Research Handbooks in Business and Management series
Edited by Adrian Wilkinson, Keith Townsend and Gabriele Suder
Chapter 12: Organisational knowledge and knowledge management
For several decades now, it has been accepted that the nature of work has profoundly changed; as Drucker (1959, p. 120) stated, ‘work is based on the mind rather than the hand’. Along with this change in work, the economy and society as a whole have also been transformed by the recognition that knowledge resources are the key drivers of organizational performance and competitive advantage; the inevitable corollary of the above is an imperative for a new way of doing business and managing organisations (Bell, 1973; Spender, 1993; Drucker, 1993; Leonard-Barton, 1995; Nonaka, 1991; Davenport and Prusak, 1998). Drucker, the visionary management guru, asserted that knowledge lies at the centre of this global economic and social transformation where the traditional factors of production – land, labour and capital – become ‘restraints rather than driving forces’. ‘Knowledge turns out to be the one critical factor of production’, he claimed, insisting on two embodiments of knowledge: productivity, when knowledge is applied to what already exists; and innovation, when it is applied to what is new (Drucker, 1993; Schwartz, 1993). He predicted a new organisational landscape that would reshape the concepts and practices of management because making knowledge productive is a management responsibility. It is certain that organisations must manage their knowledge, as an essential agent of differentiation to boost productivity, competitive advantage and innovation.
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