SOLUTION
ASSIGNMENT # 01
Ans 01: Organizations have experienced many changes to the ways they operate. The changes are result
of many factors, including the shift to the knowledge economy and the increased streamlining of work
activities because of technological innovations. The shift in focus from products to services has
encouraged greater recognition of the importance of the knowledge held within an organization.
Knowledge is a process of translating information and past experience into a meaningful set of
relationships which are understood and applied by an individual.
As the values of employees and organizational data have become more crucial to the organization’s
outcomes and competitiveness, the concept of knowledge management has emerged. Knowledge
management is the process of identifying, capturing, organizing and disseminating the intellectual assets
that are critical to the organization’s long term performance.
Knowledge management has also been supported by the greater skills employees now bring to their
work roles. Workers are generally expected to possess basic technological competencies in applications
such as word-processing, data-base management, spread-sheet and the internet. Organizations are
therefore keen embrace better and more efficient ways of managing their intellectual assets using
electronic processes, so that the expertise of staff can be shared with others, and recorded for future
references as required.
Learning organizations encourage people to grow and develop, to share their knowledge and learning
with others, and to learn from errors. In learning organizations, knowledge is perceived to be a key
source, but it is also recognized that it needs to be evaluated and renewed through ongoing learning.
This emphasis on growth and evaluation of knowledge base through additional experience is an
important feature of effective knowledge management. People are not static: they make mistakes, learn
and grow to new level of expertise.
ANS02: The increasing difference between company market value and company book value has
prompted academics and practitioners to consider the concept of “intellectual capital” as a key
determinant of the process of value creation for companies, stakeholders, and society as a whole. In this
sense, the identification and evaluation of knowledge, and other intangibles that produce or create
value in the present, as well as knowledge and other intangibles that will produce or create value in the
future in the firm, are main concerns related to wealth creation in the context of Knowledge Economy.
The term Intellectual Capital is used as a synonym for intangible or knowledge asset. Intellectual
capital refers to the knowledge that employees possess as well as their ability to generate it, which
is useful for the firm, and includes individual values and attitudes, aptitudes, and know-how.
The increasing recognition of the commercial value of employee expertise has stimulated organizations
of all sizes and complexity to adopt many of the principles and concepts of knowledge management.
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