Importance of building Knowledge Capability

An organization’s effectiveness at its core knowledge processes depends on its capabilities at dealing with knowledge, in other words its knowledge capabilities. The concept of ‘Knowledge capability’ draws on research fields such as dynamic capabilities and absorptive capabilities and also builds on other knowledge management concepts such as knowledge assets and knowledge strategy.

Organizations are continually evolving partly in response to the rapid changes in the external environment, it is required that the knowledge capabilities must be highly dynamic in order to sustain the competitiveness. The primary source for creation of long-term shareholder value is the organizational strategy. This again depends on the knowledge capabilities aligned to and dynamic to changes in the business environment.

To develop the knowledge capabilities, there is need for organizations to address the organizational domains as well as individual skill and behavioral requirements. Using technology and strong process accelerates this development.

Although the terms Knowledge capabilities and Knowledge assets are sometimes used interchangeably, they are indeed different: knowledge assets may create a competitive advantage, but they are not sufficient to maintain this advantage in the absence of a knowledge capability (Venkatraman & Tanriverdi, 2004). Furthermore, in contrast to knowledge assets, which can be bought by means of mergers and acquisitions, capabilities must be built (Teece & Pisano, 2003). The development of effective knowledge capabilities supports key aspects of organizational performance measurement (Baskerville & Pries-Heje, 1999; Gold et al., 2001).

Knowledge capabilities can be understood as the capabilities of organizations to perform effectively the knowledge processes on which their success depends.