Business Management

Success in today's global, interconnected economy springs from the fast and efficient exchange of information. Sustainable competitive advantage is no longer rooted in physical assets and financial capital, but in effective channeling of intellectual capital. The market value of a commercial enterprise is derived not only from its physical and financial assets, but also from the intangible assets it creates through knowledge-based activities.
These intangible assets include intellectual property, such as patents and copyrights, as well as the more nebulous assets such as methodologies, practices and customer relationships. These intangible assets are often estimated to be worth many times the book value of a firm and are known as knowledge or intellectual assets. The management of these assets is referred to as knowledge management. The major shift brought about by current perspectives on knowledge management is the shift in the value proposition between employer and employee. Yet, if knowledge is an asset, it has to be managed in the same way as financial and physical assets.
As companies grow, knowledge becomes more dispersed, and "islands of information" become more common. Research has shown that once an organization grows beyond about 200 or 300 employees, it loses grasp of its collective knowledge. Over time, a large quantum of knowledge resides with just a few people within the organization. Corporate knowledge management rests on an infrastructure of data repositories, groupware, and messaging software. If knowledge is omnipresent, then knowledge management is the discipline that helps put information in the right context and perspective. Preventing knowledge loss is a big factor in the knowledge management equation. Ideally, knowledge can be applied and reapplied— anywhere, any number of times—without reducing its usefulness.