Finland & Knowledge Management

A few thoughts from Finnish authors

During the last years knowledge has become a more important production factor, compared to traditional production factors like capital, machinery and wealth. Actually we have seen a movement from resource based point of view towards knowledge based point of view in corporations. According to this point of view, knowledge is a critical factor for organization. That’s why knowledge and know-how have been highlighted a lot in competition between companies and in international competition. An important point in knowledge management is to pay attention to collective knowledge and know-how and to evolve these things using teamwork. The goal of knowledge management is to make organization work more effectively, so company can strengthen its competitive capabilities and success. You need to have enough skilled workers and to educate them when needed. It’s not just about the knowledge itself, but about how to use and spread the knowledge in the most effective and wide way.

(Kukko, M., Yliniemi, T., Okkonen, J. & Hannula, M. 2004. Osaamisen ja tietämyksen
hallinnalla kilpailukykyä – käytännön toteutus suomalaisissa yrityksissä. e-Business
Research Center. Researc Reports 10. Tampere, Cityoffset Oy. 43 s.)

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The amount of knowledge has grown a lot and that has brought many challenges for controlling and managing knowledge. Knowledge is accumulated in individuals, systems and environment and knowledge management is about how to use this knowledge capital in a most effective way and about how to create new knowledge most effectively. Even though computers and internet helps processing and spreading information, the most important resource is the human being processing information, because he can make the information trustworthy. The main idea is that knowledge spreads across the organization and it is not kept secret. Controlling the knowledge is a big problem nowadays because of the huge amount of it and that’s why tools for managing this knowledge will become more important in the future.

(Suurla, R. 2001. Avauksia tietämyksen hallintaan. Helsinki, Oy Edita Ab. s. 190)

Most important thing is to create new knowledge, but it’s important as well to use silent and old knowledge to be effective. The goal is to create and strengthen core competences (Strömmer).

(Strömmer, R. 1999. Henkilöstöjohtaminen. Helsinki, Oy Edita Ab. 1. painos. 225 s.)

Knowledge Management and Corporations

Even the traditional production industries are changing into a more knowledge and know-how intensive sectors. Reasons for this are:

Macro-scale
– High cost of employees
– High level of education and know-how
– Looking for competitive advantage demands specialization

Micro-scale
– International competition
– Possibility for a long and profitable customership
– Possibility to strengthen the relationship with customer

Knowledge Management and Software Industry

Software industry is getting more and more important in Finland all the time. Different kinds of softwares are getting very important for all kinds of companies working in different fields. They are more often a built in application of products made by traditional companies like production industry and services. Other branches of businesses are becoming more and more knowledge intensive, so it’s important to take a close look for today’s software industry. E-business and its competitiveness is based on effective use of programs.

Some Facts of Finnish Software Industry

– It employs directly 30 000 people and other 30 000 people are working with software in traditional companies
– 80 % of software companies have less than 5 employees
– Global markets grow 10 – 15 % a year

Software companies work in a very knowledge intensive environment and the employees are usually real specialists of a narrow sector. You need knowledge management to make the special knowledge of separate employees and teams to move within the company. It’s very hard to manage this process because a lack of good tools and of course there is a problem of what to measure. It’s the same problem in all specialist organizations, where the boss usually knows less about the subject than his employees.
“ To succeed software corporation should know its target markets needs and working habits, technologies that it uses, to control the processes how to develop software, to know the factors of its delivery channels and to know international business”

(Tyrväinen et al. 2004)

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Knowledge Management in the modern world

– Traditional production factors are easy to get by anyone
– Copying competitor’s products and knowledge is easier than ever because knowledge is spreading faster than ever before.
– Competitive advance is being searched from knowledge
– The one who succeeds creates and assimilates new knowledge and especially learns faster than the others.

Most important thing is: Right knowledge in a right time in right way into a right place. It means refining data and information to a knowledge and understanding. But what and what kind of information does one need? The users should be capable enough to be able to use knowledge in hand.

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