Knowledge management in the financial services industry

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The challenge of knowledge management at the organisational level stands in the efficient use of multiple sources of knowledge and in the consolidation of knowledge in the memory of the organization. Knowledge management supervises the development and the promoting of coherent business intelligence. Since the concept of knowledge management matures, it becomes increasingly understandable that knowledge management neither is in relation only with technology nor can be accomplished exclusively through information systems (Kalpic and Bernus, 2006). Knowledge and management of knowledge give emphasis and expect cooperation from a wide range of participants that includes people, procedures and technology supportiveness in an organisation. With the arrival of the knowledge economy, knowledge has progressively been concerned as the most significant resource to maintain competitive advantages in the modern competitive market which changes rapidly (Weissor, Sheng-Tun and Kuan-Ju, 2008). Therefore, knowledge management has been developed into a critical issue in the contemporary field of management and set the bases for the detection, confine, storage, distribution and recycle of valuable knowledge that exist within an organisation (Kalpic and Bernus, 2006) In the current business environment which characterised by increasingly changing rate, financial services industry are in compliance and affected by these changes. The consecutively regulations and deregulation has created an additional compliance burden. Furthermore the deregulations have increased the competition in the financial services companies. Thus, financial services companies have an additional challenge to manage. Knowledge management as an important strategic role for financial services companies concentrates on supporting development based on business capabilities through the usage of new knowledge (Burstein, Zyngier and Rateb, 2002). This paper is dedicated to study knowledge management and knowledge management in financial services industry.

Knowledge

According to Davenport and Prusak (2000) knowledge can be considered as the primary implement to improve the organisational performance and thus attain a sustainable competitive advantage. Knowledge has been suggested as the most important component in wealth creation process (Cole, 1998). As a higher form of information, knowledge promotes the strategic purpose of the organisational while empowering the firm to achieve competitive advantages (Beckett, Wainwright and Bance, 2000). Furthermore, the inability to imitate tacit knowledge, organisational knowledge and complex knowledge obstruct competitors to adopt organisational strategies and processes based on these form of knowledge (McEvily and Chakravarthy, 2002). Consequently, organisations have to identify knowledge relevant to their perspectives and strategies as well as to exploit, enrich and share recognised valuable knowledge. Knowledge can be found in a variety within organisational structure and can be recognised in system practices, processes, people and technology (Cepeda, Galan and Leal, 2004).

The knowledge circulation process

According to Chang, Sangjae and Kang (2004) the knowledge circulation process comprises five procedures. The first component of this cyclic process involves the creation of variety knowledge, express or tacit, enhanced by the different interpersonal relationships of people with different backgrounds. The second component of the cyclical process of knowledge, knowledge accumulation refers to storage of knowledge in a repository of knowledge. All individuals within an organisation can have access to this repository of knowledge to receive the appropriate knowledge relative to their work problems or decisions.

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