Knowledge management is generically promoted as the art and science of gathering information and transforming the knowledge into organizational advantages, such as core competencies or competitive advantages. In terms of the strategic components of the knowledge management processes, the generally accepted idea is that the processes can be applied organization wide. In other words, knowledge management can be strategically applied to develop and implement change strategies, to improve the quality of the tasks performed, to enhance operational efficiency, to create new products and service or to enhance the quality of the current products and services, to better manage risk and so on (Barclay and Murray, 1997).
The concepts and tools of knowledge management are relatively new and the specialized literature has taken several approaches and positions relative to the instruments, components and processes of knowledge management. (Hamid E & Richard W). Wright (2003) for instance look at knowledge management through cultural lenses. They start off at the simple example of the English elites interacting better with the Spanish elites, rather than with the English peasants. This example leads to the conclusion that knowledge has the ability to create groups united by similar access to and possession of knowledge. In other words, knowledge is a powerful criterion in creating social and economic groups which share similar features – the groups are homogenous within and heterogeneous in relation to other groups.
In the context of globalization, the cultural dimension of knowledge management translates into an even higher access to information. Additionally, in this age of rapid technological advancements, individuals and groups in different countries are no longer separated by geographic and time boundaries, as they can easily interact within the virtual environment. Within this virtual environment, promoted by globalization, knowledge management further separates the individuals with vast knowledge from the individual with limited intellectual possessions. In other words, it creates a wider gap between the knowledge rich individuals and the knowledge poor individuals.
At the organizational level, the findings can easily be extrapolated to conclude that economic agents with an increased access to information and vast knowledge are easily separated from those economic entities which possess limited intellectual capitals. These latter categories of companies stand decreased opportunities for succeeding within the new dynamic international marketplace.
Ann Macintosh takes a more complex position relative to knowledge management and argues that the necessity for the new tools and techniques in treating intellectual capital are the direct outcome of globalization. She argues that knowledge management was born out of an incremental necessity to overcome to intensifying competition, generated primarily by the evolving forces of globalization. In her view, Macintosh states that the strategic components of knowledge management have been created to answer the following challenges of a globalizing context:
– An incremental global competition
– A rapid rate of innovation which generates the need for a rapid absorption of information
– An incrementally more demanding customer base
– Decreasing numbers of staff members – the original possessors of knowledge
– Decreasing time allocated to knowledge gathering
– The aging and retiring of the population creates knowledge losses
– Several processes of organizational change – now extremely common – also lead to the loss of knowledge (Macintosh).
A third position on knowledge management – initially the more popular one – is the understanding of knowledge management as the management of information systems, and in this instance, a strict technological application. In its incipient stages, knowledge management would be promoted as an integrant party of information systems, which collect and process data. The processes would be complicated and based on strict statistical information. Yet, as time progressed, the understanding of knowledge management became clearer. Today, knowledge management as an information system within the organization is used for any of the following:
- “Creation of knowledge databases – best practices, expert directories, market intelligence etc.
- Efficient information management – gathers, filter, classify, storing etc.
- Incorporation of knowledge into business processes e.g. through the use of help screens in computer procedures or access to experts from icons
- Development of knowledge centers – focal points for knowledge skills and facilitating knowledge flow
- Reuse of knowledge at customer support centers e.g. via case-based reasoning
- Introduction of collaborative technologies, especially Intranets or groupware, for rapid information access
- Knowledge webs – networks of experts who collaborate across and beyond an organization’s functional and geographic boundaries
- Augmentation of decision support processes, such as through expert systems or group decision support systems” (Skyrme)
The Impact Of Globalization On These Strategic Components
A fourth angle in looking at knowledge management in the globalizing context is given by the decision making process. The decision making process has evolved from its stage of natural evolution to its modern place of multiple choices and multiple scenarios, determined and influenced by countless variables. And this context has been created and promoted by a globalizing context in which economic agents are confronted with more opportunities, but also more challenges.
In this international setting, the intellectual capital is pivotal in making the best decision. An adequate system of knowledge management will ensure that the managers possess sufficient and relevant information regarding the competitors’ strategies, the customers’ demands, the products and services’ features and so on. In other words, knowledge management assumes the position of pivotal component of the decision making process. At a general level, this role is played through five consecutive and cyclic stages, as follows: (1) identification of knowledge; (2) creation of knowledge; (3) codification of knowledge; (4) storage of knowledge and (5) diffusion and use of knowledge (Harron).
A final perspective in assessing the processes of knowledge management is that of the impediments which are created. In the general understanding, globalization is understood as a promoter of knowledge management, but it should also be recognized that it does create some challenges as well. Globalization for instance creates a new work place, a more dynamic and more demanding working environment. The people, who possess the intellectual capital and who need to be managed, are culturally diverse and as such driven by different needs and features. Another challenge is given by the internationally expanding technologies or by the new managerial practices and concepts, which also expand globe wide (Buono and Poulfelt, 2005).