Importance of knowledge

Importance of knowledge
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Importance of knowledge results from its influence of the company effectiveness and financial results. Knowledge is a very important strategic resource in business. The business environment is constantly changing. New trends and technologies are emerging. Companies are implementing new ventures, so competition is increasing. That is why companies should adapt to changes and introduce new strategic solutions. All businesses have access to an extensive pool of knowledge, but the most important is the way the company uses this knowledge. Knowledge in every area of economic processes is important because:

  • it enables performing complex processes,
  • knowledge gives power to resolve problems and challenges,
  • knowledge gives authority to persons who posses it,
  • knowledge is power to create and innovate in new areas of business,
  • knowledge enables progress and development,
  • knowledge is result of efficient learning and training on the workplace,
  • tacit knowledge recorded in knowledge bases is key success factor for the company,
  • knowledge spurs critical thinking,
  • knowledge is present in organizational processes and organizational design.

Models of knowledge[edit]

Over the years many models of knowledge management were created. They show the big impact of collecting and using knowledge in the enterprise. Of these, we distinguish the most poular:

Resource model- At the end of the 1990s, Dorothy Leonard created the "resource model" of knowledge management. This model treats knowledge as the most important resource of the company. According to this model the source of knowledge can be the enterprise or environment. The condition for effective knowledge management is the interaction of 5 elements(Leonard-Barton D., 1995):

  • importing knowledge from the environment,
  • integration of new tools and technologies,
  • experiments,
  • solving the common problems,
  • key skills, include: physical and technical systems, management systems, employees knowledge (Leonard-Barton D., 1995)

Japanese model - created by Ikujiro Nonaka and Hirotaka Takeuchi. They related success of Japanese companies to their ability to create new knowledge, which can be used to produce new products and technologies. According to them there are 2 types of knowledge:

  • explicit knowledge
  • tacit knowledge(Nonaka & Takeuchi, 1995)

This information pointed out that: knowledge consists not only of information collected but also values, emotions and premonitions and leadership in the company plays a large role in creating knowledge. This points to the fact that knowledge in the enterprise has a huge role. It has an impact on the efficiency and results of the company. It is important in every area of economic process. Knowledge is important due to the development of the employee, the company and the entire market. Efficient use of knowledge allows:

  • use employees' knowledge in order to achieve optimal results,
  • creation new ventures and innovation,
  • creation expert systems,
  • development of intellectual capital and competences of all members,
  • acquiring knowledge from the market environment and using it to improve quality,
  • improve productivity,
  • encourage cooperation and increase employee involvement,
  • etc.


Author: Ewa Wójcik