Knowledge is identified as a multi-faceted concept, and is distinct from information and data. Data has been defined, by Haridimos Tsoukas and Efi Vladimirou, as raw entities, and information is understood as a meaningful pattern within these raw entities . Knowledge can be understood as a concept for solving problems. In particular, knowledge is a combination of rules, procedures, beliefs, and skills that positively contribute to solving organizational problems.
The key takeaway for executives is that knowledge is a resource that enables organizations to solve problems and create value through improved performance, and it is this point that will narrow the gaps of success and failure, leading to more successful decision-making.
Individual vs. Collective Knowledge
Knowledge can be classified into individual and collective knowledge. Executives recruit followers based on their individual knowledge, which refers to the individual’s skills, prior knowledge, and proficiencies (sometimes referred to competencies).
Collective knowledge, on the other hand, has been defined by Sharon Matusik as “organizing principles, routines and practices, top management schema, and relative organizational consensus on past experiences, goals, missions, competitors, and relationships that are widely diffused throughout the organization and held in common by a large number of organizational members” . Thus, collective knowledge is part of the executive’s protocol and comes fairly naturally at the higher echelons of the organization.
Executives follow Thomas Davenport and Laurence Prusak’s concern that concludes that if an executive cannot inspire his or her followers to share their individual knowledge with others, then this individual knowledge is not valuable to the organization . Therefore, like tacit knowledge, individual knowledge can become a valuable resource by developing an organizational climate of openness for members to exchange their ideas and insights.
Executives must create a climate of trust and openness for individuals to share individual knowledge. This concept is not new. Wolfgang Wagner and Katsuya Yamori show that new technologies drawing on social software systems through sharing individual knowledge around the organization can positively contribute to the creation of collective knowledge . Therefore, executives should build an atmosphere of trust and openness and use technology to convert individual knowledge into valuable resources for their organization to close the performance gap and help organizations prosper.
Executives now have been introduced to one important category of knowledge. Knowledge can be articulated, or shared, and executives now can assess whether knowledge is a valuable factor for commercial objectives.
3-Step Process for Knowledge Management
Executives still may wonder where knowledge is in the organization and how can it be captured, utilized, and enhanced when it comes to decision-making. Managing knowledge is not anything new; scholars have considered the various processes involved. Executives embrace the process perspective because it takes a task-based approach by translating the management of knowledge into various organizational processes. Accordingly, the process perspective develops a firm-specific approach by which organizational knowledge provides a significant contribution to business objectives through the context-dependent way it is managed. Process perspective also can help organizations identify their inefficiencies in each process, and subsequently recover them on an instantaneous basis, which enables executives to prevent further operational risk.
A s a good example of this, executives can look at a three-step process of knowledge accumulation, integration, and reconfiguration.
First, this model to managing knowledge reflects a more strategic and practical perspective, as it is process oriented and most applicable in the context of leading organizations. In this model, organizational knowledge is accumulated by creating new knowledge from organizational intellectual capital and acquiring knowledge from external environments. In doing this process, executives can develop a workplace that is effective in:
- Acquiring knowledge about new products/services within the industry.
- Benchmarking performance with competitors or industry.
- Using feedback to improve subsequent practices.
- Utilizing teams (e.g., committees or management teams) to manage knowledge resources.
- Developing and implementing education or training programs.
- Carrying out a career path program or recruitment program to acquire experts.
- Conducting organizational events (such as a “knowledge contest” or “knowledge fair”) that promote knowledge activities.
Second, knowledge is integrated internally to enhance the effectiveness and efficiencies in various systems and processes, as well as to be more responsive to market changes. In doing this process, executives can develop a workplace that is effective in:
- Monitoring or controlling organizational knowledge to keep product or services in line with market requirements.
- Regularly assessing knowledge requirements according to environmental changes.
- Linking the knowledge-sharing system using various software and programs.
- Defining “core knowledge” or “core competence” areas.
- Using expert groups to evaluate the quality and effectiveness of organizational knowledge.
- Disseminating organizational knowledge among employees.
- Rewarding individuals or teams based on the quality of knowledge generated.
Third, the knowledge within organizations needs to be reconfigured to meet environmental changes and new challenges. In this process, knowledge is globally shared with other organizations in the environment. In doing this, executives can develop a workplace that is effective in:
- Creating knowledge alliances with suppliers, customers, or other partners.
- Sharing knowledge management visions and goals with external partners (such as suppliers and customers or other partners) to develop collaborative activities, shared goals, and trust-based relationships with them.
- Extending (or linking) knowledge-related policies or rules (measurement, rewards) with external partners (such as customers, suppliers or other partners).
- Linking the knowledge sharing system with external partners (such as customers, suppliers or other partners).
- Facilitating and implementing activities such as conferences, contests, and seminars with external partners.
In conclusion, executives who manage knowledge and use it as an important driving force for business success find their organization to be more competitive and on the cutting edge. Executives now know that applying knowledge management using the process perspective is advantageous and good sound strategic implementation. I walk executives through a process of knowledge accumulation, integrating knowledge into day-to-day operations, and a continuous reconfiguration to recognize the changes occurring in external environments and to respond to them quickly and effectively.
 Tsoukas, H., and Vladimirou, E. (2001). “What is Organizational Knowledge?” Journal of Management Studies, 38 (7), 973-993.
 Matusik, S.F. (1998). “The Utilization of Contingent Work, Knowledge Creation, and Competitive Advantage.” The Academy of Management Review, 23(4), 680-697.
 Davenport, T.H., and Prusak, L. (1998). “Working Knowledge,” Boston, MA, Harvard Business School Press.
 Wagner, W., and Yamori, K. (1999). “Can Culture Be a Variable? Dispositional Explanation and Cultural Metrics.” In T. Sugiman, M. Karasawa, and C. Ward (Eds.), Progress in Asian Social Psychology, vol. 2, Seoul, Kyoyook-Kwahak-Sa Publishers.