Knowledge Management in SME's


Ankush Sharma
Academic Associate
Indian Institute of Management

"Life Is Lived Forward But Understood Backwards" Is a well Known saying,  But the Implication of this adage will be more prudent In today's competitive world. Organizations are giving more emphasis on each and every type of initiatives which can lead to Increase in productivity vis a vis increase in there market share or in nutshell we can say to differentiate themselves from other. There are tones of data in the organization, The Effective Data management Can lead to More information based for the industry or to be more specific to the knowledge.

Lets Discuss Some thing related to This Specific term. What does one understand about knowledge??? What is knowledge?

Every person can give his own definition About knowledge May Be based On His Or her understanding of knowledge. We will talk in very general term about knowledge.

The Under Standing Of the Subject Or about the concept which an individual have is what knowledge means, Or we can say that right interpretation of information is what knowledge is. But where does this knowledge stay???????? The Answer to this question is a straight forward opinion that is
(MIND ) And from here the concept of knowledge management has come to the picture. Knowledge resides in mind and to tap or to document this knowledge is one the most Herculean task which an organization is facing in today's competitive world. The Text book definition Of knowledge management goes like this " Knowledge management is a systematic process for creating, acquiring, synthesizing, learning, sharing and using knowledge and experience to achieve organizational goals"

Knowledge management can be explained in one sentence "That is To Tapped the Tacit Knowledge" (Most unspoken Knowledge).

For going ahead on knowledge management let us Sort out the key dimensions of knowledge management which can help us in solving the major challenge ahead of us

Key Dimensions Of knowledge Management

Let look On Hay /Mcber iceberg model for giving us insight into this

Managing employee competencies is a key dimension of this, as well as linking corporate knowledge assets that are both codified (written) and personalized (unwritten, social). Hay/McBer, a leading UK management consultancy firm and inventors of competency management, define a managerial competency as an "underlying characteristic of a person that enables them to deliver superior performance in a given job, role or situation." Their iceberg model (see Figure 1, following page) of managerial competencies places knowledge and skills at the tip, with the underlying yet conscious elements being social role and self-image; traits and motives are at a subconscious level. The social role reflects values (what you see as important) while the self-image reflects identity (whether you see yourself as an expert). The traits are the habitual behaviors that we recognize in each other while the motives are the thoughts and preferences that drive behavior and satisfaction.

Much theory has been written about knowledge management but there has been limited discussion about its practical benefits and how to implement it and deliver business benefits.

PGS Data Processing has used knowledge as a focal point to give a new perspective and understanding of what is driving the organization forward.

There are two key issues for any knowledge management strategy:

1. Management of explicit information and processes

2. Management of people and the environment in which they work so that tacit knowledge is exchanged more naturally and systematically.

One of the primary reasons why many knowledge management initiatives fail is because too much emphasis has been placed on explicit knowledge and IT solutions.

There are seven levers of knowledge strategy, these are:

1 Customer Knowledge: - To survive any organization needs to be a customer focused with a customer relationship that requires a consistent and co-ordinated approach to the market.

2 Knowledge in products and services: - Value-added, new state of the art products should be beneficial to clients and command premium prices. Knowledge needs to be developed and captured through the innovation process and then transferred to the wider sales and production processors.

3 Knowledge in people: - A culture must be developed where Knowledge is valued and shared. Knowledge must also be Managed so that the right people have the right knowledge in time to support the business by having the competences to use, market and sell the products developed by an in-house R&D division

4 Knowledge in processes: - Consistency of quality to global customers requires that different groups perform the same process that the same consistent quality is achieved worldwide. This is a key Objective of the company's current global quality management system.

5 Organizational memory: - Retention of lessons learnt: problems solved become more difficult in an organization that has restructured. The organization and systematic storage of practices and project histories is required to avoid resources being wasted to reinvent the wheel.

6 Knowledge in relationships: - Boundary spanning across Internal and external relationships must be overcome in a Globally dispersed organization with global customers.

7 Knowledge as an asset: - Development of intellectual Capital with KM will require resources which have to be Justified. By measuring intellectual capital and managing

Its development through the KM process, it is possible to Identify the leverage and benefits, and so attract and retain Resources.

There are six dimensions to KM organization:

(a) Leadership
((b) Technology
(c) Culture
(d) Measurement and process

(e) Behavior
(f) Conceptualization

This theoretical paper adopts a conceptual, multi-disciplinary approach. First, knowledge can be stored and transmitted via institutions. Second, knowledge "sub networks" or smaller groupings within larger networks can become key repositories of knowledge. The concept of knowledge "sub networks" needs to be tested against empirical evidence, which should include a cross-national comparison of knowledge-based cities.

Perception Regarding Knowledge Management.

There is various perceptions regarding implementation of knowledge management in different organization. We had find out the possibilities of perception of different small and medium enterprise and try to analyse these perception regarding knowledge management and then latter on compared this perceptions with perceptions prevailing in large scale enterprise.

