As we move into the twenty-first century, the need for rapid access to relevant knowledge has never been greater. The business world is increasingly competitive, and the demand for innovative products and services is enormous. In this century of creativity and ideas, the most valuable resources available to any organisation are human skills, expertise, and relationships. Knowledge Management (KM) is about capitalising on these precious assets in a systematic fashion. Most organisations do not capitalise on the wealth of expertise in the form of knowledge scattered across their levels nor maximise the use of information and data, coupled with the potential of people's skills, competencies, ideas, intuition, commitment, and motivation. In today's economy, knowledge is people, money, leverage, learning, flexibility, power, and competitive advantage. Knowledge is more relevant to sustained business than capital, labour, or land. Nevertheless, it remains the most neglected asset and so KM has developed as the combination of business strategies, processes, tools, and techniques needed to address this void in organisations.

The change from Information Society to the knowledge era is rapid, powerful and real. It is accompanied and supported by an equally swift change from information processing to knowledge production and management. At the core of the change is the fundamental shift from information to knowledge as a strategic foundation of business management, decision making and judgment.

Knowledge is purposeful coordination of action. Achieving intended purpose is the sole proof or demonstration of knowledge. Its quality can be judged from the quality of the outcome (product) or even from the quality of the coordination (process).

Knowledge refers to the actual processing of inputs (data, information) involving coordination of action to achieve results, products or purposes. The rules, sequences and patterns of action coordination determine further types of knowledge with respect to internal or external validation of rules, procedures and outcomes.

Taxonomy of knowledge is outlined in Table 1. Its logical progression is from top to bottom, increasingly enfolding more and more context of a purpose.

There is an academic fashion to classify knowledge into categories, like tacit and explicit, without attempting to define knowledge. Knowledge by its very nature exists in both tacit and explicit forms. Polanyi (1967) is often cited when describing tacit knowledge. Polanyi proposed a concept of tacit knowledge based on three main theses: Firstly, true discovery cannot be accounted for by a set of articulated rules or algorithms; secondly, knowledge is public but is also to a large extent personal and socially constructed; and thirdly, all knowledge originates from tacit knowledge. Therefore, Polanyi argues that tacit knowledge is knowledge that is known but cannot be told. It is the kind of knowledge that cannot be articulated because it has become internalised in the unconscious mind.

Explicit knowledge, on the other hand, refers to knowledge that is transmittable in formal, systematic language and can be shared in the form of data, scientific formulae, specifications, manuals and so on (Nonaka, 1994).

The first job of a manager is to assemble and use the knowledge that already exists in his organisation. A major difficulty is that existing knowledge simply does not move to the people who should get it. For years observers and consultants to organisations have been struck by how much people know and have thought about the problems and needs of their organisations. But they have been equally impressed with the difficulties of getting this knowledge to flow from where it is to where it can be used.

Recognition of the organisation's dependence on knowledge is an essential managerial attitude. In addition, however, managers should be asking a number of pragmatic questions about existing knowledge:

Worthwhile knowledge reduces uncertainty when a decision is made. Knowledge that does not reduce uncertainty is either redundant or irrelevant. Worthwhile knowledge may also have a different quality. It may clarify where uncertainty cannot be reduced. It is extremely important for the manager to know what things cannot be known. Also, the manager should know what knowledge is so costly that for decision purposes it must be treated as an unknown.

Acquiring and generating new knowledge, however, is one of the great uncharted areas of management and human behaviour. Indeed, if there is one place where we need new knowledge, it is in how to get new knowledge. Managers, for example, need to study how they themselves generate new knowledge. In addition, they should be supporting research on the process of how we obtain and discover new knowledge. Knowledge is new in two different senses, and it is important to distinguish these:

This distinction between “new only to me” and “new to all others including me” suggests different approaches to getting new knowledge. The first indicates a strategy of acquisition. Search of literature, meetings with others, and negotiation are ways to obtain knowledge that already exists for others but is new only to me. The second indicates a strategy of creation. Speculative thinking, imaginative leap, and original insight are needed to invent knowledge that is new to all including me. From a managerial point of view these are two very different processes.

