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Chapter 11 Managing Knowledge 475

Review Summary

1. What is the role of knowledge management and knowledge management programs in business?
Knowledge management is a set of processes to create, store, transfer, and apply knowledge in the
organization. Much of a firm’s value depends on its ability to create and manage knowledge. Knowledge
management promotes organizational learning by increasing the ability of the organization to learn
from its environment and to incorporate knowledge into its business processes. There are three major
types of knowledge management systems: enterprise-wide knowledge management systems,
knowledge work systems, and intelligent techniques.

2. What types of systems are used for enterprise-wide knowledge management and how do they provide
value for businesses?
Enterprise-wide knowledge management systems are firmwide efforts to collect, store, distribute,
and apply digital content and knowledge. Enterprise content management systems provide databases
and tools for organizing and storing structured documents and tools for organizing and storing
semistructured knowledge, such as e-mail or rich media. Knowledge network systems provide
directories and tools for locating firm employees with special expertise who are important sources
of tacit knowledge. Often these systems include group collaboration tools (including wikis and social
bookmarking), portals to simplify information access, search tools, and tools for classifying informa-
tion based on a taxonomy that is appropriate for the organization. Enterprise-wide knowledge
management systems can provide considerable value if they are well designed and enable employ-
ees to locate, share, and use knowledge more efficiently.

3. What are the major types of knowledge work systems and how do they provide value for firms?
Knowledge work systems (KWS) support the creation of new knowledge and its integration into the
organization. KWS require easy access to an external knowledge base; powerful computer hardware that
can support software with intensive graphics, analysis, document management, and communications
capabilities; and a user-friendly interface. Computer-aided design (CAD) systems, augmented reality
applications, and virtual reality systems, which create interactive simulations that behave like the real
world, require graphics and powerful modeling capabilities. KWS for financial professionals provide
access to external databases and the ability to analyze massive amounts of financial data very quickly.

4. What are the business benefits of using intelligent techniques for knowledge management?
Artificial intelligence lacks the flexibility, breadth, and generality of human intelligence, but it
can be used to capture, codify, and extend organizational knowledge. Expert systems capture tacit
knowledge from a limited domain of human expertise and express that knowledge in the form of
rules. Expert systems are most useful for problems of classification or diagnosis. Case-based reason-
ing represents organizational knowledge as a database of cases that can be continually expanded
and refined.
Fuzzy logic is a software technology for expressing knowledge in the form of rules that use approxi-
mate or subjective values. Fuzzy logic has been used for controlling physical devices and is starting to
be used for limited decision-making applications.
Machine learning refers to the ability of computer programs to automatically learn and improve
with experience. Neural networks consist of hardware and software that attempt to mimic the thought
processes of the human brain. Neural networks are notable for their ability to learn without program-
ming and to recognize patterns that cannot be easily described by humans. They are being used in
science, medicine, and business to discriminate patterns in massive amounts of data.
Genetic algorithms develop solutions to particular problems using genetically based processes such
as fitness, crossover, and mutation. Genetic algorithms are beginning to be applied to problems involv-
ing optimization, product design, and monitoring industrial systems where many alternatives or
variables must be evaluated to generate an optimal solution.
Intelligent agents are software programs with built-in or learned knowledge bases that carry out
specific tasks for an individual user, business process, or software application. Intelligent agents can
be programmed to navigate through large amounts of data to locate useful information and in some
cases act on that information on behalf of the user.

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