On the basis of focus group discussion and detail understanding of knowledge management following reference can be drawn as comparision to large organization





To extract insights from in-depth discussions on issues related to implementation of KM in SME's.

As We had used qualitative research techniques as focus group discussion with respect to implementation of knowledge management in small and medium enterprise vis a vis to implementation in large enterprise

Our focus group discussion was based on some small and medium enterprise in region (Bhopal)

1) Mandideep
2) Govindpura industrial area

For this study we have done focus group discussion with twelve people and having one as moderator, discussions have different questions

And we had covered people from different type of industry like foundry, casting, fabrication, machining and processing industry.

The Discussion Where Based on Key management initiatives with emphasis on knowledge management as such.

Discussion where carried out for 15- 20 Minutes on following questions

* What are the bottlenecks for small and medium enterprise?
* How companies can improve productivity in general term?
* Tacit knowledge can be correlated to productivity?
* How precious knowledge can be lost in organization if the do not have proper system?
* Did knowledge management can play a key role in industrial growth?
* What are the different perception about knowledge management in organization (SME)?
* What are the road blocks in successful implementation of knowledge management in small and medium enterprise?
* Do Management initiative provide a long term ROI to small and medium enterprise?
* What are the key parameters which differ small and medium enterprise other than turn over? With Emphasis on Employee Approach towards a specific task?
* What are the key sources of knowledge in small and medium enterprise?
* Where are the different area where loss of knowledge leads to effect on productivity for the company?
* Is Return on investment can be justified for implementation of knowledge management for the organization?
* What are the preconceived notion for knowledge management not fit for small and medium enterprise?

On the basis of discussion the key findings which can be highlighted are can be as follows
  • Management should look upon the key areas where there are huge data loss for the company
  • What are the key problems which are faced by small and medium enterprise, according to the discussion which can be listed as follows
    * To Compete on Price ( For your cost cutting parameter knowledge management can help)
    * Employee attrition rate are very high which leads to lot of loss of valuable data which needs to be tapped and are directly propotional for loss on productivity
    * Tacit knowledge need to be tapped for large extent


Knowledge management can really help in providing systematic approach to the knowledge loss of the particular company.

According to the discussion there are some hindrances for not implementation of knowledge management Huge Infrastructure

* Not Directly propotional to return on investment with respect to SMES
* Huge network need to be set up for implementing knowledge management
* Employee attitude towards radical change in the ongoing system is also a problem to be dealt for

To make conclusions and recommendations for further developments of KM in the SME sector.

Knowledge management as a concept is very attractive and provides huge business opportunities that should not be missed. It is an engine that transforms knowledge into business value. However, implementation of knowledge management is not easy for small and medium enterprise. Orgnizations have to grabble various issues and challenges such as organizational culture, strategy, information technology, knowledge organization. Despite all these issues and challenges Companies world wide have shown keen interest in knowledge management. As far as India is concern knowledge Management is still infancy stage. It has to cover a lot of ground to come up the level of knowledge management implementation In India there is need of national knowledge management concept to create and harness the knowledge of our own people and start creating and using our own software packages. The core competency definitely exist in our R& d laboratories, academics, institutions,  software houses and industries.  In small and medium enterprise there is a need of customized knowledge management packages as every enterprise as a thrust area in one or two module of knowledge management so a better understanding of key area where knowledge management should be implemented is a major driving force for implementation of knowledge management vis a vis companies internal and external environment analysis.

Further scope of research can be stated as an empirical study need to be done with setting some key hypothesis based on productivity and effect of knowledge management in enhancing that.

"Learning from past mistake, time has come to amend and takes knowledge management as the concept in the right direction and reap its benefit to the fullest".


1. Aiavi, M. and Leidner, D. (2001),"Knowledge Management and Knowledge Management system": Conceptual Framework and Research Issue.

2. Muruthy, C.S.V (2002), "E- Commerce: Concepts, Models, Strategies", Himalya Publishing House, pp.778-808.

3. see, "Knowledge Management Mart set to boom: Frost and Sullivan", at

4. see, "Knowledge Management in India", at

5. See, Barclay, O. Robecca and Murray C. Philip "What is Knowledge Mangement?" at

6. See, Hildebrand, Carol, "Does KM=IT?, at

7. see, Surmacz, Jon and Santosus, Megan, "The ABCs of Knowledge Management" at

8. Selvarag, A (2003), "Knowledge Management: Imperatives for Business ", the Management Accountant, Oct.2003 pp.731-32.

9. Vakharia, Bharat ((2000), "Knowledge Management for Organisational Excellence (Global Managers )", Himalya Publishing House, pp.210-240

10. Vorbeck, Jens; Heisig, Peter and Mertins, Kai ((2001), "Knowledge Management: Best Practices in Europe"' Springer

Ankush Sharma
Academic Associate
Indian Institute of Management

Source: E-mail June 7, 2006


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