Impact Of Knowledge Management On Organizational Competitiveness

INTRODUCTION

1.1. Background of the study

The desire of every management of most organizations is to maximize profits and shareholders’ wealth. Sound knowledge management and strategic plans to have an edge over competitors in the industry is a demonstration of such desires. The future of strategic management largely lies on how best an organization can create and management knowledge and information (Drucker, 1993). In particular, from a strategic standpoint, and especially from the directive management perspective, it is collective tacit knowledge (Nonaka and Takeuchi, 1995) which contributes the greatest value to the organisation, given its inimitable, nontransferable and immutable character. This tacit knowledge, derived from learning and communications, can be transformed into explicit knowledge. This reference to directive management compels us to define more explicitly the essence of this function.

In ensuring organizational competitiveness which in turn leads to profitability, knowledge management has to be given due priority. Healthy competition is an essential competitiveness for growth and development of any firm or organization. Knowledge management is simply the process of capturing, developing, sharing, and effectively using organizational knowledge. It refers to a multi-disciplinary approach to achieving organizational objectives by making the best use of knowledge (Wikipedia) 

Knowledge management efforts have a long history, to include on-the-job discussions, formal apprenticeship, discussion forums, corporate libraries, professional training and mentoring programs. With increased use of computers in the second half of the 20th century, specific adaptations of technologies such as knowledge bases, expert systems, knowledge repositories, group decision support systems, intranets, and computer-supported cooperative work have been introduced to further enhance such efforts.

In 1999, the term personal knowledge management was introduced; it refers to the management of knowledge at the individual level for the profitability of a firm or organization. In the enterprise, early collections of case studies recognized the importance of knowledge management dimensions of strategy, process, and measurement. The operational origin of knowledge management originated from the consulting community and from there the principles of knowledge management were rather rapidly spread by the consulting organizations to other disciplines. 

Perhaps the most central thrust in knowledge management is to capture and make available, so it can be used by others in the organization, the information and knowledge that is in people’s heads as it were, and that has never been explicitly set down.

Many say that organizational management has little or nothing to do with the organizations favorably competing with their contemporaries. But whichever way we look at it, knowledge management should be essential in the realization of profitability in the Nigerian market.

Competences development is an essential element for organizational performance, in which organization members’ knowledge plays a direct and central role in acquisition and organizational competence development (Andreadis, 2009). The global business environments today are imposing new competitive pressures on companies, which in turn creates the necessity for competences and competitiveness. Different studies have indicated that companies that correctly leverage knowledge to extend competences tend to increase efficiencies in operations and process innovation, while also improving service to clients to satisfy demands that arise in the market (Desouza&Awazu, 2006; Thanurjan&Seneviratne, 2009), such that the extended organizational competence depends on the management capability of companies and the implementation of appropriate business strategies (Bismuth &Tojo, 2008; De Long & Fahey, 2000; Roth, 2003).

Although many approaches exist through which businesses can develop competences (through manufacturing, employees, technologies, clients, resources and processes), the challenges imposed by changes in the business environment require continuous development of organizational competences (Ingelgard, Roth, Shani, &Styhre, 2002; Kululanga, 2009), since competences constitute one of the pillars that enable companies to be competitive (Escobar, 2005; Murray &Donegan, 2003), and it is crucial for competitiveness and organizational growth and development (Bismuth &Tojo, 2008; Dutta, 2007). Also, knowledge management theory has indicated that knowledge transforms and moves within an organization and from an actionable knowledge value-added activities for the organization takes place (Ingelgard et al., 2002).