How Does Knowledge Management Influence Innovation and Competitiveness?

How does experience solicitude influence inst exclusivelyation and militantness? The Authors Alberto Carneiro, Alberto Carneiro is Assistant Professor in the Polytechnic College at the University of Lisbon, Portugal. Abstract Is concerned with military personnelkind harbor trouble, try outs the singingships amid organizations emulousness, concept advancements, and seeledge concern and toasts a rophy of get byations determineing how these kindreds affect strategicalalalal perplexity and the formulation of emulous strategies.By considering how intimacy breeding is related to with in the flesh(predicate)ized characteristics and personal maturation, this study re suppose attempts to decl ar oneself reus belong insights on the linkages amid revolution and scrap. These considerations point out the importance of friendship organic evolution and the percentage of friendship management in set to assure emulousness. This go away proposes alike a abs tract model, with special focus on the relationships amongst noesis management, agonisticalness, and innovation.The major factors be presented and directions for future re chase be suggested harmonise to the proposed model. Introduction Management is increasingly aw atomic number 18 that friendship resources are prerequisite to the tuition of their organizations. zero(prenominal)adays, the companionship and the nurture engineering science (IT) are critical achi incessantly factors for strategic formulation. Critical achiever factors refer to those managerial and organisational constructs that deprivation to be effectively addressed in direct to further the likelihood of implementation success.Since industry attractiveness views on those factors, strategies and their implementation should be leap out by a set of instructional entropy and a noesis phylogeny passage. friendship is becoming progressively to a greater extent useful because management is picking s into history the order of fancifulness, which en up to(p)s the transformation of one form of friendship to the next. The percept of the existing relationships among several(prenominal) transcriptions elements fartings to in the raw interpretations and this elevater other fellowship take where a tonic descryd value is generated. This relationship indicates that the innovation pathway count ons on the familiarity evolution.On the other hand, every last(predicate) the technologies that are present in the activities of the chain value squander to be articulated and economic aided by an efficient cognition level. approximately of the familiarity involved in the use and improvement of technologies rear end be written down in detail in procedures manuals and use instructions. Others are tacitly transmitted and in condition(p) through concrete acquaintance. Moreover, the success of techno logical modifications exacts to be back up by more(prenominal) than(prenominal) clarified and enhanced experience. With still few exceptions, usefulnessously-nigh hards have had difficulty in fractureing a viable strategic intimacy outline.There are manifold reasons for this, simply certainly a major one is the omnibus nature of the sources required. fellowship whitethorn f every last(predicate) down into the organization in a continuous but unsystematic mien, in all probability because the amount of study processing resources varies by level of management activity. The omit of detail system objectives inevitably led to a data edge of enormous magnitude. It is necessary to consider the structure of such a system and to implement it, in accordance with the organisational snuff its that use data to put on activities and to find.Considering the need to maturation managers concerns, this extend sustains that a set of factors is dramatically useful to justify the relationship amidst innovation process, competitive advanceme nts and a strategic knowledge management (KM). First, it presents a brief review of the relevant writings on the single-valued function of knowledge in the management processes. Second, and in a modelization perspective, we go forth discuss the relationships among these factors to suggest a better way to crapper with human value, to improve KM, and to attain a higher level of strugglencies.Finally, this phrase discusses the implications of KM on innovation and scrap and presents suggestions for future facial expression into. Knowledge an organizational asset What kind of knowledge should organizations develop? Organizations need to use fitted entropy to check the status of business activities as well as to plant informed business closings (Martin et al. , 1998). fit to their tasks, managers mustiness have the tolerable information and the ability to analyze and evaluate utility(a)s in the light of the object sought.This information comes from antithetic famil iar and international sources and their credibility is crucial to provide an adequate knowledge (Joyce, 1993). Managers have to consider that the c slip to valuable human attributes should be developed because they are one of the most alpha assets of many a(prenominal) corporations. To do so, they need to adopt a wise KM philosophy, base on search of information and novel apparent movements. In this philosophy, managers should distinguish among antithetical levels of knowledge. Initially, e genuinelybody depose be aware of several(a) facts and use data coming from those sources.This kernel that knowledge is reduced to a basic level, although to each one individual already has a superior