The Knowledge Organisation

Few industries can match the IT sector for jargon. 'Knowledge economy', 'knowledge organisation' and 'knowledge management' are popular new terms. But what do these terms actually mean and are they relevant for conducting business today?

The Knowledge Economy

The theory is that the knowledge economy is an economy where success depends on knowledge rather than physical resources. It's about brains not brawn.

When we get down to nuts and bolts in a knowledge-based economy, wealth creation relies mainly on the generation, distribution, and exploitation of knowledge. The OECD definition of a knowledge economy refers to industries that have a knowledge-based output. This includes all high-technology industries, such as computing and telecoms, and also sectors with a highly skilled workforce, such as finance, education and publishing. In the OECD as a whole, knowledge-based industries accounted for over half of business output in advanced industrial economies in the mid-1990s.

The Knowledge Organisation

The knowledge organisation may be defined as 'an organisation that recognises the primary value of both explicit and tacit knowledge within its workforce, and implements strategies to enhance and leverage that knowledge'.

How are knowledge organisations different from what has come before? The one thing that knowledge organisations share is a focus on business agility. In the past, as companies grew, they departmentalised and specialised. But in the new economy, companies that have inflexible practices and structures respond too slowly and decline. Cases in point would be the decline of Kodak and the success of Apple. Can any modern company afford not to be a knowledge organisation? The bulk of the management literature says an emphatic "No!".

Knowledge Management

Knowledge management is one of the defining management strategies of the current era. It is embedded in the policy, strategy, and implementation processes of worldwide corporations, governments, and institutions. Doubling in size from 2001, the global Knowledge Management market is estimated at US$8.8 billion today. Likewise, the market for Knowledge Management business applications such as Customer Relationship Management is expected to grow to $148 billion by 2005.

But what exactly is knowledge management? The truth is there is no common definition of knowledge management. Consider this Gartner definition:

Knowledge Management promotes an integrated approach to identifying, capturing, retrieving, sharing, and evaluating an enterprise's information assets. These information assets may include databases, documents, policies, procedures, as well as the uncaptured tacit expertise and experience stored in individuals' heads.

The implication is that organisations contain or possess under-considered assets which may be strategically important. But clearly the management of information is nothing new. Much of today's Knowledge Management is simply systems analysis, human resource management, or organisation development, updated and re-labelled. The distinction lies in recognition of the difference between tacit and explicit knowledge. 'Explicit knowledge' is knowledge that is static, easy to duplicate, easy to broadcast, and is often synonymous with 'information'. 'Tacit knowledge' is knowledge gained from experience and is usually passed on face-to-face, rather than instilled by formal education and training.

Knowledge Management Processes and Technologies

So how do you implement Knowledge Management? The following interesting ideas have been put forward for enabling knowledge management:

  • View the organisation as a human community capable of providing diverse meanings to information outputs generated by the technological systems.
  • De-emphasise the adherence to the company view of 'how things are done here' and 'best practices'.
  • Invest in multiple and diverse interpretations to enable a constructive conflict mode of inquiry.
  • Encourage greater proactive involvement of human imagination and creativity to produce greater internal diversity.
  • Give more explicit recognition to tacit knowledge and related human aspects, such as ideals, values, or emotions.
  • Implement new, flexible technologies and systems that support and enable communities of practice based on shared concerns and interests.
  • Make the organisational information base accessible to organisation members who are close to the action while simultaneously ensuring that they have the skills and authority to execute decisive responses to changing conditions.

From this list it is clear that Knowledge Management is not an IT practice. However, IT and Knowledge Management do go hand-in-hand and IT certainly helps to implement specific parts of a Knowledge Management strategy. The aim is to use technologies that enable interaction and sharing of knowledge. An organisational intranet is one obvious IT application of Knowledge Management.


Knowledge Management is a practice that requires deep-rooted behavioural and strategic change. It requires top management involvement and is a fundamental shift in strategic perspective. Getting the right information to the right people at the right time is invaluable in any organisation – as long as you know what information you want in the first place.