Essentials of Knowledge Management

2.3. Matter of Perspective

The corporation was invented in the seventeenth century as a legal entity designed to generate capital while minimizing the risk to the owners and operators. For the first few hundred years, labor was considered a largely undifferentiated raw material used in the capital-generating engine, just like iron, coal, or cotton. Innovation, direction, and vision came from senior management, with the tacit understanding that unquestionably following the corporate vision would be rewarded with a paycheck, a paid vacation, and sometimes even a retirement package.

However, in the years since corporations began, competition, legislation, charismatic corporate leadership, and political realities have changed the nature of the business landscape. In the modern customer-focused service economy, success depends on how management regards employees, especially relating to how a bottom-up approach to innovation is fostered. Innovation in the current economy is about applying new ideas to old problems or applying old ideas to new problems, regardless of whether the ideas are from employees or management. In either case, information is disseminated and applied to improving efficiency and effectiveness, as reflected in the bottom line.

Although this information sharing can occur through an informal encounter of employees with similar interests or those who share a water cooler, proponents of Knowledge Management contend that it won't improve the effectiveness of the corporation ...