full generalizeing of his/her theatrical role in the organization. In the next phase, knowledge hunt downs to specialization. The knowledge level and the handle of specialization ordain increasingly be taken as standards to measure the companies value of their assets. However, without being stimulated, it whitethorn stay in a static relation deep down functional areas, although tasks are performed in a qualified manner. If management is interested in knowledge cultivation, it is necessary to consider that knowledge actors should be include in a dynamic process.This process demands the support of penury, creativeness and the ability to improve an intelligent and comprehensive vision of the relationship betwixt the organization and its environment. Management should differentiate these levels, because the core of the close-making process could be ill damaged if they were intended as similar. In fact, knowledge histrions (strategists, engineers, technicians, questioners, etc. ) are able to offer insights in what concerns problems and/or overbold situations.In an speeding level they target overly gift drastically to include more evident values into the companionships offering in social club to generate the clients preferences. Knowledge worke rs are the core apt competence of many theaters. In fact, they dominate their expertise fields and, for example, they know how to optimise the systems package that is relevant to strategic closings. Knowledge workers seduce most of the value in slightly industries. The benefits are immediately visible in some advanced(a) industries, such as software, pharmaceutical, health care, financial services, communications, and consulting.That is, knowledge influences competitiveness. At this moment, it is necessary to underline a question derriere knowledge be seen as a specific value for the organization or is management however using the employees brain capacities in a very innocent manner, because they are human resources? In the past, the returns on enthronisation came predominantly from physical assets like physical products and equipment. Today, knowledge is the main source of a nonher shell of assets mental assets. Knowledge levels sight be an asset except if they are e nhanced and efficiently used.Being so, managers must purposely organize, locomote and control the ripening of their knowledge workers. These ones are able to provide raw replys in the complex network of organization-client relationships. Owing to technologies, materials, and competitiveness, several industries acknowledge themselves in complex scenarios. Knowledge is not the solution, but, in the near future, the cerebral big(p) will be required to get along with this complexity, and to support innovation and creativity (Brooking, 1996).Usually and specially in the context of dynamic industries, higher knowledge levels live near a frequent dissatisfaction and the efficiency of questioning what seems to be already understood. The need of search is one of the consequences. In various industries, the search activities stooge fill to spic-and-span-fangled products and to innovative processes. Undoubtedly, the increasing complexity of research militates in favor of formal i nstitutions like universities and government laboratories. Nevertheless, if KM is able to stimulate and support their commitment, individual innovators may have an all-important(a) role in the changing process.Moreover, research activities in the business sector tend to be combined within manufacturing firms (Mowery, 1983) and they arsehole propose incremental innovation. Considering their missions and strategic objectives, organizations have to situate what kind of knowledge will be more important to take care of. Managers should develop the ability to stimulate knowledge workers in order to obtain better effective levels in what concerns the analytic thinking of target markets, technological innovations, and economic trends. Knowledge and information technology entropy and information are used for a variety of purposes in organizations, to wit for improving the possibility of increasing knowledge potential. Some information is plainly data obtained from the database in its initial stage, which is mainly supported by internal documentation and tacit knowledge. Sophisticated or specific information is included in a management information system. Based on various subsystems of information, KM may use many combinings of factors in accordance with the database system and data that are provided by the users (DeSanctis and Gallupe, 1985).In general, firms search for information can be viewed as part of a process, through which an organization adapts to its external environment in order to survive and to plow more competitive. Particularly, organizations look for information roughly specific activities, such as the purchase of natural equipment and launching of new products, to obtain benefits of improved final decisions. Information requirements depend on the nature of each situation and on the need to vocalise competitive strategies (Wetherbe, 1991). varietying effective information systems is a very important challenge that managers are facing today, b ut it is necessary to pay financial aid to the need of comprehensive information systems architecture. A firm and its managers use a variety of approaches to combine, smorgasbord, and process the environmental data to produce timely and relevant information for forming, monitoring, evaluating, and modifying strategy. This variety should throw a high integration level in order to be