Empowering Knowledge in Organizations Assignment

Empowering Knowledge in Organizations - Assignment Example 192). That is why we cannot deny the fact that the process of spreading knowledge is facilitated by the development and diffusion of new information technologies. The growth of telecommunications and the multiplication of computers had accelerated the spread of information, giving more people access to more information sooner. That broader access undermines the centralized control of information that was a principal basis for centralized decision making. In the end, as Cleveland (1985) noted, "More and more work gets done by horizontal process-or it doesn't get done. More and more decisions are made with wider and wider consultation-or they don't 'stick'" (p. 192). This is why a new aspect on how knowledge is harnessed was formed. The term knowledge management (KM) has been defined as doing what is needed to get the most out of knowledge resources. Although KM can be applied to individuals, it has recently attracted the attention of organizations. KM is viewed as an increasingly important discipline that promotes the creation, sharing, and leveraging of the organization's knowledge. Peter Drucker (1994), whom many consider as the father of KM, best defines the need for KM: Knowledge has become the key resource, for a nation's military strength as well as for its economic strength is fundamentally different from the traditional key resources of the economist-land, labor, and even capital we need systematic work on the quality of knowledge and the productivity of knowledge the performance capacity, if not the survival, of any organization in the knowledge society will come increasingly to depend on those two factors (pp. 66-69). Thus, it can be argued that the most vital in empowering the businesses today is the collective knowledge residing in the minds of an organization's employees, customers, and suppliers. Learning how to manage organizational knowledge has many benefits, some of which are readily apparent; others are not. These benefits may include leveraging core business competencies, accelerating innovation and time to market, improving cycle times and decision making, strengthening organizational commitment, and building sustainable competitive advantage (Davenport and Prusak, 1998). In short, they make the organization better suited to compete successfully in a much more demanding environment. This is why organizations are increasingly valued for their intellectual capital. An example of this fact is the widening gap between corporate balance sheets and investors' estimation of corporate worth. It is said that knowledge-intensive companies around the world are valued at three to eight times their financial capital. Consider, for example, Microsoft, the highest valued company in the world, with a market capitalization that was estimated at around $284 billion as of July 2003. Clearly, this figure represents more than Microsoft's net worth in buildings, computers, and other physical assets. Microsoft's valuation also represents an estimation of its intellectual assets. This includes structural capital in the form of copyrights, customer databases, and business process software. It also includes human capital in the fo