Knowledge Management & Innovation Theory

2226 Words5 Pages

Knowledge Management and Innovation Theory

Introduction

Arguably, world economy in the recent post-industrial times can be said to be an information-intensive atmosphere. A good number of scholars assert that, competition both in global and local market, distinction of the market place, as well as profitability is influenced by efficient knowledge. There are numerous definitions that have been put forward to explain the term ‘knowledge’, depending on the area in which it is applied. In this particular context or rather in the business context, the term ‘knowledge’ is used to refer to the state of being aware and able to understand specifics, truth, or information that is achieved through learning or experience.

Admittedly, to an organization or rather an enterprise, knowledge is considered as being an asset. However, unlike material assets this type of asset appreciates with time rather than depreciating, (Amrit 2002). It is evident that thoughts lead to new thoughts, and when knowledge is shared the receiver is augmented while the giver stays with it. Notably, creation of knowledge by organizations is considered to be promoting competitive advantage for firms that operate in the modern world marketplace. This is the reason why most firms concentrate most in sharpening their expertise of creating knowledge in different fields. According to the modern organizational theory, organizations are seen as systems that “process” information as well as, “solve” predicaments, (Nonaka & Takeuchi 1995). It is assumed that the elementary task for an organization is the way it handles information and decisions in a tentative shifting atmosphere.

It is argued that enthusiastically handles a shifting environment usually creates information a...

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