The best way to achieve competence in global market is through planning and upgrading core competencies. Not only will the knowledge economy change the experience of workers, but organizations and countries must also rethink their economic strategies. How well an indivi More
The best way to achieve competence in global market is through planning and upgrading core competencies. Not only will the knowledge economy change the experience of workers, but organizations and countries must also rethink their economic strategies. How well an individual, an organization, an industry, a country does in acquiring and applying knowledge will become the key competitive factor.
An organization with a good sense of KM has the potential to create significant value, but only if it is linked to its overall strategy and strategic decisions. Knowledge management (KM) is the latest strategy in increasing organizational competitiveness. The concept of treating organizational knowledge as a valuable strategic asset has recently become extremely common. KM efforts have been primarily focused on developing new applications of information technology, complemented to a lesser degree with implementing new organizational forms. The link between knowledge and business strategy has basically been overlooked. Thus KM has unfortunately developed into a matter of information technology primarily, followed by one of organizational behavior with business strategy generally not even considered.
The purpose of present paper is to identify the relationship between KM and the firm's competitive advantage. In the first section the pertinent literature related to knowledge management and its impact on the competitive advantage of the firm was examined. Then the Porter's (1979) five forces model and Wernerfelt's (1984) Resource-based view of the firm were reviewed. In the next section the link between KM and strategy formulation by drawing on the resource-based view of the firm is addressed. In the last section the strategic reference points (SRPs) theory has been introduced and applied for classifying the KM strategies.
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