It is assumed that management has the knowledge it needs and the problem has been to convert it to useful activity. But what if management does not have the knowledge it needs? Then, management's demand for knowledge to convert affects greatly the discovery of new knowledge.

There are two hypotheses about what leads to the discovery of new knowledge:

The serendipity hypothesis may have been acceptable when science was less advanced and there were few large organisations. But, in a complex knowledge society the demand hypothesis more accurately describes reality. This means that the manager's demand for knowledge principally determines the discovery of new knowledge. Thus the manager confronts an awing question- What new knowledge do we want?

The vast majority of KM literature builds on the assumption that knowledge is a resource amenable to management control (Scarbrough, 1999). In fact this represents probably the most fundamental assumption underpinning the viability of KM. Without this feasibility, the feasibility of KM becomes questionable. However, a number of writers suggest that some of the intrinsic characteristics of knowledge make it difficult to control and manage it in a direct and straightforward sense. These characteristics of knowledge include:

However, while knowledge may not be amenable to direct control, these critics typically acknowledge that when the term ‘management’ is used in a looser sense, organisational management does have some ability to shape and influence knowledge processes. For example, while Von Krogh et al. (2000) argue that knowledge cannot be directly managed, this is more a semantic critique of the term ‘management’ than a suggestion that all attempts by organisational management to shape knowledge processes are doomed to failure. Vo n Krogh et al., (2000) are in fact very positive that there is much that an organisational management can do to enable knowledge processes. Rather than the term ‘knowledge management’ they prefer the term ‘knowledge enablement’.

Simply recognising that knowledge is important and that there are antecedents that require its collection is not enough. There are several types of knowledge in the corporate environment as well as in any other organisation. Although humans garner knowledge about themselves as an individual's surroundings, they also exist in social networks and communities. Armed with the ability to share and to diffuse knowledge, human beings form organisations that benefit from such exchange and the build up of pools of knowledge (Frappaolo, 2006). A good part of the knowledge that individuals generate and store is shared with others in the community. This is the role that explicit knowledge seems to play in the ability of people to codify and diffuse what they know about their social and economic organisations (Frydman and Goldberg, 2007).

Codified knowledge is assembled and stored in organisations, providing a source of knowledge to organisational members. Geisler (2006) identifies three purposes for organisational knowledge: (i) useful (survival and growth) (ii) hedonistic (pleasure in gaining knowledge), and (iii) systemic (increasing the stock of knowledge for additional usages).

As knowledge is transferred from individuals to the organisational or institutional setting, there is a fusion of knowledge, as a cognitive phenomenon, knowledge resides in the individual, but management of the knowledge is truncated in the organisation. Once knowledge falls within the organisational framework, the members of the organisation need to manage such transactions and to ensure that they keep takingplace in an effective manner.

Professional specialising in Knowledge Management (KM) is constantly striving to determine what constitutes “knowledge”. The broad scope of knowledge translates into an equally broad definition of KM as an articulated philosophy that cuts across many disciplines. KM includes the active creation, transfer, and application and re-use of individual (tacit) knowledge and of codified (explicit) collective knowledge, supported by new approaches, relationships and technologies, to increase the speed of innovation, decision making and responsiveness to organisational objectives and priorities.

KM is a formal process that engages an organisation's people, processes, and technology in a solution that captures knowledge and delivers it to the right people at the right time (Duffy, 2001).

Knowledge Management can be defined as the task of developing and exploiting both tangible and intangible knowledge resources of an organisation. Tangible assets include information and experience based knowledge about customers, suppliers, products, competitors and so on. Intangible assets include the competencies and knowledge resources of people within the organisation. In brief, KM refers to the totality of organisational strategies aimed at creating a smart organisation, which is able to derive maximum benefit from its tangible and intangible assets, to learn from past experiences, whether successful or unsuccessful, and to create new knowledge.

