How 'In the current environment knowledge and its effective management Essay

How 'In the current environment knowledge and its effective management are central to gaining competitive advantage' Discuss - Essay Example gement; for example, as Miller and Shamsie (1996) have shown in the case of the film industry, it is knowledge based resources in the form of production and financial knowledge which have boosted financial performance in an unpredictable global environment. The availability of specialized as possessed by a Company can help it to not only attain and sustain a competitive edge in the marketplace. According to Nonaka (1998), the uncertainty in the global environment means that the only aspect that is guaranteed to always provide a competitive advantage to a firm is knowledge; hence knowledge management through outsourcing is an organizational tool to achieve innovation and competitiveness. According to Quinn et al (1996), managing professional intellect is the key to value creation and profitability for most companies, especially within the framework of technology, which has created new rules and opportunities for organizational design. The traditional approach to knowledge is that it may be used freely by everyone without limitations. According to von Krohg et al (1994), knowledge is that which enables an individual to interpret and give meaning to the information he receives. However, they also argue that knowledge is subjective and is therefore linked to the group of individuals who are generating it. Therefore such information may be confined to a particular area or Company because of the inherent complexity of the information or because individuals are unwilling to codify the knowledge and present it in a format that can be shared with others. Nonaka and Takeuchi (1995:6) describe codified knowledge as something that is formal and systematic, which may be expressed in a number or words form and may be easily communicated because it is in the form of information – for example hard data or scientific formulae. Therefore, such information can easily be communicated to others. However, there may be certain kinds of knowledge which cannot be easily communicated,