KNOWLEDGE MANAGEMENT

1. INTRODUCTION

Information is of great significance for effective and efficient management. Information has
an important place and role in realization of all functions in management: planning,
organizing, leading and controlling. As per the management thesaurus: “Information is an
interpreted datum having been processed in order to add or create some knowledge for a
person receiving it“. [5]

As per the management thesaurus, it is defined as follows: “Management is a special

scientific discipline, of a multidisciplinary type, which investigates managing problems in
certain works, undertakes and social systems. This discipline studies management as a
complex process with an array of subprocesses, and as a group of people managing
processes and systems; it also studies every individual managing problem and phenomenon
related to efficient execution of certain works and tasks.

Management is considered and defined as a process of managing certain works, undertakes

or systems for more efficient achievement of common goals. This is a rather complex
process which comprises a set of related subprocesses of planning, organizing, staffing,
leading and control.
Management may be considered as a special group of people whose job is to manage work
and task execution done by some other individuals, for more efficient achievement of
foreseen, common goals. Therefore, management is considered as a group of people
authorized to manage realization of certain jobs. [5]

Further in this paper, position, role and significance of information supporting realization of
quality management will be described.

2. DATA, INFORMATION, KNOWLEDGE

“Information is of great significance for effective and efficient management. This is because
the use of quality, or as per some authors – useful information, is one of the most important
assumptions for successful work of any manager. And this is the case not only in a process
of decision making, as reported most commonly in the literature, but in execution of any of
management functions.“ [6]

Information represents knowledge on phenomena, i.e. problems to be solved. 1. Data and

information are used day-to-day. It can be said that terms data and information are
interpreted as being the same, which creates confusion, and therefore this should be clarified
at first.

“Data represent models (verbal or non-verbal, quantitative or qualitative, concrete or

abstract) for indicating a certain phenomenon“. [6] One phenomenon can be indicated in
several ways, through different types of a model. In order to avoid mistakes when defining
data, standard terminology should be used.

“Basic attributes of data quality are the following:

- representativity – data have to be such to include information which truly show a
certain phenomenon,

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 - precision – data have to include all information which sufficiently shows
characteristics of a certain phenomenon in details,
- comprehensiveness – datum should be created in a form understandable for a user,
- actuality – data have to have performances which enable acquiring information being
useful for timely solving of a problem.“[6]
Information represents knowledge about a certain phenomenon (process, problem, etc.).
This knowledge is gained through intellectual data processing termed as interpretation of
data. It should be noted that quality of acquired information on some phenomenon may
depend on a method for interpretation of data. For many years, information and knowledge
have been discussions aimed to identifying the essence of knowledge, i.e. its definition.
Based on researches done by different specialties, various standpoints, concepts and
theories have been created. Modern theorists of management and practitioners, treat
information as knowledge. At the same, knowledge implies, as reported by Peter Drucker
“information effective in action, information focused on results“[2].

DATA AND INTELLECTUAL

IDEAS INFORMATION KNOWLEDGE CAPITAL

Figure 1 Interrelationship between data, information, knowledge and intellectual capital

Knowledge occupies the central place within the competence core. This is reasonable
because, as reported by Drucker, “knowledge is a real, essential resource which
consolidates and drives other resources“ (land, labor and capital). Knowledge occurs in two
basic modalities:
1. Explicit knowledge is clearly structured: “it has recognizable form and comprehensive
content“[6]. It can be easily documented, i.e. harmonized.
2. Tacit knowledge actually represents informal knowledge. “It is knowledge of
individuals, groups, organizations“ [1] Specificity of this knowledge is that it can be
neither easily explained (communicated) nor documented, i.e. arranged.
A modern organization should assign a particular role to knowledge resource. This further
means taking measures and activities which enable providing of all knowledge necessary for
effective and efficient management. In addition to this, knowledge available in organizations
should be a subject of continuous review from the aspect of its adequacy, i.e. actuality.
Modern organizations should tend to document available knowledge in an appropriate form
and within data bases as much as possible. This is necessary for future generations, as well
as for employees which would perform quality work in solving the future problems.

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 3. KNOWLEDGE MANAGEMENT

Only managing with quality knowledge may contribute to effective and efficient function of an
organization, i.e. corporation.
“Probst, Pauli and Binggeli created a model of knowledge management which deserves a
particular attention“[7]. This is a model which comprehensively and precisely implies steps,
i.e. activities which form a process of knowledge management. Figure 2 illustrates a process
of knowledge management.
Different knowledge management activities (steps) require relevant methods, techniques and
actions, and at the same time, their execution must be in a function of successful
performance of each relevant activity as a part of the whole knowledge management process
– both by individuals and groups and organizations as whole.

