Achieving Strategic Advantage and Organizational Legitimacy for Small and Medium Sized NFPs through the Implementation of Knowledge Management

Abstract The principle intent of this paper is to provide a pragmatic examination of the multiple dimensions of the Knowledge Management acumen which has been advanced within industry and academia and its praxis, in whole or in part, as a factor for achieving a strategic competitive advantage for organizations when properly implemented. Finally, to determine through a pragmatic perspective, how Small and Medium Sized Not-for-Profits can adapt and successfully implement a robust Knowledge Management system in order to create a competitive advantage and create organizational legitimacy relative to stakeholder perception given the limitations of financial and functional capabilities challenging the organization. In the last half century there has been a wide- spread agreement among academics and practitioners in extant literature that business environments are be- coming increasingly multidisciplinary and complex and that a major escalation of environmental turbulence has taken place. This has meant a change in the tradi- tional methods in which organizations learn. Market- ing, production, planning, finance, all generate vast amounts of valuable data from all areas of the world, this process of gathering and transferring tacit and explicit information among the functional units for all to benefit and further advance the organization's overall learning, is Knowledge Management (KM). John Browne, CEO of BP said: 'Learning is at the heart of a company's ability to adapt to a changing environment' (Inkpen, Ramaswamy, 2006). Knowledge and knowledge management are now recognized as a valuable corporate resource in the same vein as land, buildings, financial resources, people, capital equipment, and other tangible assets. As such it has become imperative for managers to enhance organizational competence in the development of knowledge capture and transfer. Information technology plays a key role in the successful integration of knowledge transfer. Ironically, some feel the technology creates more problems than it solves, today's technology is both creative and disruptive; an innovation can make an established product obsolete overnight, but also make a multitude of new products possible. The advent of microprocessors destroyed the market for transistors just as transistors destroyed the market for the vacuum tube, but at the same time created opportunities for industries connected to the microprocessors such as CD players, MP4 players, and personal computers (D'Aveni, 1994; Day and Reibstein, 1997; Eisenhardt and Brown, 1998; Normann, 2001; Galbraith, 2002). The development of computers and digitized data, PDA's, cell phones, video conferencing, blogging, and wiki's, are all the new tools which move data quickly at almost no cost, have been instrumental in advancing the efficacy of knowledge management industrial growth. Dimensions of the Knowledge Management Principles Knowledge management is a dynamic discipline, not static; its value is only created and sustained through its use. Paradoxically, in light of all of the organization resources, knowledge is one resource that when used, grows and is never depleted. The caveat however, since knowledge is a resource it must be managed and used in order for it to be valuable, the more it is used, the more it grows and the more valuable it becomes. The principles of knowledge management are presented in three parts; knowledge acquisition, knowledge dissemination, and knowledge application. Knowledge acquisition is the capture and development of both tacit and explicit knowledge in which the organization is exposed including competitors, clients, employees, former employees, and suppliers and then synthesizing this knowledge into a tool that can be used to disseminate the information. Knowledge dissemination involves the transfer of the tacit and explicit knowledge in a manner that is effective in the acquiring recipients understanding of such shared information, this transfer can occur between individuals, groups, departments or organizations. …