Dispelling the myths on Knowledge Management

mba students at the global business school (gbs) recently had the opportunity to interact with one of the leading authorities on knowledge management and strategic management ron sanchez, professor of strategy and technology management at international institute for management development, lausanne, switzerland. sanchez, who has authored several books on knowledge management and strategic management, remarked, "knowledge management is an essential part of strategic management process. in the knowledge economy, organisations are no longer driven by their physical assets but by the value of their knowledge." suggesting that there is a confusion about what knowledge management exactly is, sanchez added, "people tend to use the terms data, information, and knowledge interchangeably, but the three concepts are quite distinct theoretically and in practice. until we get straight the essential differences between data, information, and knowledge, it is impossible to design or implement a real knowledge management system." he then explained, "data are simply observations, often including some form of measurement. information, however, is the meaning derived through the interpretation of data. essentially, information is the discovery or awareness of patterns in data. knowledge results when our interpretation of available information - ie, patterns in data - leads us to identify and believe in cause and effect relationships. these essential interpretive processes must be there to progress from data to information to knowledge." sanchez emphasised that it is like the nervous system of an organisation. he said, "it gives an organisation powerful tools for making sense out of data and information, and for disseminating and implementing new knowledge within an organisation. every activity that we perform today in most organisations is supported by it facility of some kind. in knowledge management activities, it is an essential enabling technology." sanchez, nevertheless, refuted the idea that knowledge management is all about it. asserting that knowledge management is a fundamental process of the knowledge economy, he remarked, "knowledge management comprises three main factors - designing learning cycles into all activities of an organisation; developing ways of systematic applying new knowledge in the activities of the organisation; and in the process finding ways to help convert the personal knowledge of individuals into organisational knowledge, and vice versa." sanchez has been developing a new perspective called 'competence-based strategic management'. the genesis of this new approach to strategic management lies in the notion of organisational 'core competence', introduced by indian american management guru c k prahalad and garry hamel in early 90s. sanchez's approach goes beyond and attempts to create a bridge between the internal capabilities of an organisation with its external competitive environment. in this approach, competence is a property of the organisation as a system. "competence is the ability of an organisation to sustain coordinated deployments of resources in ways that enable the organisation to achieve its goals," sanchez said. "to achieve true organisational competence requires principles for the design of organisations as flexible, adaptive, open systems."

Deepa Singh
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