Knowledge Management for an Enterprise’s Success

Subject: Management
Pages: 11
Words: 2519
Reading time:
10 min
Study level: PhD


The effective use of personal knowledge and knowledge about a company is very vital in the success of an organization. Knowledge management is a concept that has been in existence for at least a decade. It has contributed to the success of many organizations.

Knowledge management is a concern for many organizations, especially those that employ the total quality approach in their day-to-day practices. Most organizations, which have not been using knowledge management previously, are in the process of adding knowledge management into their practices. Particularly, small business enterprises have overlooked the use of knowledge management for a long time. However, due to the important role that this concept plays in achieving business excellence, even small organizations are currently using this concept in their operations. This paper shall explore the concept of knowledge management and the role it plays in the excellence of a business.

Problem statement

Each business, large or small, aims at achieving excellence in its operations. One of the ways that a business can use to succeed in its operations is using the concept of knowledge management. Despite the numerous benefits linked to this practice, some small and medium enterprises still have some reservations about using knowledge management. This is because they view it as something that is done and should continue being done by large organizations. This is not the truth because knowledge management can be used by any organization that aims at excelling in its operations.

Purpose of the Research

The purpose of this research is to explore the role of knowledge management in business excellence. The research shall consider both small and large enterprises and the role played by knowledge management in these enterprises to bring about excellence in their business operations. It must be noted that knowledge management is a very important tool for both small and large organizations. There are numerous benefits that an organization gets if it is used effectively.


The information used in this research has been gathered from various secondary sources. The sources are specifically drawn from similar studies conducted on this topic. Some of these secondary sources include books, journals, and information that is available online.

Literature review

The concept of knowledge management

According to Wiig (1995), knowledge management deals with the utilization of knowledge in an organization through organizational learning and the use of sound practices of managing information. The core purpose of knowledge management is delivering value for an organization and ensuring the excellence of an organization.

The overarching principles in knowledge management are the utilization and exploitation of information in an organization (Wiig 1995). Moreover, there is a need to apply people’s competencies, skills, talents, and ideas when dealing with knowledge management. To understand the concept of knowledge management, there is a need to first understand what knowledge is and how it is transmitted from one source to another.

Knowledge management can be used to refer to a form of management that is expertise-centered and is aimed at utilizing human expertise to achieve excellence in business (Soliman 2011a). Knowledge management is not just a concept that deals with ensuring that people in an organization have a good knowledge base, but it is about the acquisition of knowledge that is able to impact the business positively (Taylor 1989). Good knowledge management practices have the ability to improve the competitive advantage of a business as well as its financial performance.

According to Boisot (1998), knowledge is viewed as one of the most important assets in any business. Knowledge management helps in differentiating between the way firms operated in the past and the way they carry out their operations currently. Before the concept of knowledge management can be fully and successfully implemented in any business, there is a need to understand the channels that are used during the flow of information in that organization as well as the learning processes of that particular organization (Soliman 2011b). These are very important because they form the knowledge base of an organization. Knowledge management has nothing to do with managing and organization of books or other literature or searching the internet for potential customers. Nevertheless, these things can be part of knowledge management practice in one way or the other.

The purpose of knowledge management

Lamberts and Shanks (1997) point out that the aim of knowledge management is to bring out the unexplored knowledge that people have, their ideas, talents, thoughts, and experiences rather than what is usually stated or seen explicitly. In business organizations that acknowledge the value of knowledge management, the responsibilities that employees are given are not just confined to their traditional job descriptions.

Instead, the staff is given responsibilities that will help them become more creative and innovative in order to create a competitive advantage for the business. Through being assigned different responsibilities, the staff is trained to be flexible, innovative, and creative. These characteristics are unique to each organization and are hard to be copied by others. This helps in deepening the sustainability of knowledge management which creates a competitive advantage for an organization.

Tacit and explicit knowledge

For one to fully understand the concept of knowledge management, it is first important to understand the difference between tacit and explicit knowledge. This will also help in understanding the difference between knowledge management and other commonly confused concepts such as information and data management. New knowledge always begins with an individual. The individual may have insights into something new, for instance, a researcher who invents something new.

Another example in the running of a business is that of a supervisor, who uses both his experience and his cognitive processes to develop something new that is introduced to the market. These are examples whereby tacit knowledge possessed by an individual becomes explicit in the process of managing a firm’s activities (Polanyi 1966).

Although the definitions of this concept vary, the basic principles do not change. It has to do with the practice of sharing forms of knowledge that are relevant to clients and customers in a business operation. According to Ruggles (1998), the ability to maintain this type of management can be very beneficial to a business. Various sources of knowledge management include personal expertise gained from practicing a certain business or profession for long, literature that can be found in published material or from the internet, and knowledge created by the company, among others. Knowledge management aims at capturing and using information from such sources and using the information for the success of the company.

Benefits of knowledge management

There are several benefits of knowledge management. For instance, there are benefits that are basic and are experienced immediately after a business starts using knowledge management tools. An example of such benefits includes handling information in a better manner compared to when knowledge management was not used (Newman & Conrad 1999). There is also a better understanding of how knowledge within a company can be used to increase profits and improve the overall performance of a business. The ability to find the needed information in an organization is also increased. This enables one to sort out this information in order to remain with only what is useful to the organization.

