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Knowledge Management and Organizational Performance: Theoretical Study

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Submitted By ameen55
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Knowledge management and organizational performance: Theoretical Study

1. Introduction
Knowledge is an asset that needs to be effectively managed. Interest in knowledge management (KM) has grown dramatically in the recent years, as more researchers and practitioners have become aware of the knowledge potential to drive innovation and improve performance. For an organization to remain competitive, it must effectively practice the activities of creating, acquiring, documenting, transferring, and applying knowledge in solving problems and exploiting opportunities.
Many researchers argue what the organization comes to know explains its performance. The ultimate test of any business concept, such as KM, is whether it improves business performance. If organizations cannot use knowledge to improve performance, knowledge does not have measurable value. However, management research has often overlooked the role of knowledge and KM in the analysis of organizations and their performance. Most of KM research consists of either theoretical analyses of KM issues or case-based reviews of organizations’ KM practices. Consequently, KM research is short of offering an unambiguous understanding of the role of KM in improving organizational performance.
On the other hand, effective KM entails an understanding of the interrelationships that may exist among KM processes such as knowledge acquisition, knowledge creation, knowledge documentation, knowledge transfer, and knowledge application. These processes are not necessarily sequential but rather iterative and overlapping. Furthermore, an analysis for the purpose of understanding the relationship of the KM processes to organizational performance is incomplete if it does not also include the analysis of the interrelationships among the KM dimensions themselves. In other words, effective KM requires an understanding of the direct and

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