June 13, 2013

KM and company culture

Knowledge creation in firms cannot only rely on technology and technical knowledge, knowledge develops if the firm acts as a social community and specific skills of orienting communicating, translating and diffusing "how to know" are developed (Turvani, 2001). These skills, in the form of visions, cognitive models, and idiosyncratic interpretations of reality, are built up over time and they give a firm its own specific character and path of development. It should closely relate to company culture, with the environment and facilities for employees to learn and develop. Company culture differentiate companies from each other, each company have their own way to improve performance. Knowledge management has been widely considered as consisting of processes that facilitate the application and development of firm's knowledge assets.

Organizational competence also condition the way activities fit and reinforce one another, which in turn sustain the operational effectiveness. They are built internally through complex social and learning processes, organisational competencies are causally ambiguous, and consequently they are difficult to trade or imitate, scarce, valuable, and non-substitutable. These characteristics make them the source of sustainable competitive advantage, and thereby long-term profitability and improved performance in long run. In fact, organisational competencies, when leveraged into products and services, generate value and abnormal profitability and impact consequently the overall firm performance.

In fact knowledge asset management are seen as a set of intangible resource, assets and skills, which interact with each other through learning mechanisms. Knowledge management process enable the generation of new knowledge, and the development of organisational routines that form the building blocks of firm's competencies or the way it performs its operational processes and activities.

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