The use of tacit knowledge within innovative companies:knowledge management in innovative enterprises.

Article No-1

TITLE:  The use of tacit knowledge within innovative companies:knowledge management in innovative enterprises.

Summary: The purpose of this paper is to examine the use of tacit knowledge within innovative organizations. It addresses what organizations can do to promote knowledge sharing in order to improve successful innovation. Compared to available research material on explicit knowledge, the use of tacit knowledge within companies is relatively unexplored. The use of tacit knowledge is assessed with special emphasis on its significance and implications in the innovation process. Key levers for tacit knowledge management are identified and the positive impact of tacit knowledge on innovation success disclosed. Findings – The role of tacit knowledge in innovation management is analysed. Creation, availability and transfer of tacit knowledge within an organization are highlighted. Competitive advantage will be gained when companies value their tacit knowledge because explicit knowledge is knowledge we are already aware of and is public by its nature. Tacit knowledge can be the source of a huge range of opportunities and potentials that constitute discovery and creativity. Practical implications – As this paper focuses on the transfer of tacit knowledge, barriers to successful knowledge transfer are described and success factors are explored which help to secure and improve the transfer of tacit knowledge. It is proven that tacit knowledge has a crucial influence on the success of innovation processes in companies and plays a vital role as a company resource and success factor. In the fast changing business world of today, innovation has become the mainstay of every organization. The nature of global economic growth has been changed by the speed of innovation, which has been made possible by rapidly evolving technology, shorter product lifecycles and a higher rate of new product development. Organizations have to ensure that their business strategies are innovative to build and sustain competitive advantage. Innovation has, however, become increasingly complex due to changing customer needs, extensive competitive pressure and rapid technological change.Innovation is defined in many different ways in the literature.Innovation can broadly be described as the implementation of discoveries and interventions and the process by which new outcomes, whether products, systems or processes, come into being.They are usually classified as market-pull innovations.Many knowledge management definitions exist. For the purpose of this paper, only selected definitions will be focused on.The authors also describe knowledge management as an umbrella term for a variety of interlocking terms, such as knowledge creation, knowledge valuation and metrics, knowledge mapping and indexing, knowledge transport, storage and distribution and knowledge sharing., it can be said that knowledge management systems have a distinctive contribution in the development of sustainable competitive advantage through innovation.Knowledge management and innovation configuration determine how the firm can capitalize and create new knowledge, providing context wherin new product development efforts are designed, developed and completed. Innovation is a process that recombines existing knowledge in new ways.

Knowledge management can play a significant role in making explicit knowledge available for recombinations into new and innovative ideas. Knowledge management provides the tools, processes and platforms to ensure knowledge availability and accessibility, e.g. through structuring of the knowledge base. Knowledge management can also ensure that explicit knowledge, which can be used as input to the innovation process, is gathered internally and externally.Knowledge management provides a knowledge-driven culture within which innovations can be incubated. Knowledge sharing is enhanced by a culture where the role of knowledge, knowledge management, innovation and creative thinking is encouraged. Most knowledge management programs have a strong knowledge culture element through which an organizational culture of knowledge generation and sharing is emphasized. This benefits innovation programs as it provides knowledge as resource, but it also provides a culture within which innovation, creativity and learning through mistakes are encouraged and valued.

In conclusion, Knowledge management is not solely focused on innovation, but it creates an environment conducive for innovation to take place.Knowledge management and innovation configuration determine how the firm can capitalize and create new knowledge, providing context wherin new product development efforts are designed, developed and completed.knowledge management creates a culture within which the value of knowledge and application thereof is identified and communicated. Such a culture encourages knowledge based processes and programs, such as innovation.Knowledge management assists in steady growth of the knowledge base through gathering and capturing of explicit and tacit knowledge. It is clear that knowledge management plays a significant role in innovation.

Written By

Hosssain Farhad

Infrastructure University Kuala Lumpur

BBA in International Business