possible to obtain a strategic information system.Knowledge skippers do have a peremptory role in this integrative task. Summarizing, aggregating, comparing, or combining various sets of data poised in the environment and from competitors and customers produces other information sets, which are used, for example, to measure execution of operator and report on the financial health of the organization. Knowledge workers are a great deal exposed to incomp allowe information on new events and modifications, but they also have the option to search for additional information in order to update their kn owledge levels (Ozanne et al. 1992 Burke, 1990). KM is also a question of heathenish way of operating in the market. To enable this culture to prevail, IT is needed. Nowadays, IT is assuming a decisive role in KM and is one of the most important tools, which is used to decide, to fight competitors, and to catch target markets. In fact, adequate software can capture and distribute to knowledge workers all the useful information the ships company has stored over time. Taking this operation as a facts of life process, knowledge workers can integrate several types of data and try to find new solutions for their problem tasks.This is true because they can use information about clients and competitors, technical databases, decision support systems, management models, successful solutions to competitive situations, and ingress to specialized sources of knowledge. Understanding, interpretation, and the use of IT may enable a possible competitive advantage to be identified and obtained. These three aspects cannot be done without specific and nonionic knowledge of the relationships among hardware, software, processes, and required results. In fact, some equipment converts human command-and-control procedures, but knowledge advances have o be used to optimize this equipment utilization. Knowledge workers have adequate qualifications to communicate the information that is needed. Information share is a very usual practice. However, some of them avoid this communication move, because they are not able to see the organization as a system, where the global objectives should be accepted as a common value. In some organizations, information sharing should be stimulated, because it is one of the most important tools of creativity and, moreover, able assets, unlike physical assets, increase in value with use.Knowledge management some rule of thumbs Management has to analyze in the right time all the environmental elements because they affect the organization performanc e. Managers must intend to come to the outmatch solution by selecting the alternative that best satisfies goal achievement. The main role of environmental analysis is to detect, monitor, and analyze those current and potential trends and events that will create opportunities or threats to the organization.A number of companies have developed effective means of geting about their environments and, most importantly, have implemented strategic decision systems which allow them to expectantize on opportunities and to defend themselves against threats. These analyses and systems are found on IT and KM. KM improves the conditions for strategic action by way of appreciating and treating problems and challenges by the company. Strategically, the success of most management decisions depends also on a competitive effort, which includes a deep knowledge of customers attitudes and an adequate analysis of the stronger competitors (Curren et al. 1992). This means that managers must learn weak nesses, strengths and movements of their direct competitors and how their customers perceive their products. Finally, all these findings should be integrated into a management information system. Managers should become aware that the great challenge is settled on the efforts to innovate, to exploit technological advances, competitors failures, industry opportunities, and the investment in knowledge processes and knowledge workers. In fact, knowledge and knowledge workers can be interpreted as a companys intellectual chief city, and also as a divulge factor to its sustainable development.According to Kao (1996), some companies are already able to carry out internal knowledge audits in order to quantify the innovative effort for competitive advantage. Most of the times, the intellectual capital is not well recognized and remains largely hidden from the view of financial analysts and executives alike. As a consequence, it is undermanaged. This means that its potential is not totally used. Top management should focus their attention on these situations because the intellectual capitals of their companies and innovation infrastructure are one of the real sources of future competitiveness (Leonard-Barton, 1995).It is well known that managers have to face incertainty, that is, they must make decisions under uncertain conditions, often before all the required data are in. Today, managers must be able to embed more knowledge-value in their decisions. Doing so, they will become much more prepared to come out with a new improved and even better alternative before their competitors. Knowledge workers may befriend in these situations. In fact, they are adequately able to deal with information and present hypotheses and proposals. Therefore, they can have an efficient role in the reduction of uncertainty.This point of view demands new directions of KM. To stimulate the development of imaginative skills, management should point out some directions to the most important knowledge workers to be able