THe need to manage knowledge in the organisation (original) (raw)

Although much has been written on knowledge management (KM), the learning organisation and intellectual capital (IC), little, if any has been written about the relationship and correlation between KM and intellectual capital management. The challenge seems to be to provide integrated guidelines on how organisations can use both KM and IC for the formulating of a comprehensive intellectual capital management approach (CICM). The exceptional growth of information in the knowledge economy focuses attention on the importance of managing knowledge in organisations. These organisations are referred to as the so-called learning organisations. These are organisations that recognise the value of knowledge within the organisations Although there is a general consensus that the knowledge society and the knowledge economy has arrived, and that knowledge is a key business asset, organisations are still in the early stages of understanding the implications of knowledge management and intellectual capital. The rise of the “new economy” that is principally driven by information and knowledge, can be attributed to the increased prominence of intellectual capital (IC) in organisations. Intellectual capital features prominently in recent economic, managerial, technological and sociological developments in a manner previously unknown and largely unforseen. Although there are many similarities between KM and intellectual capital (IC), these concepts are not the same. KM relates to the creation of value, the gathering of ideas, the measuring of employee brainpower, and the conversion of taught knowledge into explicit knowledge that the organisation can codify and transfer. IC relates to the maximization of value. This achieved through the licensing of knowhow, patents, trademarks, and the use of intellectual capital to gain a competitive advantage. Further uses are to enter new markets, establish strategic alliances, and generate revenue. The proponents of the KM and IC approaches identify the benefits of each of these management approaches, but fail to see the connection or the interaction between KM and IC. It is possible in some industries that one approach may seem more important than the other. Nonetheless, for any organisation to succeed in the knowledge economy, it is essential to adopt both KM and IC approaches to some extent, as each deals with complementary strategic needs. What some organisations fail to see is that KM and IC are essential components for the total management of an organisation’s intellectual asset management. The question can now be asked: What can be done to ensure a successful relationship and effective correlation between knowledge management and intellectual capital in the organisation? This question will be answered with this paper.