You are developing infrastructural facilities of your firm to aggravate your competitiveness. I can assure you that within a very short time it will just be a Point of Parity (POP).Because your competitors have a sharp eye on your development activities. You are adopting latest technology and happy to be a first mover. But this happiness will not last for a long time. Because, you know, same technology is available for your competitors and if they wish they also can adopt it and make your competitiveness weaker. So, is there anything that can really position your company in a stage where you can enjoy a sustainable competitiveness?
Have a look on your employee who is working in the desk with a PC. Carefully snoop on the gossip your employees are making. Think about the way you are communicating with your team members, the process you are applying to create value for your customers. Believe me, If managed well, all these things can ensure the sustainability of your competitiveness. Now ask me, Why I am so confident about that. I will tell you that when a number of people work together it creates a unique synergy. If this synergy is carefully dealt with a touch of spontaneity, it can really do something unique and this uniqueness spurs the innovation process that can provide you the sustainable competitiveness. Because within an organization all these bodies and processes have rare, inimitable and non-substitutable characteristics that are particularly tacit in nature. In a nutshell, we can term managing this issues as knowledge management.
In Nonaka et al.’s (2000) unified model of dynamic knowledge creation, knowledge is described as dynamic, since it is created in social interactions amongst individuals and organizations. Knowledge is context specific, as it depends on a particular time and space. Without being put into context, it is just information, not knowledge. Information becomes knowledge when it is interpreted by individuals and given a context and anchored in the beliefs and commitments of individuals (Nonaka et al., 2000). Also Davenport et al., (1998, p. 43) come up with similar definitions of knowledge. Knowledge which is new to an organization has to either be invented internally, or acquired from external sources.
There are two types of knowledge: explicit knowledge and tacit knowledge. Nonaka et al. (2000) and other authors such as Kikoski and Kikoski (2004) describe explicit knowledge as what can be embodied in a code or a language and as a consequence it can be verbalized and communicated, processed, transmitted and stored relatively easily. It is public and most widely known and the conventional form of knowledge which can be found in books, journals and mass media such as newspapers, television internet etc. It is the sort of knowledge we are aware of using and it can be shared in the form of data, scientific formula, manuals and such like. Patents are an ideal example of explicit knowledge in a business context.
In contrast, tacit knowledge is personal and hard to formalize – it is rooted in action, procedures, commitment, values and emotions etc. It is based on “we know more than we can express.” It is the knowledge of which we are not conscious. Tacit knowledge is not codified, it is not communicated in a ‘‘language’’, it is acquired by sharing experiences, by observation and imitation (Kikoski and Kikoski, 2004; Hall and Andriani, 2002).
Tacit and explicit knowledge are complementary, which means both types of knowledge are essential to knowledge creation. Explicit knowledge without tacit insight quickly loses its meaning. Knowledge is created through interactions between tacit and explicit knowledge and not from either tacit or explicit knowledge alone (Nonaka et al. 2000). Competitive advantage will only be gained if companies value their tacit knowledge, as explicit knowledge can be known by others as well. Tacit knowledge creates the learning curve for others to follow and provides competitive advantage for future successful companies (Kikoski and Kikoski, 2004).
So, to turn the knowledge into competitiveness an environment for facilitating different level of interaction like individual, intra-organizational and inter-organizational interaction is necessary. Now, you can ask me how actually knowledge evolved within an organization, how it really works. Knowledge is evolved by some uninterrupted processes. There are four modes of knowledge conversion process. Such as-
1. Socialization (from tacit knowledge to tacit knowledge);
2. Externalization (from tacit knowledge to explicit knowledge);
3. Combination (from explicit knowledge to explicit knowledge); and
4. Internalization (from explicit knowledge to tacit knowledge)
Customer can also be a source of knowledge. When the customer is exposed to your firm’s products or processes his behavioral signal can create a gap-filling knowledge. So, It needs time, it needs care for the stakeholders, It needs pro-active HR management, sharp eye on the communication process and above all the value creation process. Finding out gaps and filling the gaps in all level of management intuitively with responsibility is a sign of proper knowledge management what most of the Japanese companies like Toyota, Honda always have.
So if you facilitate the knowledge conversion processes within your organization and follow up time to time, you will be more deserving to achieve a sustainable competitive advantage.