In the last quarter of the twentieth century the character of work changed enormously. The dominant perspective on the analysis of these changes suggests that they have increased the knowledge intensity of work through creating a greater need for intellectual skills, and the manipulation of abstract symbols. Thus, these changes are argued to have produced an enormous expansion in the number of knowledge workers and knowledge-intensive firms. Such analyses typically utilise the post industrial/knowledge society rhetoric and argue that not only have the number of knowledge workers increased, and the knowledge intensity of work gone up, but also that knowledge is now the most significant source of competitive advantage, and the abstract and theoretical knowledge has taken on a heightened level of importance.

Fundamentally, the mainstream perspective conceptualises knowledge workers as constituting an elite and quite distinctive element of the workforce in contemporary economics, who are required to be highly creative and make existing use of knowledge in their day-to-day work. Rifkin's (2000) defines knowledge workers as the, ‘creators, manipulators and purveyors of the stream of information that makes up the postindustrial, post-service, global economy.’

Many organisations, including the public sector, recognise that they need to harness the knowledge of all their workers, not just the highly skilled, innovative and creative worker, to compete effectively and to respond to the changing culture due to the impacts of new technologies. It is the function of the KM worker to ensure that the knowledge assets of such highly valued employees is also put to the most effective use in pursuit of corporate objectives while the worker is with the organisation.

Helmstadter (2003) defines knowledge sharing in terms of “voluntary interactions between human actors through a framework of shared institutions, including law, ethical norms, behavioural regularities, customs and so on…..the subject matter of the interactions between the participating actors is knowledge. Such an interaction itself may be called sharing of knowledge.”His definition of knowledge sharing highlights the role of social interactions which lends support to the theory of social capital where participation in groups and the deliberate construction of sociability is a pre-requisite for the purpose of creating a resource, in this case knowledge.

However, Helmstadter's definition of “voluntary interactions” is not unproblematic as it fails to consider issues of politics and power in such interactions. While knowledge sharing, particularly in the context of economic organisations, is often encouraged through incentive systems (Bartol and Srivastava, 2002), the corollary also holds when involuntary interactions in the sharing of knowledge are often enforced by appraisals and incentive systems whereby employers who do not share their knowledge may be penalised and risk retarding their career advancement in the organisation. Studies on knowledge sharing have thus far been “heavy on notion of negotiation and trust between members of the network and exceptionally light on domination and power-relations-independent relationships based on reciprocity and mutual trust, where self interest is sacrificed for the communal good” (Knights et al., 1993).

The importance of the knowledge-sharing worker is identified in the TFPL (1999) study in UK. Concluding that no single department or function can deliver corporate objectives alone, the TFPL study isolates six characteristics that determine how the overall corporate knowledge management capability is created, shared and utilised:

KM is quickly gaining recognition as a key determinant of value in the marketplace, organisational success, and competitive edge. Today, organisations not only compete on the basis of product, service, and operational superiority, but also through the enhanced management of their corporate memory and intellectual assets. They are beginning to realise that their edge lies in how they manage the efficient flow and transfer of knowledge across the organisation.

Core business-driven knowledge processes in organisations include: (i) Locating and capturing knowledge; (ii) sharing knowledge; and (iii) creating new knowledge.

By locating and capturing innovative ideas and other types of strategic knowledge such as best practices used by technicians to solve maintenance problems, small entrepreneurs can improve innovativeness, service quality and response time. The documentation of yellow pages and data mining are useful KM tools for locating and capturing knowledge.

By sharing knowledge and experience about cost effective procedures and operational approaches, SME owners can achieve substantial savings. Tea gatherings, intranet systems and groupware platforms represent suitable technological enablers of knowledge sharing and collaboration.

Creating new knowledge, for example within small teams whose members share a mutual context of experience and collaborate on a joint task bonded by a common sense of purpose and the need to know what the other community members know, can lead to profitable product and service innovations.

