Knowledge Management – Value


This article will attempt to demonstrate several ideas in regard to the practical value of KM to an organization and the effectiveness of Knowledge-Based Leadership, as well as the strategic value of KM to an organization and the effectiveness of Knowledge-Based Leadership.

NOTE: a position should be ever-changing or refined depending on the information provided, and since learning is always in progress, we should allow our “conclusions” to change if necessary.

There are different directions one can take when exploring such ideas, as mentioned before. The evidence suggests that KM, both practically and strategically, plays a key role in regard to the overall success of an organization. These successes demonstrate the value that was probably acquired via some kind of practical or strategic KM and Knowledge-Based Leadership.

Practical Value

The practical value of KM to an organization, or how Knowledge Management can actually be applied regarding the organization, would seem self-evident. However, such conclusions are evidently not enough. This is due in part to the over-complication of terms and direction by so-called experts within the field. It needs to be clearly shown that corroboration and information gathering can be a benefit to an organization.

The text (Knowledge Management in Theory and Practice), explores the idea of KM management as a cost/benefit transaction. One of the ideas stated is that aspects of KM simply cost too much and that the monetary expenditure was simply too visible, while the benefits of such initiatives were hard to measure and sometimes simply impossible to touch. Because of this interesting paradigm, the ROI and the period necessary to see it were difficult to assess (Dalkir, 2011). While some businesses will be naïve enough to view KM via similar frames, success stories of organizations that employed knowledge management initiatives are demonstrated repeatedly throughout the business world. Examples include HP, Capital One, and Seven 11, to name a few well-documented cases (Taylor, 2013).

According to Noruzy, Dalfard, Azhdari, Nazari-Shirkouhi, and Rezazadeh (2013), knowledge management has a direct influence on innovation within an organization; but organizational learning and innovation have a direct influence on the performance of the organization. This could be implied to suggest that the practical value of KM in regard to the organization is fundamental because of the direct influence the actual management of knowledge had on the organization’s performance.

The practical value of KM in regard to the effectiveness of Knowledge-Based Leadership also seems self-evident. Knowledge-Based Leadership implies that the leader is deriving the ability or the premise of decisions being made out of the knowledge pool itself. Therefore, the pool from which the information is being derived must be sound and plentiful. Because of the complexity of the leader’s role, a leader impacts Knowledge Management substantially in regard to their organizations. This is because the leader in question dictates the manner or environment in which followers can interact with the knowledge pool. This could be as simple as allowing easy access or manipulation of the information (Nguyen, Mohamed 2011). So, the results fall squarely on the shoulders of the leader. Hence the value of the result is subject to the direction of the leader, but this suggests that the value of knowledge must remain high.

Strategic Value

There is a strategic value of KM to an organization, that is to say, once the KM strategy is defined and then utilized. When this occurs, the organization will have a direction to go with a comprehensive list of KM initiatives, tools, and approaches that will support long-term business objectives (Dalkir, 2011). Leadership often neglects to see or support KM efforts that create organizational value. Furthermore, KM initiatives will often not meet or align with the organization’s strategy (Taylor, 2013). This does not negate the strategic value of the knowledge being managed, instead and once again; it negates the value of the specific leader. The knowledge itself should never be the target of question in regard to value.

When utilized, the value of KM in a strategic sense is fairly simple. For example, if an organization seeks to remain competitive, it will innovate. Innovation derives from KM initiatives. These innovations help to position the company in the marketplace. Knowledge management within the organization can make or break these initiatives because if that knowledge of or surrounding the innovation becomes knowledge gained by a competitor, then the originator of the innovation has lost their strategic advantage.

There is a strategic value of KM in regard to the effectiveness of Knowledge-Based Leadership. The leader is one who allows knowledge to develop or even flux, and it matters little what capacity the leader may be in (Correia, Dirk, 2010). The wrong leader could kill an organization by not allowing knowledge to reach specific areas of an organization that perhaps another leader would deem necessary. An example of this might be that the organization is required by law to self-audit a specific function and deposit the self-audit sheets weekly. However, leadership has decided that the information on the sheets is too “sensitive” and will not allow the majority of workers to participate in that knowledge pool. Instead, they have an “auditor” handle this task. This could greatly hinder the ability to follow through with the law if something were to happen to the auditor, such as sickness or an accident outside of work.

On the other hand, the wrong leader could kill an organization by allowing too much knowledge to reach specific areas of an organization that would otherwise be unacceptable. An example of this might be sensitive information about an associate that is personal or confidential in nature. Sharing that information with those who would otherwise not need to know such information opens up the organization to litigation on several levels.

These are just a couple of examples of what one could assume would be infinite examples. Still, these simple examples demonstrate the strategic capacity of KM regarding the effectiveness of Knowledge-Based Leadership. True, the examples are slightly off-topic, but they are provided to demonstrate the complexity and variety within the defined terms.

Perhaps the phrase “need to know” should be injected into this point as a key component of Knowledge Management as well. Perhaps it should be reiterated that knowledge management at its root implies dealing with or controlling that knowledge. The leadership aspect often determines how effectively that knowledge can be used or for what purposes that knowledge is used for.


This article has explored both the practical and strategic aspects of KM and the effectiveness of both in regard to Knowledge-Based Leadership. With the evidence provided, it should be much easier to see and establish the value of the preceding based on the successes of other organizations who utilize such initiatives, the possible inclusion of the examples provided, and of course, the expert positions that matter most.

You might also like my article titled, “Knowledge Management – Communication.


  • Correia, d. S., & Dirk, v. D. (2010). Knowledge workers, servant leadership and the search for meaning in knowledge-driven organizations. On the Horizon, 18(3), 230-239. doi:
  • Dalkir, K. (2011). Knowledge management in theory and practice. Cambridge, Mass: MIT Press.
  • Noruzy, A., Dalfard, V., Azhdari, B., Nazari-Shirkouhi, S., & Rezazadeh, A. (2013). Relations between transformational leadership, organizational learning, knowledge management, organizational innovation, and organizational performance: an empirical investigation of manufacturing firms. International Journal Of Advanced Manufacturing Technology, 64(5-8), 1073-1085. doi:10.1007/s00170-012-4038-y
  • Nguyen, H. N., & Mohamed, S. (2011). Leadership behaviors, organizational culture and knowledge management practices. an empirical investigation. Journal of Management Development, 30(2), 206-221. doi:
  • Taylor, G. (2013). Implementing and maintaining a knowledge sharing culture via knowledge management teams: a shared leadership approach. Journal of Organizational Culture, Communication and Conflict, 17(1), 69-91. Retrieved from