Knowledge management essay

Human capital of the company is the sum of the collective knowledge of employees, their creativity, skills and ability to find solutions to problems, leadership, entrepreneurial and managerial skills, as well as mobility of workers, making it possible without increasing wage costs quickly and accurately perform assigned tasks. (Liebowitz 1999) The increase in human capital is possible through gaining knowledge by employees who can benefit the company, and through better use of their knowledge. In the organization and outside it there is a continuous process of knowledge transfer. Unlike tangible assets, which decrease to the extent of their use, intellectual assets, by contrast, only increase. Knowledge creates new knowledge, ideas  generate new ideas, and people can share their knowledge and gain other knowledge in return. It can be argued that knowledge can become obsolete over time, and then the intellectual assets are reduced. But there is an opportunity to update knowledge and to create a “metaknowledge”. This means that when updating a specific knowledge, it is possible to double it, and thus increase the intellectual assets of the organization. (Liebowitz 1999) 

Knowledge comes in many forms in the organization (in the process of recruitment, training, study of literature, the obtaining of licenses), develops during various working activities. Thus, in every organization, regardless of the scope of its activities and the degree of its interaction with the outside world, takes place the process of creation and development of knowledge.

Knowledge, which is used in organizations can be specific and general.  General knowledge, which have similar organization in the industry, include knowledge of production process and the basic industry technologies. To the general belongs also the knowledge shared by all organizations (universal economic principles, knowledge of fundamental laws, etc.). General knowledge is necessary for any business, but it’s hard to create a competitive advantage based on this knowledge. Special knowledge includes know-how, market research specific to the product, special corporate culture, specific management practices, original ways to motivate staff and other special knowledge. It is the most likely source of competitive advantage in the organization, because it forms the distinctive capabilities. (Teece 1998)