Competitive Knowledge Management

This report is written to the senior management of XYZ Limited in order to encourage the management to adopt Knowledge Management within the organization. The report outlines various benefits that are likely to accrue to XYZ Limited upon adoption of Knowledge Management, various costs associated with Knowledge Management as well as various initiatives that can be taken by the company leading to new competitive advantage.

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Definition of Knowledge Management

Knowledge Management refers to the process by which an organization captures, stores, distributes or disseminates, and uses information or insights and experiences within the organization in order to achieve intended goals and objectives. Knowledge management is usually used by organizations to improve the levels of performance and competitiveness in the industry. Frappaolo defines knowledge management as the process by which organizations identify, capture, store, and redistribute informational or knowledge-based assets. These informational or knowledge-based assets include organizational documents, information databases, organizational policies and procedures, as well as experiences of employees. According to Bahra, knowledge management involves two major activities, namely capturing and documentation of information and dissemination of knowledge within an organization.

Benefits of Knowledge Management for XYZ Limited

Knowledge management provides numerous benefits to organizations that adopt it as well as to various stakeholders or business partners that organizations interact with. First and foremost, application of knowledge management would help XYZ Limited in reducing costs of operations through provision of readily available informational, intellectual, or knowledge-based assets. Knowledge management would also allow for reuse of intellectual assets at XYZ Limited, hence help in reducing operating costs. According to Bahra (2008), knowledge management helps in reducing costs of operations through effective management of large volumes of data.

Secondly, knowledge management would help XYZ Limited in increasing the speed of response to various business transactions. According to Malhotra (2011) and Montano (2010), knowledge management usually allows for quick decision making, hence reducing costs and duration of making important decisions. This is because effective knowledge management usually facilitates retrieval, distribution, and sharing of information throughout an organization through the use of computer systems such as Management Information Systems and Content Management Systems, hence aiding decision making processes. Quick decision making would also increase competitiveness of XYZ Limited because the company would be able to easily identify and exploit new business opportunities.

Thirdly, knowledge management would also help XYZ Limited in minimizing various mistakes made by workers and the organization. As a result, costs of operations would be reduced. Minimizing mistakes would also lead to increased efficiency and productivity. Fourthly, through knowledge management, XYZ Limited would be able to identify and recognize various needs of organizational members such as shareholders, employees, customers, and suppliers. Knowledge management would also help the company know the industry needs. It would also facilitate the ability of XYZ Limited to provide high quality goods and services that effectively meet the needs of these organizational stakeholders. Knowing the needs of organizational members would also facilitate planning processes in the company, hence making it possible to achieve set goals and objectives.

Fifthly, effective knowledge management would also help XYZ Limited improve the quality of its goods and services as well as productivity and profitability. It would result in improved advantage over competitors. Frappaolo (2010) also affirms that effective knowledge management enables organizations to turn ideas into new products with ease, thus increasing productivity. Consequently, effective knowledge management would also provide XYZ Limited with greater potential for expansion, growth, and development. Knowledge management also acts as a drive for creativity and innovation, thus leading to increased competitive advantage. This is because effective knowledge management usually facilitates learning within an organization.

Costs Associated with Knowledge Management

Adoption of knowledge management is usually associated with various costs such as cost of collecting data, cost of acquiring information technology equipments, costs incurred for creation and maintenance of databases, cost of retrieving and mining data, and expenses incurred during training workers on how to use knowledge management systems effectively. It is important to note that some of these costs may be reduced by outsourcing certain activities to other firms.

Prioritized List of Initiatives

Below is a list of various initiatives that should be implemented by XYZ Limited in order to facilitate adoption of a knowledge management system that would lead to increased competitive advantage.

Acquisition of appropriate information technology;
Creation of awareness and a conducive corporate culture that would encourage acceptance and use of a knowledge management system within the organization;
Collection and documentation of appropriate data;
Creation of Content Management System;
Training of workers on usage of the knowledge management system.


I am convinced that careful application and effective use of knowledge within XYZ Limited will result in formation of better and sound decisions, formulation of appropriate strategies and policies, and production of high quality goods and services. It will greatly improve competiveness of XYZ Limited. In my view, knowledge management will assist XYZ Limited in solving various business problems by improving decision-making processes, increasing efficiency, creativity and innovativeness, as well as unleashing new ideas within the company. Moreover, knowledge management will also facilitate growth and development of XYZ Limited by speeding productivity and enhancing collaboration and teamwork within the company.

I hope that the senior management of XYZ Limited will adopt a new knowledge management system in order to enable the company reap the above-stated benefits.

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