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¡¡¡¡1.Introduction
¡¡¡¡Knowledge can be tangible and explicit if it is planned,controlled, facilitated,as is standard with other assets or processes in an organisation.The management of knowledge adds strategic value.This paper focuses on the importance of knowledge management.
¡¡¡¡While there is no identical definition of knowledge management,a typical view is that knowledge management can be defined as the management of the information,knowledge and experience available to an organisation.It involves the creation,capture,storage,availability of knowledge in order that organisational activities build on what is already known and extend it further.Knowledge management activities commonly include the sharing of information and facilitating the exchange among employees in a company.
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¡¡¡¡2. Economic development with Knowledge Management
¡¡¡¡Many economists have addressed issues related to knowledge.For instance,Hayek(1945)observes¡±the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form, but solely as the dispersed bit of incomplete and frequently contradictory knowledge which all the separate individuals possess.¡±
¡¡¡¡In any economy,the aim is to maximise the advantage from a source of competition.If knowledge is a basis for the economy,then this economy has to be formed around maximising the use and the management of knowledge in businesses.
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¡¡¡¡3.Competitive Advantage and Knowledge Management
¡¡¡¡¡°Having knowledge can be regarded as even more important than possessing the other means of production?land,buildings,labour,and capital?because all the other sources are readily available in an advanced global society,while the right leading-edge knowledge is distinctly hard to obtain.¡±
¡¡¡¡Knowledge management has been a competitive advantage in business because it can bring more potential resources for a company.A company¡¯s success is dependent on adding value.This requires creativity based on the current knowledge position of the company.Maintaining what is already known in a company and renewing the knowledge continuously.This is a transparent approach to handle and update the knowledge.And with the great improvement of knowledge,a company,which has already moved from being labour intensive to process intensive, can carry out tasks most efficiently, effectively, economically and productively.
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¡¡¡¡4.Driving towards Knowledge Management
¡¡¡¡How to get people to share their knowledge or how to make employees produce larger profits through their knowledge?The easiest methods are through traditional rewards,such as pay,incentives,benefits,stocks,profits,and commissions or alternatively,through learning opportunities.
¡¡¡¡The primary reason for knowledge sharing is that customers are looking for value and companies have to provide value propositions.Even in some tranditional businesses,offering new value through innovative ideas and knowledge can catch more customers¡¯eyes.Such as IKEA,the furniture retailer,has a group of innovative people who design creative products for customers.
¡¡¡¡¡°The need for greater product and service innovation to keep pace with technological and societal advances and compete with the growing power of companies in China and other developing countries, rather than focusing on ways to improve efficiency and cut costs.Today¡¯s companies are rewiring for creativity.¡±Organisations are facing the need to change quickly and dramatically in order to survive.
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¡¡¡¡5.Conclusions
¡¡¡¡Knowledge management requires focus because of its relationship with economy. It is therefore a critical success factor contributed to organizational performance.And knowledge as ability,requires management.
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¡¡¡¡References:
¡¡¡¡[1]Kew,J,Stredwick J,Business Environment,2008.
¡¡¡¡[2]Kim,C,Mauborgne,R,Value Innovation,Business the ultimate resource,2008.
¡¡¡¡[3]Daft,R,Innovative Technology in the workplace,New Era of Management,2nd edition,2008.

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