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Future Challenges for KM 429

exhaustive data warehouses. As a result, this model is also a very good fi t with com-
munities of practice.
It is important to critically assess an organization and to identify the type of poli-
tical model that is in place so that potential KM barriers can be better anticipated.

Shift to Knowledge-Based Assets

The paradox of value ( Boisot 1998 ) lies in the fact that the easier it is to extract the
knowledge, the less value it actually embodies. That is to say, the more the knowledge
is tacit, the greater its value (see fi gure 13.1 ).
Knowledge assets are a source of competitive advantage for fi rms that possess them.
Yet the way the possession of knowledge translates into a competitive advantage is
not well understood. Of course, this does not happen automatically — a fi rm has to
know how to extract value from knowledge assets. There are also defi nite costs
incurred in managing knowledge assets ( Boisot 1998 ). These are:
• Moving knowledge costs incurred by data processing and data transmission.
• Codifi cation costs due to searching and selections made under uncertainty.
• Abstraction costs arising from generalizing knowledge over wider problem spaces.
• Diffusion costs incurred when communicating with potentially large audiences in
ways that can be understood and can lead to effective responses.
• Absorption costs of getting potential recipients of new knowledge to internalize it
and familiarize themselves with it.
• Impacting costs of applying internalized knowledge in a variety of concrete
situations.

Cost/
Benefit
Idiosyncratic Codified
Rare Common
Tacit Explicit

Figure 13.1
The value of a knowledge asset