KNOWLEDGE KNOWLEDGE
AIMS ASSESSMENT

KNOWLEDGE KNOWLEDGE
IDENTIFICATION STORAGE

ACQUIRING KNOWLEDGE
KNOWLEDGE USE

KNOWLEDGE KNOWLEDGE
DISTRIBUTION DEVELOPMENT

Figure 2 Knowledge management process [6]

Managers are the greatest holders of knowledge management, because they are responsible
for all processes and results within organizations and corporations. In this context, Little's
standpoints are well known while he is talking about knowledge coordinators, knowledge
advocates and knowledge stewards“[6]. Effectivity and efficiency of knowledge management
manager depends on many factors, and the most significant are as follows:
1. Roles, exercising by managers in success knowledge management is quite an
important factor, both of individual and all people together. The arrangement of roles
in knowledge management must have such performances which are adapted to
needs of efficient knowledge management. Definition and roles in knowledge
management is a complex process which depends on many factors, and the most
important are the following:
- Type and size of an organization as a position and importance of a manager in
organization hierarchy,
- Delegation of roles in knowledge management must also respect relevant
demands having external character and their dynamics.

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 Only in this way, adequate assumptions for successful exercising roles of knowledge
management holders may be created, and accordingly, providing adequate
responses to challenges posed to organizations by their environment.

2. Capabilities they hold are not sufficient for successful knowledge management.
Holding capability for knowledge management is a very important condition for
successful execution of knowledge management process, as manager's task.

For successful creation, storage, distribution and application of knowledge, not only
technical, interhuman and conceptual knowledge, i.e. capability, is sufficient but
certain specific capabilities as well.

Vorberg and Fink think that holders of knowledge management must have the following
capabilities:
- for knowledge creation: ability to learn, ability of creative thinking and ability of
communicating;
- for knowledge storage: ability to structure knowledge and to systematize knowledge
storage;
- for distribution of knowledge: ability to understand value of knowledge, ability to work
in team and ability to use media for distribution of knowledge.[6]

Voren Benis promotes the idea that knowledge management assumes that relevant persons
hold:
- technical abilities: abilities for business and understanding of it as a field;
- conceptual abilities: abilities of strategy and abstract consideration;
- ability of recording history of results achievements;
- interpersonal ability: ability to communicate, motivate and delegate;
- sense for identification and cultivating of talents;
- ability of assessment: ability to make “tough decisions“ within very short time based
on incomplete data, and
- character: qualities which define “who, i.e. what we are“.

3. Motivation is successful knowledge management which assumes relevant motivation.

This is because motivation is an important behavioral factor of knowledge
management holders during exercising their roles.

3.1. Knowledge management as management concept

Achieving organization's goals, i.e. providing full response of an organization to

challenges within its environment is increasingly considered in a light of effective and
efficient knowledge management. In the past fifteen years, a concept of knowledge
management emerged. The knowledge management, as a special management
concept, has become a significant part of management as science and practice, and
this was affected by:
- continuous increase of scientific meetings, seminars and workshops having
the subject: knowledge management as theory and practice;
- increasing number of researchers – not only in scientific and research centers
but (more and more) in profit organizations (particularly in large corporations);
- continuously increasing number of scientific and professional papers;
- increasing number of scientific and professional journals which publish papers
on knowledge management;
- application of knowledge management in numerous researches;
- including knowledge management as a scientific and educational discipline
into curriculums of colleges and faculties;

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 - increased use of knowledge management in practice (particularly within profit
organizations, but also more and more within non-profit organizations as well).

3.2 The essence of knowledge management

The concept of knowledge management, as a young science, is developing and as

such it is rarely defined uniformly. “It can be recognized in the fact that knowledge
management is seen as:
- information (which include knowledge) flow control,
- exercising knowledge management activities,
- as a complex multidimensional process.“ [6]

1. Knowledge management as information flow control is based on information

technologies. “Here, they refer to Bill Gates' statements where he claims: firstly,
“knowledge management is nothing more than managing information flow, getting
the right information to the people who need it so that they can act on it quickly”,
secondly, its “aim is to increase corporate IQ” and thirdly, management does not
refer to technology – “it starts with business goals and processes and an
understanding of the need to share information “.[3]

2. Knowledge management as a process of exercising knowledge management

activities, which core is formed of generating, storing, distribution and application
of knowledge required for achieving organization's goals. [4] This understanding
of knowledge management, which is, basically, a product of business oriented
approach to knowledge management, is advocated (for now) by most of
management researchers. There are numerous papers on knowledge
management which represent elaboration of performances to be executed in
order to provide an efficient process of knowledge management.

