Knowledge management field draws a clear line between data, information and knowledge. Data can be compared to a set of facts or in an organization - “structured records of transactions” (Davenport and Prusak, 1998; p. 2) or “content that is directly observable or verifiable” (Dalkir and Liebowitz, 2011; p. 9). Afterwards the data are used as a raw material for generation of information. Davenport and Prusak define information similar to Zack (1999) as a message with meaning, which is transmitted as a physical document or in the process of communication. Information is stored in the books, databases and software programs (Drucker, 1993). Knowledge is richer and broader than information, but derives from it.
“Knowledge is a fluid mix of framed experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of knowers” (Davenport and Prusak, 1998; p. 5).
There are two types of knowledge - tacit and explicit. Explicit knowledge can be formulated systematically in form of words and numbers. Therefore, it can be transmitted in formal language, for example as hard data, codified procedures, or manuals (Nonaka and Takeuchi, 1995, Nonaka and Konno, 1998). However, an important part of the organizational knowledge is also preserved in highly personal tacit knowledge. Nonaka and Konno (1998) describe two dimensions of tacit knowledge. The first one is rather technical aspect and refers to the skills of worker, also called “know-how”. The second dimension is cognitive and it forms the way people see the world, since it is rooted in beliefs, ideals, and values (Nonaka and Konno, 1998). Tacit knowledge is gained through direct experience and action (Zack, 1999) and learned also with body not only with mind (Nonaka and Takeuchi, 1995). It is intuitive and difficult to communicate (Nonaka, 1991), but can be shared naturally through face-to-face conversations, storytelling, shared experience (Zack, 1999), mentoring (Dalkir and Liebowitz, 2011) and apprenticeship (McAdam et al., 2007). In order to process the tacit knowledge it has to be converted first into explicit knowledge (Nonaka and Takeuchi, 1995).
Beeby and Booth (2000) summarize the differences between inter-organizational transfer of tacit and explicit knowledge. The main issues related to tacit knowledge are the following: it is more difficult to transfer and integrate; might be transferred unintentionally; possible risk of diffusion of strategic assets; and it requires cultural fit. In contrast, the transfer and integration of explicit knowledge is much easier, cultural fit is less of a problem, but the knowledge is still context-dependent. However, tacit knowledge has a greater strategic importance (Beeby and Booth, 2000).
In organization knowledge management (KM) is a part of everyday life. It gathers existing knowledge and makes it available to organization, which uses the valid knowledge for further learning and generation of productive and effective action (Fulmer and Keys, 1998, Bennet and Bennet, 2008).
Dalkir (2005; p. 3) gives a following complex definition of knowledge management:
“Knowledge management is the deliberate and systematic coordination of an organization’s people, technology, processes, and organizational structure in order to add value through reuse and innovation. This coordination is achieved through creating, sharing, and applying knowledge as well as through feeding the valuable lessons learned and best practices into corporate memory in order to foster continued organizational learning”.
One of the popular practical definitions of knowledge management is suggested by Holsapple and Jones (2004; p. 156): “knowledge management is concerned with ensuring that the right knowledge is available in the right form to the right processor at the right time for the right cost”. Also Liebowitz and Megbolugbe (2003; p. 189) make it short and state that knowledge management “deals with how best to leverage knowledge internally and externally”.
There are many different definitions of knowledge management available. Nevertheless, there is quite a lot of consensus on what the objectives of KM are. The purpose of knowledge management is to “maximize the enterprise´s knowledge-related effectiveness and returns from its knowledge assets and to renew them constantly” (Wiig, 1997; p. 1). Knowledge management helps to identify critical knowledge and its location so that the organization can know “what it knows” and benefit from this knowledge (Dalkir, 2005).