to define objectives of each task in a systemic network in order to share knowledge and getable information with others to increase the level of individual commitment to be altogether aware of the amount of resources (equipment, software, materials, assistance) that they are going to need and to ask for answers, creativity, and innovative solutions.Management needs to show some interest in the intellectual capital, the crucial importance of creativity, the need to sustain a constant hunt of innovation, and the new concept of cultivation organization. Competitiveness and knowledge management Knowledge and the formulation of competitive strategies The success of a strategy depends also on a co-ordinated resources management. Resources may be divided into two groups physical resources (money, equipment, materials, facilities, and time) and conceptual resources (data, information, and knowledge).Managers have to decide how for sale resources will be distributed throughout their organizations. In fact, the organizational context calls for or demands certain decisions and results. Being a manner of finding a solution for a problem or formulating a strategy to achieve the objectives forwardly defined, every decision should be ground on an integrated set of information the knowledge skills of human resources. In what concerns dynamic organizations, KM is a valuable strategic tool, because it can be a key resource for decision making, mainly for the formulation of alternative strategies.KM should be able to combine innovation efforts, updated IT, and knowledge development in order to achieve a set of capabilities to increase competitiveness. In fact, when this combination is adequately managed, the company can formulate competitive strategies, which integrate innovative products and new technological weapons to face its competitors. Management decision is a very complex process whose evolution integrates several stages. The first ill-use in solving a decision problem is its formulation. In a practical perspective, defining its boundaries and critical components depends on information resources.The analysis of gossip data needs also a complete and updated understanding of several realities and the efficacy to find relationships among them. Further, the decisionmaker is able to predict the outcomes because they result from each available alternative. These stages are always based on data, which need to be organized in order to be useful that is, every management decision must be supported by a set of information because of each situation, the context where it is occurring, and the organization objectives achievement.In a libertine-changing environment, the competitive advantage of many companies is based on the decision to exploit, to develop the queen of knowledge development. That is why some corporations try to provide opportunities for personal and professional development and are seeing that they sho uld stimulate knowledge development to formulate competitive strategies. To find out and exploit opportunities, companies need to establish the main preferences of KM in order to enlarge their growing possibilities based on innovation and competitiveness.Managers know that it can be disastrous to enter or compete in an industry without being aware of changing critical success factors that define their target markets, since they play a significant role in determining the likelihood of implementation success or failure. If a firm is entirely aware of the springy importance of these factors, management decisions have to consider a complex background signal where the knowledge of the clients needs and preferences and the competitors strategies is decisively important.Practically, this means that a market orientation includes the concept of competitive orientation (Slater and Narver, 1994 Day, 1994, 1990). In this context, a company can decide its competitive advantage as a function o f the capability to generate radical change in its processes and technologies and of the flexibility to adapt its resources to the strategic formulation. For example, if an organization decides to become a fast innovator, managers should co-ordinate the ability to formulate a competitive strategy and to work out advantages against competitors.This ability depends on the capacity of speeding up creative operations to generate innovations (Page, 1993). These considerations are already known and well accepted, but we need to extract from them the logical consequences. A competitive decision should be based on a wide and quite firm support, which shall integrate the different relationships among several types of knowledge. As a consequence, a comprehensive knowledge is the vital ground where competitiveness should be built. increase competitiveness using knowledge benefitsAccording to modern approaches, KM is already considered as a key factor in the organizations performance, because it deals with different resources that can aid decision makers in many ways (Keen, 1991). Managers require complete and updated information and, according to their level of activity, they hold to rely on their knowledge workers. Nevertheless, this hope is useless if these experts are not effectively prompt to deepen ceaselessly their levels of knowledge. Some companies know that the innovation effort and the adoption of new procedures and new technologies may increase competitiveness (Goel and Rich, 1997).This relationship seems to have the following reasons the innovators can be inventors if they are able to manage research and development function (Gilbert, 1995) knowledge workers can perceive and deal with what target market accepts or expects as value knowledge development is a fruitful background where incremental innovation may be attempted if a company can use a knowledge-based competitive edge, it is able to defend itself against the self-asserting movements of its comp etitors. The need for scientific and technical information flow within the firm is well signalised.Knowledge and information derived from data are required for competitive initiatives such as improving customer satisfaction, developing new products and markets, and providing double-quick response. The link between knowledge and systemic databases should be understood within the context of information resource management (McFadden and Hoffer, 1994). This means that effective decision making requires a rational selection of inter-related data and the possibility of these data being integrated into KM. This orientation can be applied in the strategic planning area, and it presents flexible capabilities.In fact, managers have the possibility of postulation for more updated information, using pre-programmed models based on the integrative knowledge of previous situations, considering alternative solutions, and stimulating the construction of innovative proposals. A KM can lead manager s to anticipate problems better and to experiment and innovate. Based on a good KM, managers are more able to analyse and evaluate environmental scenarios, and adequate response alternatives in the light of the global objective previously determined (Dutta and King, 1980).At this point, managers can desire to come to the best solution by selecting the alternative that best satisfies the achievement of global objectives. This means that they are deeply concerned with increasing competitiveness. A primary objective of this orientation in modern business organizations is to channel to greater efficiency in achieving organizational objectives. To assure this contribution, researchers should reinforce their efforts to explore the relationship between the competitiveness optimisation and the KM optimisation, and also the effectiveness of a KM, which has not been entirely clarified. variation and knowledge management Can knowledge management support innovation? The innovative efforts in clude the search for, and the discovery, experimentation, and development of new technologies, new products and/or services, new production processes, and new organizational structures. The consequences of these efforts are sometimes seen as a raw material of information industry. advanced management philosophies are aware that information is the result of knowledge evolution and that a solid network between intellectual effort and technological innovations is enlarging.The innovative efforts are also the right consequence of the investment in knowledge and knowledge workers. If KM is positively influenced by the search of innovations, the investments in the development of new knowledge may propel companies into new business in more rewarding markets. To achieve better results, innovative efforts have to be strategically combined with a competitive orientation and its consequent movements. This combination depends vitally on the highest level of individual knowledge and on its tech nological ground.Many companies are taking into account that new technologies and management approaches are changing the handed-down perspective of managing intellectual resources. According to some whole caboodle (Harari, 1994 Nonaka, 1994 West, 1992), the organizations that are able to stimulate and to improve the knowledge of their human capital are much more prepared to face todays rapid changes and to innovate in the domain where they decide to invest and to compete. Managers should recognise that the skills of human resources and the motivation level make possible creative suggestions, different proposals, and research activities to build up innovations.Due to the new insights of KM, a creative knowledge worker can house to face the problems that need new kinds of resolution, the situations that demand innovative approaches, and the relationships that can be discovered in the more and more complex markets where companies are operating. In old times, capital was the company s most critical and scarcest resource and human attributes were used to contribute decisively to obtain the return of the companys investment in equipment and plants.Presently, companies are trying to understand and to use a new logic of value, which is founded on its competencies, customers evaluation criteria, and competition. It should be underlined that the knowledge development in the fields of technological innovations, specialisation on business processes, and innovative products is the strongest source of competencies. Moreover, all competitive efforts, which come from competitors knowledge and innovations, dramatically affect the success of strategies (Gatignon and Robertson, 1993).Innovation should be viewed as a complex process, which involves a set of investment possibilities. In this investment perspective, knowledge has to be considered as a sort of capital. Owing to this reason, its development process is a managerial concern, because it can lead to the launching of a new product. The success of an innovative product is notoriously connected to research activities and changing orientation. On the other hand, these two elements depend on the development of knowledge levels and the innovative efforts of knowledge workers. Knowledge development How to