Introduction

The chapter is drawn from a paper entitled, Outcomes of Knowledge Management Initiaitves, which has been accepted for publication in the International Journal of Knowledge Management 2005; 1(2): 50 67.

Recent advances in information and communication technologies have made it easy to store and transfer knowledge. Globalization, increasing international competition and a free market philosophy are driving forces for these advances in technology. Many organizations have realized that creation, transfer, and management of knowledge are critical for success today.

In the current economy, knowledge has become a key success factor. In a traditional economy, the factors of production have diminishing returns, whereas explicit knowledge is subject to increasing returns (Grant, 2000). Through knowledge management (KM) practices, implicit knowledge, which can be transformed into explicit knowledge, should also produce increasing returns.

Many products include intelligent information to enhance product or service quality to meet customer needs better. From microwaves to cars, and from telephones to personal computers, these smart machines continue to deliver better service. Technology and information are associated with most of our routine activities. In organizations, information and technologies are better used than ever before to produce smart machines and services that are more efficient. Walters and Macrae (2003) sum it up by stating that organizations now operate in the knowledge economy and knowledge is the ultimate competitive advantage (Figure 11-1).

Figure 11-1: Competitive environment.

The global capital market is rapidly changing the political, regulatory, and economic barriers that have prevented creation and...