Knowledge Management and Business Performance

This assignment requires you to delve into the crucial relationship between knowledge management and business performance. Your task is to examine relevant academic literature, identify key studies, and analyze their findings on how effective knowledge management practices contribute to improved organizational outcomes. Synthesize your understanding and provide insightful commentary on the impact of knowledge management on various aspects of business success.

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Management of Information Technology

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Organization 1 Application
In the opinion of Mao, et al., (2016), a proper criterion while appointing a new employee will
help the organization to gather useful information about the employees and this knowledge
will further help the organization in making efficient utilization of such employees. The
organization is using employee handbook for maintaining a proper record of the knowledge
of employees and internal audit for analyzing the performance of employees within the
organization. In this way, organization 1 is storing the knowledge about both the employee’s
i.e. new appointments and the existing employees. Obeidat, et al., (2017) identifies that the
objective behind the introduction of knowledge management is to make the performance of
the organization effective. He defines knowledge as explicit and tacit. Tacit knowledge is the
knowledge that can be in written form or that can be codified. Tacit knowledge can be stored.
On the other hand, the thinking of people is termed as explicit knowledge. It is impossible for
a company to store such knowledge. An organization can transfer tacit knowledge but the
transfer of data is not possible in case of explicit knowledge. Van Esch, et al., (2016) claimed
that knowledge management helps in the organization to achieve competitive advantage. An
organization cannot achieve competitive advantage by just acquiring the most valuable
resources. The organization should have the knowledge regarding the effective utilization of
such resources. Now, the world is not just dependent upon the natural resources, it is moving
towards the era of knowledge about increasing the skills and efficiency of the employees of
an organization. Organization 1 is focusing on internal audit to identify the areas in which the
employees are lacking. With the use of this information, the organization can help the
employees to improve the areas where they are lacking. This helps the employees to increase
their efficiency and this process ultimately increases the efficiency of the organization and in
this way the organization can gain competitive advantage. As per the opinion of Bir, J.S.
(2016), previously capital and both human and natural resources were considered as the basic

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resources for an organization but now knowledge is considered as basic resource. Martinez-
Conesa, et al., (2017) stated that an organization is required to use an IT software to integrate
and store the knowledge at one place so that that knowledge can be used to increase the
efficiency of the organization as well as reuse the stored knowledge in the future if needed.
According to Daghfous and Zoubi (2017), IT and knowledge management are inter-related to
each other. Technology is playing very important role in the operations of an organization.
The computer system eliminates the manual storage of information. IT helps the organization
to perform any task in very less time as compared to the time taken by employees to perform
the same task. In today’s world, IT has also increased the competition. Every organization is
using the technological software for the storage, maintenance and retrieval of data. IT helps
the company to sustain in the competition and hence, achieve competitive advantage. IT also
helps in data mining which means the information about the most and least efficient
employees can be separated using data mining feature of information technology. As per the
response of organization 1 IT reduces the human resource requirement of the organization
and hence reduces the cost to employees for the organization.
Organization 2 Application
Organization 2 is not relying on information technology for the management of knowledge
and as per the response of the organization; it does not think that such management of
knowledge can only be done through IT. Organization 2 is maintaining the knowledge by a
software named workday. But the organization is not using IT for storage, maintenance and
retrieval of knowledge. Organization 2 believes that knowledge management is not a
necessary component for the achievement of competitive advantage. In the opinion of Dong,
et al. (2017) it’s not necessary for the maintenance of knowledge management. The managers
can just observe their employees and determine the areas in which they are lacking. It is not
always necessary to store the knowledge about the employees. It is the responsibility of the

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managers to store such information in their mind and work on it. This is the objective behind
the appointment of managers. IT requires a huge investment also so if the same work can be
done manually then there is no need to spend huge amount on IT software. The knowledge
gathered by managers is more effective than the knowledge gathered by IT. The employees
work under the managers so managers are more aware about how the employees are
performing than the software installed. Serenko and Bontis (2017) explained that only
knowledge management is not important for competitive achievement. Competitive
advantage is not just gathering knowledge about the employees but the organization should
focus on making the most effective utilization of the employees. The information systems are
only used for gathering more and more information and it only stores tacit information,
explicit knowledge is left untouched. With the help of IT, an organization cannot get the
exact knowledge about each and every employee. IT takes into account a common issue
faced by the employees. Information system always takes all the employees together but
every employee has his or her own sense of working so the knowledge also differs from one
employee to another. IT software will work as per the commands given to the software. If any
changes in the environment take place then such software cannot consider such changes so
the result of software is sometimes not accurate.
Comparison
The operating style of organization 1 and organization 2 is completely different. Both the
organization is relying on knowledge management but in different ways. Organization 1 is
managing the knowledge with the help of specific interview criteria for new employees and
performing internal audit for existing employees and the organization is making an employee
handbook to store the knowledge. In case of organization 2, the organization is gathering the
knowledge with the help of workday. Workday is internal software used by organization 2
which contains all the information about the employees of the company. But as per the