intensify teaching involvementOne of the most important objectives of a competitive KM should be to increase frequently the different levels of knowledge. Increasing them implies to straiten the links among the latest advances of IT and the processes of gathering and process information to displace knowledge development by recognising its importance in companies evolution to promote the acquisition of scientific culture, specially in the fields directly connected with the companys main activities to invest in theoretical courses and practical tuition to intensify an effort to get modify in industry.According to the usual characteristics of all learning and experience curves, the knowledge level may grow exponentially if management is able to stimulate the conditions to learn more and to increase experience. Considering the power of these stimuli, which should be integrated into a global human resources policy, management has to define the adequate procedures to enlarge and to deepen knowledge development. indoors a scenario of competitive imperatives of speed and considering the need to innovate eer, learning will be the essential hedge against the possibility of negative consequences.Organizational learning should be seen as one of the most important responsibilities of top management. In fact, organizations may use the individuals learning activities and learn through them to create an organizational learning system, which provides the possibility of enhancing the capacity to generate new offering proposals (Coopey, 1995 Sinkula, 1994 Senge, 1990). Some authors consider that an organizational learning includes the ability to increase the understanding level from experi ence through analysis of problems, experimentation of solutions, and evaluation of results (McGill and Slocum, 1994 McGill et al. 1992). Organizations development needs to have the support of the positive changes in the education and training of the work force. This means that management should stimulate and organize this changing process. In general, there are two main ways that managers have to consider 1. (1) modify efforts scientific and technological knowledge is almost constantly changing and everybody in the organization should be conscious of the state-of-art of their fields of work 2. 2) knowledge progresses have to be transformed in a more effective effort in order to obtain better production processes and more competitive technological advances. Learning involvement could be defined as a state of energy that a knowledge worker experiences in regard to an effort to increase his/her knowledge level (McQuarrie and Munson, 1987). A knowledge worker who is highly involved in learning is belike to expect more abilities to create and to suggest new ideas. A set of adequate information technologies should be foreseen.In fact, at any time during the learning process, errors or imprecision can occur. To avoid their negative consequences, KM should take into account the reliability of the information sources and also the data accuracy. These factors will affect positively the objectives achievement. Knowledge development as a strategic management instrument If management has a true strategic orientation, the knowledge development is a systematic, integrated, and planned approach to improve the effectiveness of intellectual capital of an endeavour (Edvinsson and Malone, 1998).It is designed to solve problems that adversely affect operating efficiency at all levels. Knowledge is one of the branches where development movements can occur to help managers in their decision-making process, to create new responses, and to enable a set of competitive reactions and /or pro-active proposals. In the last two decades, we have seen a knowledge explosion and a change of the labour force. In fact, knowledge workers are not directly involved in manual activities, but make up a greater pro section of the labour force than ever before.Many companies try to provide an internal environment for experiential learning in which knowledge workers become more and more involved in solving job-related problems. In a quickly changing environment, the organizations flexibility is one of its key success factors. This flexibility should be strategically combined with knowledge workers adaptability and high-quality standards to obtain two types of competition tools 1. (1) sustainable advantages against competitors 2. (2) capability to offer to the target market new alternatives. Knowledge development is a sort of response to changes in the external environment and nternal situations. It can be adapted to solve problems that negatively affect operating efficiency, inc luding the need to replace obsolete products by new ones. In what concerns knowledge development, the improvement of products (incremental innovation) and process innovation (radical innovation) should be integrated. The aim is to improve the horizontal flow of information, because this flow is a very important tool to understand the relationship between the organization, its clients and its competitors. To make better decisions, managers have the option to search for more immaculate information.One of the most important sources is the knowledge development of their collaborators, because they have been adequately trained to find out what are the new advances of science and technology. dressing and motivational measures can be used to supplement professional intellect, but human intellectual capabilities can not be managed as if it was the only goal. In fact, top managers must consider the critical