Knowledge is information
According to Bergeron (2003, p.10), knowledge is information that has been organised, synthesised, or summarised to enhance understanding, awareness, or comprehension. Knowledge combines metadata, which is the information about the context in which information has been used with the awareness of the context in which metadata can be successfully applied. Knowledge entails concrete understanding combined with the practical ability of how to perform a particular action. The acquisition of knowledge may be through academic endeavours or practical experience. In human resource management, knowledge is defined as the capacity to discriminate within and across different contexts. In an organisation, decisions need to be made regularly, therefore, making it necessary for organisational leaders to utilise knowledge in problem-solving. Individuals need to analyse and interpret information to make it fit with social situations in daily life.
In analysis and interpretation, an individual may discriminate against information by choosing to focus on which information to act on while ignoring the other. This discrimination is based on several factors such as learning, experience, level of confidence in the source of information, and intuition. These factors determine how an individual uses information in decision-making, and the level of discrimination applied. According to Wilson and Campbell (2016, p.830), knowledge can be valid or invalid based on its organisation. The functionalism paradigm describes knowledge as regulated, objective, and can be proven quantitatively and qualitatively. This paradigm provides for rigorous testing and verification of knowledge to determine its validity. On the other hand, the interpretivism paradigm describes knowledge as regulated and subjective. Under this paradigm, knowledge is based on unquantifiable qualitative data subject to personal interpretation.
The sole purpose of acquiring knowledge is to utilise it in performing duties, making decisions, and solving problems. Bergeron (2003, p. 26) notes that knowledge management is not a final product but a continuous process. Knowledge should be used as a means to an end instead of being an end itself, and one should not acquire knowledge for its sake but the sake of its application. According to Bloom’s taxonomy, knowledge retention marks the beginning of advanced thinking (Webb, 2017, p34). The first stage in knowledge management involves acquiring knowledge and memorising it to be used when needed. The second stage involves understanding the information and its meaning, followed by applying the knowledge in different situations. The fourth stage in knowledge management consists of the application of critical thinking to synthesise information acquired from a broad range of sources. The final stage in knowledge management includes making decisions in different situations using acquired knowledge.
According to Bergeron (2003, p.17-18), human capital is composed of three forms of knowledge; these are tacit, explicit, and implicit knowledge. Tacit knowledge is ingrained in the subconscious of an individual and thus becomes hard to explain to others; knowledge involving activities such as pattern recognition falls under tacit knowledge. Implicit knowledge is similar to tacit knowledge but differs in that it can be passed on through knowledge engineering. Unlike the other two types, explicit knowledge can be easily acquired through verbal or written instructions. This knowledge can be found easily in books and manuals regarding a particular field. Knowledge can be converted into different forms within an organisation as needed based on differentiation.
According to Collings and Wood (2009, p. 123-126), there are several ways in which an organisation can manage knowledge. Knowledge management in an organisation can be achieved through the recruitment process. This strategy is achieved by hiring people whose values and attitudes fit those of the organisation’s culture and norms. The second method for knowledge management in an organisation is through creating and maintaining a culture focused on knowledge in the organisation. A culture that encourages knowledge acquisition and sharing is beneficial to an organisation and maintains a highly knowledgeable workforce. The fourth knowledge management method is job design. Organisations can utilise job design by designing their activities and processes in a way that ensures workers utilise their knowledge and skills while continuously developing them. The fifth knowledge management strategy that organisations can utilise is training. This strategy requires organisations to provide opportunities for self-development by offering training with a broader purpose to encourage reflexivity and experimentation. The final strategy for knowledge management is the reward; in this strategy, organisations reward teams or individuals for appropriate knowledge related behaviours.
Case Study
This case study is based on the life of my cousin, Harry Radcliffe, who is currently a hedge fund manager at a prominent international capital management firm. Ever since he was young, Harry exhibited a keen interest in mathematics. During the 2008 financial crisis, Harry’s parents lost more than 90% of their wealth since their assets were held in the form of stocks. Harry was pulled from a private high school since they could no longer afford it; this made him interested in how financial markets work to rebuild. In college, harry pursued finance and participated in various events and competitions held by capital market firms. One of these firms offered him an internship where he outperformed even some of the employees in trading; he was thus offered employment after graduation, where he rose through the ranks to a managerial level in a few years due to his exceptional skills.
According to Harry, the firm has a culture that encourages people to acquire and share knowledge. This culture is important since trading in stocks requires one to be well informed of different factors about a firm and its prospects before buying its shares. The firm also offers higher salaries for the employees according to the profits their traders make, and Harry cites this as one of the factors that drive him to do extensive research about firms before taking a position. When I was in high school, I asked him if I could visit his firm as I felt exposure would help me make a decision in which career to pursue in university. At the firm, I felt confused since all I could see were people in varying moods looking at some lines on a computer. I asked harry why he couldn’t teach everyone how to trade as effectively as he did, and he told me that there are aspects of trading that are hard to pass on to another person. However, he informed me that he was developing a framework of how he made his decisions, which he hoped would help most of the young traders to grow. Unfortunately, I realised that I was not interested in finance due to the high-risk nature of the industry.
Case Study Reflection
This case study is an excellent example of knowledge management. In the case study, different methods of knowledge acquisition and knowledge itself can be seen. Harry is better at trading and makes regular profits. However, he is unable to explain his decision making mechanics to young traders; this is tacit knowledge. Harry plans to develop a framework, which will attempt to explain his decision-making in trading to be used by younger traders at his firm, the knowledge that will be passed onto the inexperienced traders is implicit knowledge. In university, Harry studied finance while he had excelled in mathematics in high school, knowledge acquired through this education is explicit knowledge.
Harry’s firm has a sound knowledge management strategy in place; however simple, the strategy is efficient for a firm in the capital market. The firm has a culture that encourages knowledge acquisition and sharing; this ensures that employees make informed decisions before executing trades, which ensures the profitable performance of the firm. In addition to this, the firm rewards well-performing employees such as harry, who receive additional bonuses on the profits he makes. The fact that performance is rewarded drives the employees to acquire more knowledge, which will improve their performance as they pursue better remuneration, thus ensuring that organisational goals are met.