Importance Of Knowledge Creation In Learning Organizations Business Essay

Modified: 1st Jan 2015
Wordcount: 1257 words

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In the present age, knowledge is playing increasingly important role in both public and private organizations. However, there are many organizations did not realize the importance of knowledge. This value asset can contribute most of learning organizations in achieving their business aims and goals. To compete effectively in this twenty first century, organizations need to be aware on the environment changes within the organization and they needs to be the one that creates information and knowledge. In order to achieve this, both top management and support staff must be active key players in creating knowledge. Creating knowledge is not merely matter of learning from others or obtaining knowledge from outside but knowledge must be built on its own through communication and interaction among people in the organization. In fact, it is only limited by mental and environmental constraints. Moreover, knowledge creation is part of knowledge management that is seen as heart to the successful of organizations where KM tasks involved in capturing the creativity, sharing and utilization of knowledge as well as professional that provides with competitive edge. This article is critically emphasizes on knowledge management concept that covers on knowledge creation in regard to organizational adaption, survival and competence.

Keywords: knowledge, knowledge management, knowledge creation, learning organization, competitive edge, tacit and explicit knowledge


Knowledge is now seems to be the significant to organization success where organization able to secure its competitive advantage and competent to achieve sustainable superior performance. As pointed out in Migliarese and Verteramo (2005) article by referring to various authors, many authors agreed that this competitive advantage relies on the ability to create new knowledge, to spread it throughout the organization and also to express that knowledge in products, services and systems (Alvesson 1995, Drucker 1988 and Takeuchi 1995, Prusak 1997).

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Knowledge creation also should be important part in any business strategy as this has agreed by many executives (Migliarese and Verteramo 2005). While organizational capability to create knowledge is the most important source of organization to sustain its competitive advantage (Junnakar, 1997; Nonaka et al., 2000; Parent et al., 2000). Tacit knowledge is important in creating knowledge in organization where in a strict sense; this knowledge is created only by individuals. While organizational knowledge creation, therefore, need to be understood as a process that organizationally increases by individuals and develops it as a part of the knowledge network of the organization (Nonaka and Takeuchi, 1995). [1] 

Knowledge Management Concept

There are numerous of knowledge management concept has been defined by various researchers and practitioners and there is no limitation to defined it. The concept of knowledge management in today’s globalization world has brought to widen aspect, where it applies based on the circumstances of certain place, time as well as space. According to Elias M. Awad and Hassan M. Ghaziri (2001) in their book of Knowledge Management, consider the knowledge management concept as a new interdisciplinary business model that has knowledge within the framework of an organization as its focus. Knowledge management is not only emphasizes on specific area of subject but it also covers all aspect of life comprising business, economic, psychology and information management. They also stated that knowledge management is the process of capturing and making use of organization’s collective expertise anywhere in business either in paper, in database (explicit knowledge) or in people’s head (tacit knowledge). Further, knowledge management is seen as a repository where the composed of facts and information that can be stored, retrieved and transferred in order to run the business organization effectively. Besides, knowledge management also is more than getting the right information to the right individual at the right time. It also assist people share and put information in action in line to achieve the goals of organizations.

According to Elias M. Awad and Hassan M. Ghaziri (2001) as taken from Malhotra (1999) stated that knowledge management provides to the serious issues of organizational adaption, survival an competence in the aspect of progressively discontinuous environmental. Basically, it represents organizational processes that seek synergistic combination of data and information processing capacity of information technology and the creative and innovative capacity of human beings. It shows here, knowledge management is really about the relationships between people, process and technology in overlapping parts (Figure 1). In order to manage knowledge, organization must first list its people, systems and decisions as well. Even though there are still have yet to agree the definition on knowledge management from researchers and practitioners, each definition of knowledge management should include the above three important elements as these elements enable the organization to position itself and has positive impact on business processes.



Figure 1: Overlapping human, organizational and technological factors of KM

Source: Awad, E.M. & Ghaziri, H. M. Knowledge Management. International ed. Upper Saddle River, New Jersey: Prentice Hall, 2004

Knowledge Creation

Sabel (1994) as cited by Diego Puga and Daniel Trefler (2002) pointed out that knowledge creation is about shifting products and processes in theoretically ways of unpredictable. While as Soo, Divenney and Midgley (1999) have stated that knowledge creation is broadly known to be strategically essential for both organizational learning and innovation. Basically knowledge creation is depends on the mobilization and conversion of tacit knowledge (Nonaka and Takeuchi 1995). This process of knowledge creation only can be done with the existence of people. In addition, Choi and Lee (2002) referred to the views of Bloodgood and Salibury, 2001; Bohn, 1994 said that, the continuous process that involves individuals and group of people within the organization and between organization share tacit and explicit knowledge is also known as knowledge creation.

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As written by Balestrin, Vargas and Fayard (2008) in their articles taken from Nonaka and Takeuchi (1995) knowledge creation is considered as a process of knowledge conversion. Knowledge conversion is the interaction between tacit and explicit knowledge in the innovative of human beings activities where they are not isolated entities but complimentary entities. Nonaka and Takeuchi (1995) have introduced a model of knowledge creation known as SECI model that involved socialization, externalization, combination and internalization. SECI process will be function effectively with the support of proper context (Balestrin, Vargas and Fayard 2008) that covers the aspect of time, space and relationship between people in the organization.

Two dimensions of knowledge creation

According to Daud et al. (2008), knowledge creation has two dimensions, which are epistemological and ontological. Epistemological dimension is


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