90. Cited in Jackson, Lisa Ann ( 2001 ) Knowledge direction: Understanding theory and developing scheme. Competitiveness Review, January 1, 2001. Cited in Jackson, Lisa Ann ( 2001 ) Knowledge direction: Understanding theory and developing scheme. Competitiveness Review, January 1, 2001.

Hibbard, J. ( 1997 ) . Knowledge direction: cognizing what we know. Information Week Online ( hypertext transfer protocol: //www.informationweek.com ) , October 20, 1997 ) . Cited in Jackson, Lisa Ann ( 2001 ) Knowledge direction: Understanding theory and developing scheme. Competitiveness Review, January 1, 2001.

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Russell, Karen Golden ( 2002 ) What is knowledge direction? Successful cognition direction means everyone wins. The company runs more expeditiously, and employees boost their value to the company when they portion information. Evaluation Engineering, November 1, 2002.

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