Business Management with Knowledge Management as
the Core under Knowledge Economy
Wanling Feng, Jiasu Lei, Jinyu Wang
Tsinghua University, China
The author argues that knowledge innovation and
information technology is rapidly changing economic
pattern, business operation pattern and people’s life style,
which inevitably leads to emergence of management based
on knowledge economy. The management style of
enterprises is transforming from production operation
management in industrial society to the knowledge
management in the future. This paper elaborates on the goal
and function of knowledge management; the scope of
knowledge management; the development and construction
of knowledge management system; and the structure of
knowledge management, namely internal and external
knowledge management.
“knowledge management’’ is ”management with
knowledge as the core” , which is the management process
of various knowledge in business operation. The basis of
knowledge management is to regard knowledge as the most
essential resource of the enterprise, and accordingly look
upon the utilization of knowledge as the key approach of
improving competitiveness. The knowledge of an enterprise
can be grouped into the following categories: (1) the
knowledge that embodies in machine and equipment; (2)
the coded knowledge in books, specifications, reports, CD,
computer; (3) the knowledge in employee’smind.
Under knowledge economy, the production, acquisition,
utilization and diffusion of knowledge will become a main
thread that runs through the operation activities of an
enterprise. The essential objective of knowledge is to produce,
acquire, utilize and diffuse knowledge to the maximum extent.
It aims at providing the staff with an effective
knowledge-sharing platform, and to open a window for the
market to get an understanding of the enterprise and its
operation. In such doing, the enterprise can improve its
competitiveness and foster specific advantage, and promote
its own development in the process of supplying the market
with its products.
Accordingly, the major functions of knowledge
management including the following four aspects. Firstly,
define the strategy of knowledge management. The second
task of knowledge management is to establish and improve
its knowledge management system. Thirdly, develop and
protect intellectual property, materialize the value of the
company’s knowledge asset. Fourthly, evaluate the
company’s performance in producing, acquiring, propagating,
sharing, integrating and utilizing the knowledge. a company’s
knowledge management should cover the production,
acquisition, propagation, sharing and integration of
knowledge.
Nowadays, the companies in many developed countries
have carried out their knowledge management work which
includes the following aspects: First, establish ‘knowledge
manager system’. The main task of a knowledge manager is
to capitalize the company’s knowledge; understand the
company itself, its knowledge needs and the environment in
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which it exists; establish an environment favorable to the
study, accumulation and sharing of knowledge and
information so that every employee can benefit from this
sharing process and contribute to the knowledge database.
Second, a company’s knowledge management can be
divided into “internal knowledge management” and
“external knowledge management”.
The internal knowledge management mainly includes:
(1) fostering a culture of knowledge sharing in the
organization. The ‘knowledge sharing culture’ refers to a
kind of atmosphere or a ‘community of the demander and
provider of knowledge’ in which everyone is obliged to
share knowledge with others; (2) emphasizing human
resources development; (3) in some situations establishing
positions based on knowledge management; furnishing
those excellent performers in knowledge management with
senior managerial positions and economic incentives; (4)
mining and sharing the knowledge that an organization has
accumulated; ( 5 ) creating a micro environment to facilitate
internal knowledge sharing. The knowledge possessed by
individuals should be available for transfer, diffusion and
spreading. Knowledge demanders can search and identify
the knowledge that they are in need of ; ( 6 ) providing staff
with necessary training to enable them to share knowledge,
including interpersonal communication skills,
human-machine conversation skills and knowledge
searching skills; (7) developing and establishing a system
for internal knowledge sharing. Some companies establish
‘optimum practical knowledge database’ into which
successful strategies in solving problems and new methods
are stored so that the employees can share these knowledge.
The external knowledge management refers to the
management of: (1) R & D department, which acquires
knowledge from the customer to develop product that meets
customer’s real need. The Buick plant of the American
giant General Motor has developed a client service system
which allows the client to design his favorite car on the
terminals in the exhibition hall; (2) sales department, which
is in close contact with customers and provides effective
services. The main task of the outward knowledge
management of the marketing department is to change the
Lone-to-one’marketing strategy. The essence of this change
is to replace the pure sell-and-buy relationship between the
company and the clients with a partnership relationship; (3)
after sales services, which offers customer service
knowledge. Xerox America developed a ‘maintenance
service knowledge management system’ through
cooperation with Xerox France. This system can store and
update the service knowledge and at the same time record
the services needed by the customers. This makes the
transfer of service knowledge and customer information
much more effective. This helps reduce service cost,
improve service effects and efficiency.