Infrastructure Process

Culture Knowledge

Figure 3 Dimension of knowledge management [6]

3. Knowledge management as a complex multidimensional process requiring

simultaneous efficient management in the four fields [4]:
- content, which imply data, i.e. information usefully applicable for achieving
results;

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 - culture, which represents a cognitive frame of attitudes, values, behavioral
norms and expectations common for every organization member;
- process, which should imply a process of knowledge identification,
knowledge acquisition, knowledge distribution, knowledge use and
knowledge storage, and
- infrastructure, which is formed of information system and knowledge
management.

3.3. Problems in knowledge management development

Knowledge management is a young branch, being researched and developed.

Therefore, various problems making some barriers in its development occur,
and the most considerable among these are:
- there are still some discrepancies in defining the essence of knowledge
management;
- there is not complete agreement in fields included in knowledge
management;
- there is no commonly accepted definition of knowledge as knowledge
management content;
- there is no agreement on knowledge management process performances;
- in literature, there are different opinions about individuals whose role is
knowledge management holders (knowledge controllers);
- it is evident that adequate attention is paid to all fields, i.e. aspects of
knowledge management. At the same time, it is a fact that knowledge
management problems are analyzed, i.e. solved partially, instead of
integrally. [6]

It is thought that these barriers in development of knowledge management will

be overcome. It is a fact that knowledge management studies dominate at
present, and these are focused on economical aspects. In addition to
economical studies, there is considerable amount of studies and practical
activities based on the organizational aspect of knowledge management.
Many authors think that (in addition to knowledge handling for effective and
efficient business) adequate infrastructure and effective and efficient behavior
of knowledge management holders in actual processes of exercising their role
(so called Organizational Aspects of Knowledge Management: Case Studies)
is “central issue of successfulness of knowledge management“.

“Knowledge management problems should be studied and solved practically

as multidimensional problems from the following aspects: economical, legal,
ethical, organizational and civilizational. Any event and process involved in
knowledge management should not be treated partially, but integrally.
Effective and efficient knowledge management should be in function of
developing every organization, i.e. system“. [6] Therefore, every solution
(theoretical, i.e. practical) must include determinants which, sufficiently take
into account economical, legal, ethical, organizational and civilizational
demands, i.e. criteria.

4. PERSPECTIVE OF KNOWLEDGE MANAGEMENT

Nowadays, with sudden and fast development of society, the complete civilization
is in the transformation process into a Society of knowledge – the society which
development will depend on successfulness of knowledge management. As
complete science is experiencing florescence and development, this is a reason
for beliefs that knowledge management will experience so intensive development

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 that it will, relatively in short terms, grow into a new management school, the
school which should offer solutions which will, practically applied, contribute to
development of every organization and civilization as whole. Knowledge
management is an assumption and factor of effective and efficient business of
every organization (actual and future) and development of civilization.

Due to everything stated here, we consider as necessary to:

- make studies of all dimensions, i.e. knowledge management fields more
massive and more profound;
- intensify communication between relevant stake holders, particularly scientists
and practitioners;
- promote the role and significance of knowledge management (actual, and
particularly future) – in the Society of knowledge (which has already been
reality).

5. CONCLUSION

Knowledge, as one of important factors of modern world, is necessity of modern

science. Knowledge in modern management is extremely important for present
effective and efficient management. Due to its significance, knowledge
management is highly important, and this is significant for modern business of
production systems. Development and perspective of modern society is reflected
through the management concept (knowledge management) which will
experience growth into a new management school.

LITERATURE

[1] Augier, M., Vendele, T., (1999), Networks, cognition and management of tacit
knowledge, Journal of knowledge management, vol.3, No. 4
[2] Drucker, P., (2000), Postkapitalističko društvo (Post-Capitalist Society), the
Serbian translation from English, Grmeč, Belgrade
[3] Gates, B., (2001), Poslovanje brzinom misli (Business @ the Speed of
Thought), the Serbian translation from English, Prometej, Novi Sad.
[4] Heisig, P., (2001), Business proces oriented knowledge management,
Springer, Berlin
[5] Jovanović P., redactor et al. (2003), Leksikon menadžmenta, FON, Belgrade
[6] Lončarević, R., (2006), Menadžment, Singidunum University, Belgrade
[7] Probst, G.J.B., Pauli N., Binggeli M., (2001), KM-Approach at the University of
Geneva, Geneva.
[8] Radojević, Z.,(2002), Operativni menadžment, Grafoslog, Belgrade

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