The concept of knowledge as the founding block for attaining competitive advantage has become quite prevalent in Management studies. All knowledge should begin form a piece of information. For the conversion of information into knowledge there is a critical aspect to be noted. This is related to the timing of the retrieval of information. The information should be retrieved at the time when it is relevant based on the circumstances under which it is going to be applied. Occasionally situations can be different than those in the past requiring additional scrutiny of the existing information. In certain other situations the existing conditions can be so different that it will necessitate entirely new information. Thus the information past its time is obsolete for utility. But the information at the right time can result in knowledge which can be useful for the organization
There are two aspects for knowledge:
Knowledge Management - this concentrates on the efficiency with which knowledge is used
Knowledge Creation - this concentrates on generating new knowledge
The resource-based view of the firm transformed the till then existing notion that internal knowledge is inferior in relation to market activities of the business. The previously existing strategy theories gave importance to market position and strategic choice.
On the other hand the resource-based view claimed that the competitive advantage is obtained from distinctive capabilities and know-how. According to this theory, knowledge and competencies possessed by the organization are the significant sources of business success in the present global world. The pursuit for promoting and fostering capabilities emerges as the main focal point for firms. It is in this circumstance that the concept of knowledge management has come to the forefront and attained extensive recognition among top management.
The second aspect of knowledge, namely knowledge creation depends on the below factors:
the genuineness and comprehensiveness of information
consequential extraction of the information
newly attained knowledge when the extraction are viewed and deciphered
situations bordering a definite function that make the knowledge utilizable
For knowledge creation and management to happen the organization has to become knowledge-centric. This is possible by building up an organizational context that assists the swift advancement of new knowledge. This organizational context encompasses the organizationâ€™s leadership, culture, structure and infrastructure.
In a knowledge-centric organization, the organizational context is expected to exhibit the below mentioned attributes:
Leadership - a foresight and leadership style which encourage learning and innovation and which promote an organizational culture, structure and infrastructure favourable to learning
Culture - exceedingly encourages experimentation and the exchange of ideas and values learning
Structure - advances the exchange of ideas by focussing capabilities together and simultaneously has systems that permit ideas to be conveyed across the entire organization
Infrastructure - the constitution and utilization of information and communications technology to keep and communicate knowledge.