Investing in Technology to Manage Organizational Knowledge

By Mostafa Sayyadi, CAHRI, AFAIM, CPMgr

One scholar that is well known in the Academy of Management, one of the largest leadership and management organizations in the world by the name of Senge highlights the importance of knowledge for organizations. Senge says that successful organizations enhance their competitiveness by managing knowledge. It is important for executives to consider the ownership of knowledge as a factor which is a significant contributor to the knowledge of organizations. Knowledge emerges in two additional forms, including the knowledge that is only accessible by one company (private knowledge) and the knowledge that is accessible to all companies (public knowledge). Contrary to private knowledge, public knowledge differs in that it is not unique for any organization. Public knowledge may be an asset and provide potential benefits when posted in social media and other means of communication. Public knowledge has been defined as industry best practices and is reflected in various concepts such as total quality management, six-sigma, and just-in-time inventory. The best approach to knowledge is for executives to know which knowledge is to remain private and which to go public with. The one thing that both executives and scholars agree upon is that information technology can be implemented by executives and others are risks that have to be factored into strategic decision-making.

Information technology can provide the required infrastructures to store and retrieve organizational knowledge. In this case, the executive understands how knowledge as facilitating organizational processes and activities uses information technology to organize existing information. Information technology plays a crucial role in retrieving, storing and applying organizational knowledge. Executives can focus on individuals as the major source of knowledge, and show how follower’s ties together so that they can affect the sharing, storage, transfer, and apply knowledge within organizations. Executives, therefore, see these connections, and the related shared knowledge and memory, as central to the effectiveness of knowledge management within companies.

Since executives are constantly dealing with the public—-especially if they are a publicly traded company, the private and public knowledge is something they pay a great deal of attention to. Of course, this is not new but worth mentioning. For example, a scholar by the name of Matusik, argues that knowledge in organizations can be categorized as either private or public knowledge and can be advantageous to executive decision-making. For example, private knowledge refers to a resource that is imitable, and therefore is regarded as firm-specific. The firms’ specific knowledge must be guarded and not shared with the competition. Any leak of such information may expose the organization and increase the operational risk. From a strategic management viewpoint, unique organizational strategies, processes, and practices are examples of this type of knowledge. Information technology improves knowledge storing, aiming at enhancing competitive advantage and achieving organizational goals. Information technology is an internal resource that develops and integrates organizational knowledge as the most strategic factor of competitiveness. Therefore, information technology can be also considered as a facilitator of the knowledge storing process through providing the essential infrastructures to store and retrieve organizational knowledge.

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In conclusion, this article can offer several implications for practice. First, this develops a new and dynamic concept of information technology within organizations. Importantly, the effectiveness of knowledge management implementation is positively associated with using information technology and setting up useful software and systems to enhance strategic decision-making. Executives can implement information technology through employing IT professionals and allocating more budgetary resources to share and utilize knowledge within organizations.

Senge, PM 1997 ‘Communities of leaders and learners’, Harvard Business Review, vol. 75, no. 5, pp. 30-32.
Matusik, SF 1998, ‘The Utilization of Contingent Work, Knowledge Creation, and Competitive Advantage’, The Academy of Management Review, vol. 23, no. 4, pp. 680-697.

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Mostafa Sayyadi, CAHRI, AFAIM, CPMgr, works with senior business leaders to effectively develop innovation in companies, and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to and Consulting Magazine and his work has been featured in these top-flight business publications.