There are also intermediate benefits that are got when an organization uses knowledge management (Soliman 2011b). These are experienced as a result of employee efficiency and effectiveness in their way of doing things. Employees are able to share knowledge in an effective manner. Davenport and Prusak (1998) observe that there is effective sharing and handling of knowledge among the employees in an organization and also the efficiency of the employees in carrying out the assigned tasks is increased.

There are also organizational benefits that are received as a result of effective knowledge management. For instance, a company is able to meet its set goals. Moreover, there is overall growth in the company’s operations after the introduction of knowledge management.

Using knowledge management, people working in an organization are able to share knowledge faster and more easily as well as have access to the information they need without any struggle (Evans and Lindsay 2008). Since knowledge has been divided into various segments and all people in an organization are aware of the importance of information, they are able to know the useful information and where they can find it if it is needed. People in an organization are also able to understand their responsibilities as well as what is expected of other people. This helps in the avoidance of conflicts, which enhances the smooth running of an organization. This leads to improvement in the performance of an organization.

In an organization where there is an application of knowledge management, people are able to solve any problem that arises without delay. They are also able to approach the problem using new ideas because they are empowered concerning how to deal with such issues.

According to Firestone (2001), newly hired employees are able to work in an effective and efficient manner because they know where to get the information that they need. This helps in the reduction of the time that is usually wasted as new employees try to settle down and look for the information they need. Moreover, sharing information within the organization is encouraged. Therefore, employees within an organization benefit from what others already know without having to go through the whole process of reinventing something over and over again. Since employees are very effective in their operations, there is an improvement in an organization’s operations. Employees are comfortable and work under conditions that are favorable for increased productivity. This increases an organization’s productivity and helps to steer it to excellence.

At an organizational level, there is an improvement in the level of productivity and output. There is also increased innovation and creativity among the employees. This leads to the use of new and unique ideas in customer service and in other operations as well. It is also easy for the organization to achieve its set goals and objectives with such employees. Knowledge management is, therefore, an important tool in empowering employees to be more self-motivated and also to be empowered.

When there is a better understanding by the people in an organization concerning what they really need to know as well as their areas of deficiency in knowledge management, they are able to work together harmoniously. People are more empowered because of the sharing of knowledge that is present in an organization. Groups are also able to work harmoniously from a definite starting point towards a common goal.

Knowledge management in small and medium enterprises

A business enterprise that is struggling with the information processing cycle or one that has some problems with being productive can benefit greatly from knowledge management. If knowledge management is used well in such companies, it is possible to transform such a workplace into an efficient one characterized by success and excellence (Soliman 2010b).

Knowledge management is not a preserve of large organizations only. It can be used by any organization that would want to excel regardless of its size. For a long time, many small and medium enterprises have shied away from using this concept in their operations because of the misconception that it is only meant for large organizations. Despite this misconception, these organizations utilize the principles of knowledge management without even knowing that they are doing so unlike the case of large corporations, whose use of knowledge management is formalized. In small organizations, knowledge management has not been a priority for quite some time.

Although small enterprises may lack a lot of money to implement knowledge management practices, there are still other options available to them if they are willing to use this concept in their businesses. According to Fahey and Prusak (1998), small business enterprises that use knowledge management practices are better placed to become larger and more successful than one that overlooks the implementation of this concept in its operations.

For most large organizations, the implementation of knowledge management practices is a formal process (Movizzo 1995). This is because these organizations are aware of the immense benefits that are received by organizations that use this concept. Excellence in an organization is largely dependent on whether the organization is serious about using knowledge management in its operations or overlooks its use. According to Movizzo (1995), companies that have excelled in their operations have used knowledge management, even though they might not have been aware that they were using it since they never had a term for it.

However, it is clear to most companies that information is very vital in the success of a company. To business enterprises that are using knowledge management, it is one of the most valuable assets contributing to the excellence of the business (Doups3 2012). Using knowledge management in a proper manner brings about the difference between a successful and a failed business. It is also a vital tool in creating a distinction between a business enterprise that is stagnant and the one that is excelling in its operations.

Although small businesses are embracing the use of knowledge management practices in their operations, the process has not picked as fast as it has in large organizations (Oliver 2008). This could be attributed to limited resources in smaller business enterprises. For some, the process has been slow because they do not understand the importance of using knowledge management to help the business excel in its operations (Soliman and Youssef 2001).

Knowledge management software is one of the technological devices that can be used during knowledge management processes. Using knowledge management software can help an organization to avoid some of the common errors that are experienced as a result of analyzing one aspect of a business alone without taking into account other related aspects. When an organization or a business enterprise is using knowledge management software in its operations, it is easy for the business to make an accurate analysis of all the aspects in a business without making mistakes (Soliman 2010a). This enhances the growth of the business as well as excellence in all its operations. This is particularly useful for small businesses that aspire to excel in their operations.


Knowledge management is a very important asset in any business. Regardless of the size of the enterprise, knowledge management plays a very important role in steering a business towards excellence. Most of the companies that were previously afraid to use this concept in their operations have now realized its importance and are now using it formally. Even small enterprises, which previously thought that knowledge management was a preserve for large organizations, have started using this practice in their operations. Knowledge management plays an important role in the success of a business enterprise in several ways.

For instance, it ensures that there is an organized flow of information, it encourages people to share knowledge among themselves while working in an organization, it enhances teamwork resulting in the easier achievement of the set organizational goals and helping new employees adapt to the working environment faster hence increased productivity. Knowledge management is, therefore, a very important practice that should be embraced by all organizations.

Reference List

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