It is becoming more prevalent now that an organisation’s intellectual capital is becoming the primary way in which an organisation measures its value. Today’s managers have genuinely recognized knowledge as an important organisational resource that should be manage just as they manage cash flow, raw materials and other resources. Knowledge Management refers to the efforts to systematically find, organize, and make available a company’s intellectual capital and to foster a culture of continuous learning and knowledge sharing so that a company’s activities build on what is already known.
Knowledge can be distinguished by two type’s explicit knowledge which is knowledge that can be codified, written down and contained in databases and tacit knowledge which is knowledge that is unstructured and resides in people’s heads. Information technology plays an important role by enabling the storage and dissemination of data and information across the organisation, but technology is only one part of the knowledge management system.
A complete knowledge management system includes not only the technology for capturing and storing knowledge for easy access, but also new management values that support risk-taking, learning and collaboration. Rather that seeing employees as factors of production and looking for ways to use human and material resources for greater efficiency, today’s most successful managers cherish people for their ability to think, create, share knowledge and build relationships.
Knowledge management builds upon the principles of information by trying to determine not just what has been formally published by the organisation, but to determine or develop an understanding of what the total organisation “knows”. That is, it tries to tap into the collective conscience of the organisation to develop an understanding of how individuals and groups have used, analysed and acted upon information to meet the corporate strategic goals.
An effective knowledge management system can be described as the Holy Grail of competitive advantage. Managing knowledge is now the issue for many twenty-first century businesses. A successful company is a knowledge-creating company: that is one, which is able to consistently produce new knowledge, to disseminate it throughout the company and to embody it into new products or services quickly. Angostura Ltd. is a perfect example of a company that manages an effective knowledge management system.
The company consistently capatilizes on research and development techniquies that sets them apart from their competitors. Taking into consideration their famous Angostura Bitters The “secret” was developed in 1824 by Dr. J. G. B. Siegert, a Surgeon General in Simon Bolivar’s army in Venezuela. He used his aromatic bitters to improve appetite and digestive well-being of the soldiers. This discovery soon became an idol to every kitchen, restaurant and bar.
Knowledge management is not a solution in itself, but rather it complements and enhances other organisational initiatives in total quality management and business process re-engineering, in order to make better use of the know how and expertise available within the company. Its main purpose is a two fold process it focuses to manage the knowledge assets of the organisation. Also to manage the procesess for creating, organising, transferring and sharing knowledge throughout the organisation.