Whether an organisation requires specific KM systems depend on their size and other issues which have to be systematised during a KM needs assessment exercise. By default many SMEs already have in place what experts call “facilitating structural requirements for successful KM implementation” such as a flexible and flat organisational structure. Real challenges for SMEs in the field of KM include delegation of decision-making authority, the creation of an open culture, the use of more sophisticated KM tools such as knowledge mapping techniques, benchmarking, scenario planning, IT based KM tools and so on. On the basis of a pro-active KM strategy embedded in a motivating culture (Von Krogh, 1998), many large organisations cannot be classified as intelligent organisations. Size matters but it is not the main issue. E-learning, for example, is a valuable option for both small and large firms. SMEs which want to go shopping for the right vendor or tool should consult business associations, IT promotion agencies, and others in order to contact vendors and consultants who have successfully implemented KM systems in small firms.

The particular implementation needs of a SME depend on the size, needs, market position, strategic outlook and resources/assets of the respective firm. Potential strategic business objectives of KM include risk management, improvement of operational efficiency and innovativeness, customer driven learning through fully integrated customer feedback systems and so on. (Von Krogh et al., 2000).

Enterprises which put emphasis on risk management and uncertainty reduction, often integrate KM into scenario planning activities aimed at assessing the impact of external factors such as changing government policies and regulations on the particular business. SWOT analyses are suitable means to generate knowledge about competitors’ behaviour, possible reactions and counter strategies.

Most organisations are eager to improve operational efficiency. KM can be a great help here by initiating activities aimed at sharing knowledge about intra-organisational best practices (for example, in the field of sales and marketing or technical support), for example, through institutionalised best practice forums, share fairs and so on.

One of the objectives of the KM is to maximise return on an organisation's tangible and intangible knowledge assts and resources such as customer-related information or the tacit knowledge, competencies and experiences resident in the minds of employees. KM aims at creating a “smart” organisation, which is able to learn from experience-based knowledge and to transfer into new knowledge in the form of product and/or service innovations. One example is the setup and use of computerised files to record and keep track of customers’ preferences, as well as inquiries, and so on aimed at improving customer relationships. Many SME managers, however, are not familiar with the conceptual basis and potential benefit of KM models, the latest KM software tools and so forth. To develop people's capacity to learn as well as the collective intelligence of an organisation requires KM competencies, visionary leadership, a “high organisational care culture” (Von Krogh, 1998) so that they are willing to share ideas, information, knowledge and space (Schrage, 1997) and, last but not the least, an efficient and suitable communication and information infrastructure.

SMEs do make use of various KM tools outlined in Table 2, in their day-to-day business such as maintaining databanks, having discussions with customers, conducting market inventories and so forth. However, the development of a truly visionary KM strategy and creation of a business-driven, IT-based knowledge information system is often neglected.

SMEs seldom have a systematic KM policy on the strategic level with regard to the monitoring and evaluation of available, “nice to have” and “must have knowledge” or the development, acquisition, organisation, sharing, utilisation and/or creation of knowledge.

SME managers do not always create facilitate structures for simple KM activities such as capturing existing knowledge or more complex ones such as continuous creation of new knowledge. Very often cultural barriers such as distrust, lack of recognition and communication, “knowledge is power” mindsets, retrenchment concerns and so forth act as demotivators with regard to effective knowledge sharing and utilisation of “what we know”.

Knowledge has been regarded as a discrete entity which is something we possess and can make explicit. It is evident that knowledge is rapidly becoming the organisations primary instrument of progress and competition. Existing knowledge defines our productivity and competitive skill in the present; new knowledge determines our productivity and competitive skill in the future. The importance of knowledge workers and knowledge-intensive firms is closely tied to the rhetoric regarding the contemporary rise and emergence of knowledge society. As economies and businesses shift towards a new world configuring of digital information and knowledge-based work, organisations need to take the challenge as to how Knowledge Management can assist them. The emergence of KM as a workable philosophy is the result of the increasingly sophisticated information and communication technologies now at the disposal of the organisation. This has led, in turn, to the identification of specific roles and responsibilities to various categories of KM managers within an organisation.

References