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responses of organization 2, the organization does not think that management of such
knowledge results in the achievement of competitive advantage and at the same time the
organization 2 is not relying upon information technology for the management of employee
related knowledge (Dayan, et al., 2017). If we talk about the literature review of organization
1 then each, et al. believes that competitive advantage can be achieved with the help of such
knowledge as such knowledge helps in the improvement of the performance of employees
and if the employee’s performance is improved then it will also increase the performance at
organization level. But as per the literature analysis of organization 2, only knowledge
management cannot lead to competitive advantage. There are a number of factors which can
affect the sustainability of the company. But the competitive advantage cannot be achieved
without information technology. AS competitive advantage means the organization is
required to prove itself superior in terms of its competitors. In today’s world every
organization is making use of technology to make itself superior (Heisig, et al., 2016). If
organization 2 will not rely on information technology then in such case the company cannot
achieve competitive advantage. Organization 1 is relying on information technology for the
knowledge management but as per the literature analysis of organization 2, information
technology cannot gather the exact information about the performance of the employees. IT
takes into account the nature and structure of the organization and will identify the
performance on the basis of these factors but if the managers are physically performing the
internal audit then they will consider all the factors which are related to the performance of
the employees like social relations, working hours, emotional aspects of employees and many
more. After proper comparison between literature analysis of organization 1 and organization
2, it is analyzed that organization 2 will face the problem of competitive advantage in the
future because as per the response of organization 2, the organization cannot believe that
knowledge management helps in competitive advantage (Lopes, et al., 2017). But in real, the

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human resources i.e. the employees are directly linked with the sustainability of the
organization. Knowledge management helps the organization to properly analyze the
weaknesses of employees and help them to convert such weaknesses into strengths. If the
performance of employees improves then the organization will also improve. IT technology
is just a way to make this process easier. It will involve investment at the time of installation
of the software but this investment will return as increased performance at organizational
level. In recent years, the importance of knowledge management has increased because now
organization is focusing more on human resources as compared to natural resources. After the
literature analysis of both the organization, it is analyzed that both knowledge management
and IT are important for the organization and it results in achieving competitive advantage
(Lee, et al., 2016).

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References
Bir, J.S. (2016) Knowledge, Attitude and their Effect on the Recently Graduated Employees’
Financial Management Practices and Satisfaction, Economic Literature, 12, pp.69-81.
Daghfous, A. and Zoubi, T. (2017) An Auditing Framework for Knowledge-Enabled Supply
Chain Management: Implications for Sustainability, Sustainability, 9(5), pp.791.
Dayan, R., Dayan, R., Heisig, P., Heisig, P., Matos, F. and Matos, F. (2017) Knowledge
management as a factor for the formulation and implementation of organization strategy,
Journal of Knowledge Management, 21(2), pp.308-329.
Dong, Y., Bartol, K.M., Zhang, Z.X. and Li, C. (2017) Enhancing employee creativity via
individual skill development and team knowledge sharing: Influences of dual‐focused
transformational leadership, Journal of Organizational Behavior, 38(3), pp.439-458.
Heisig, P., Suraj, O.A., Kianto, A., Kemboi, C., Perez Arrau, G. and FathiEasa, N. (2016)
Knowledge management and business performance: global experts’ views on future research
needs, Journal of Knowledge Management, 20(6), pp.1169-1198.
Lee, V.H., Foo, A.T.L., Leong, L.Y. and Ooi, K.B. (2016) Can competitive advantage be
achieved through knowledge management? A case study on SMEs, Expert Systems with
Applications, 65, pp.136-151.
Lopes, C.M., Scavarda, A., Hofmeister, L.F., Thomé, A.M.T. and Vaccaro, G.L.R. (2017) An
analysis of the interplay between organizational sustainability, knowledge management, and
open innovation, Journal of Cleaner Production, 142, pp.476-488.
Mao, H., Liu, S., Zhang, J. and Deng, Z. (2016) Information technology resource, knowledge
management capability, and competitive advantage: the moderating role of resource
commitment, International Journal of Information Management, 36(6), pp.1062-1074.
Martinez-Conesa, I., Martinez-Conesa, I., Soto-Acosta, P., Soto-Acosta, P., Carayannis, E.G.
(2017) On the path towards open innovation: Assessing the role of knowledge management

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capability and environmental dynamism in SMEs, Journal of Knowledge Management, 21(3),
pp.553-570.
Obeidat, B.Y., Tarhini, A., Masa'deh, R.E. and Aqqad, N.O. (2017) The impact of intellectual
capital on innovation via the mediating role of knowledge management: a structural equation
modelling approach, International Journal of Knowledge Management Studies, 8(3-4),
pp.273-298.
Serenko, A. and Bontis, N. (2017) Global ranking of knowledge management and intellectual
capital academic journals: 2017 update, Journal of Knowledge Management, 21(3).
van Esch, E., Wei, L.Q. and Chiang, F.F. (2016) High-performance human resource practices
and firm performance: the mediating role of employees’ competencies and the moderating
role of climate for creativity, The International Journal of Human Resource Management,
pp.1-26.