RESPONSIBLE ENTREPRENEURSHIP VISION DEVELOPMENT AND ETHICS

Knowledge management challenges: The case of SMEs in a competitive business environment 93
knowledge in unique skills, shorter informal communication, less bureaucracy and greater
proximity to market” (Saini, 2013, p. 578).
It is very important to clarify three concepts (data, information and knowledge) to understand
what knowledge management (KM) represents. According to Davenport and Prusak
(1998), data represents “a set of discrete, objective facts about events, the raw materials used
in organizations
for the purpose of creating information” (Doan, Rosenthal-Sabroux, & Grundstein, 2011,
p. 307). Information becomes knowledge once “it is processed in the mind of individuals”
(Alavi and Leidner, 2001, p. 109). Knowledge represents a “fluid mix of framed experiences,
values, contextual information and expert insight that provides a framework for evaluating
and incorporating new experiences and information” (Davenport & Prusak, 1998; Doan et.
al., 2011, p. 307). Knowledge is recognized as a “key organizational asset and its creation,
dissemination and application as a critical source of competitive advantage” (Alawneh et. al.,
2009, p. 98). The concept “knowledge” is “apparently consisting of data, information, intelligence,
skill, experience, expertise, ideas, intuition or insightin the context in which it is used”
(Gao, Li & Clarke, 2008, p. 4; Tan, 2010, p. 74). SMEs should focus on knowledge and on
KM because small businesses have developed “innovative ideas and technological breakthroughs”
to the society (Davidson, Wood & Griffin, 2009, p. 20).
According to KM theorists, knowledge can be explicit, tacit, critical or knowledge retention
(Davenport & Prusak, 1998; Pan & Scarborough, 1999; Doan et. al., 2011). Explicit knowledge
is “knowledge that has been or can be articulated, codified, and stored in certain media
and can be readily transmitted to others” (Doan et. al., 2011, p. 307). Tacit knowledge “is
found embedded in action, commitment, involvement in a specific context and it is also derived
from personal experiences; it is subjective as well as difficult to formalize” (Nonaka, Toyama
& Nagata, 2000, pp. 2-5). Critical knowledge is important to the business to successfully fulfill
its mission (Kaplan, 2010). Grundstein and Rosenthal-Sabroux (2008) introduced the concept
of “crucial knowledge”, which is the knowledge that is essential for decision-making
and the progress of value-adding processes because it involves “vulnerability, scarcity, accessibility,
cost and delay of acquisition and also it has influence on the company’s life, markets
and strategy” (Grundstein & Rosenthal-Sabroux, 2008; Doan et. al., 2011, p. 307).
Knowledge retention is about “focusing on the critical knowledge that is at risk of loss, prioritizing
what is at risk based on potential knowledge gaps and their impact upon overall organizational
performance and then developing actionable plans to retain that knowledge” (Kirsch,
2008; Doan et. al., 2011, p. 308). A key source for performing knowledge retention is “to
grow the institutional memory of the organization” because in this case “employees can learn
from past successes and failures to ensure positive results” (Liebowitz, 2009, Doan et. al.,
2011, p. 308). In a dynamic business environment, knowledge, capabilities and resources are
important sources to gain sustainable competitive advantage. Knowledge-based capabilities
are strategically important to create and develop sustainable competitive advantage (DeNisi,
Hitt, & Jackson, 2003, p. 4). After using them in SMEs, resources decrease, while knowledge
assets increase with their use. Knowledge is considered the only resource that is difficult
to imitate (Evans, 2003; Tiwana, 2002).
KM has attracted the attention of various companies all over the business world. The multinational
companies’ practices have shown that knowledge could drive them to innovate faster
than their competitors, to increase the productivity and to increase organizational knowledge
capital etc. The tools and methods of KM should be recognized to be important as well for