Chapter 11 Summary: Managing Knowledge

Knowledge and the opportunity to obtain new information at lightening speeds is what drives our workforce, sets us apart from our competition, and propels us forward to continue growing and improving. The text states that information can be transformed into knowledge by a firm expending additional resources to discover patterns, rules, and contexts where knowledge works. However, wisdom is considered the application of knowledge to solve problems (Laudon 417). There are two types of knowledge; tacit knowledge is knowledge that has not been documented and most likely resides in a person’s head. The second type is explicit knowledge and this type has been documented. Knowledge is really broad and somewhat abstract in its definition. Knowledge can be stored in documents, e-mails, libraries, etc. It can exist in various business processes however it is not easily moved or universally applicable.

As previously stated, knowledge can give the competitive edge to one company over another because perhaps one company’s processes, production, and use of resources saves time, money, and supplies. While the other company will fail due to the lack of knowledge and will continue wasting time, money, and resources. At Chesapeake Energy, we engineered and pioneered horizontal drilling, which is a new technology that enabled our company to become the second leading company in the U.S. for drilling natural gas. This knowledge propelled us forward and gave us the upper hand. 

With all of the tacit and explicit knowledge within a firm, there needs to be some way to manage it. “Knowledge management refers to the set of business processes developed in an organization to create, store, transfer, and apply knowledge” (Laudon 419). As with any information system, we need to decide how we will acquire the data, store the data, and ultimately disseminate and apply the data. The same goes for knowledge management systems.

There are two types of knowledge management systems, the first being the enterprise-wide knowledge management system. These systems are more broad and collect information from all parts of the company. They typically include data searches and support other technologies such as search engines and e-mail. In my opinion, an example of an enterprise-wide knowledge management system could be a company intranet or internal training system. The second type of system is a knowledge work system (KWS). These types of knowledge systems are built for a specific purpose or an expert group such as engineers, scientists, etc. The experts are responsible for creating and discovering new knowledge for the firm and therefore need more complex and dedicated systems.

In conclusion, knowledge management systems are necessary to collect and disperse knowledge within a company. Knowledge is power.

Source: Laudon, Kenneth C. & Jane P. Laudon. Management Information Systems: Managing the Digital Firm 12^th ed. Pearson Hall, 2010.