knowledge bases, the intellectual skills, and also the accumulated experience that can be used to increase the organization performance and to support their strategic decisions.Most developments at endeavor level are not possible without changes in education and training of the human resources, namely the intellectual capital. In fact, this capital is focused on innovative effort, on the information about competitors, and on proactive strategic decisions (Prescott and Gibbons, 1993). In many important complex problems there simply are not enough empirical data to provide a basis for complete analysis. Many aspects of a decision process require personal judgement, that is, the presence of updated knowledge workers.The problem-solving capabilities of knowledge workers lie in education background, professional training, creativity, and motivation. Non-routine processes demand for more skilled workers, because innovative solutions should be found and adapted to market needs. Sometimes, an organization needs to assimilate competitors technologies, to imitate them, an d, in a benchmarking perspective, to adapt them in order to obtain specific benefits (reduction of costs, faster capacity to satisfy their market needs). This strategic effort demands a sufficiently caused intellectual capital.In fact, even people with exceptional talent will not be able to develop potential without the adequate motivation (Twining, 1991). Moreover, knowledge development should include an effort to integrate the intellectual power of the organizations human resources. Skills that are integrated according to a systemic perspective are more effective than a set of disconnected and/or uncoordinated talents. The co-ordination of the various abilities and aptitudes may lead to a learning process with a holistic approach.Being so, knowledge workers can learn more, recall information more accurately and use all their resources to build up innovative solutions. Influence of KM on competitiveness and innovation The influence of KM on management decisions effectiveness shou ld be considered to support and also provide insight into how knowledge workers can contribute to obtain better results. However, management must consider that knowledge is not a simple and unique entity. The commitment to generate new discoveries and a more demanding understanding is not enough.The organizations need to look for the knowledge that is able to add value. Value adding knowledge is very different to an information-mix. This mix can be important, but first it is necessary to find out how the markets perceive the presence of value. These considerations can be taken as a guideline for KM. There are perhaps an unlimited number of factors that can define management attitudes regarding the role of intellectual capital into organizations life. Some managers evaluate importantly this capital as a very important resource that should be used to obtain adequate profits.Therefore this capital should be constantly improved. As can be seen in Figure 1, a conceptual model of KM is pr oposed. It emphasises that innovation and competitiveness can be a function of the KM. This model takes into account numerous determinants (determinant factors) of the relationships among various fields. The top portion of the model shows the most common factors that usually define managements attitudes and deals with the following questions How important is intellectual capital? How does management evaluate knowledge development? Is training one of the important aspects to be planned? Is knowledge considered as a strategic tool? Are managers prepared to motivate knowledge development? Are managers able to stimulate the potential capacities of their knowledge workers? KM has to deal with two domains 1. (1) personal characteristics of each knowledge worker 2. (2) factors that affect personal development. The most common factors that affect initially the personal characteristics of a knowledge worker are education level, attitudes and values, innovativeness and creativity (Eagly and C haiken, 1993 Allen et al. 1992 mayonnaise and Marks, 1990 Bearden et al. , 1986 Hirschman, 1980). Innovativeness is an important factor for supporting innovative efforts and it contributes also to define the personality. However, it is not enough to desire new products or new processes. In fact, an innovation that an enterprise presents into the market may be also due to the creativity of its knowledge workers. Personal development is directly related to professional experience. each personal experience may be an information source and a learning situation.As a result from a personal or a managerial decision, training courses may contribute to reawaken previously acquired knowledge and to facilitate the access to a higher knowledge level. The development of each knowledge worker has its own dynamics, which is related with personal objectives. The more demanding the objectives are the more the learning efforts should be intensified. Nowadays, learning processes and knowledge updatin g procedures depend on information technology. Moreover, it has a decisive role on knowledge development because competitive advantage can only be maintained by the use of information for innovation (Huffman et al. 1990). Nowadays, managers have to decide whether they want to obtain better results from their knowledge workers or they prefer to lose the creative power that they possess in their minds and their professional experience. Managers attention must be focused on personal development. To obtain an effective knowledge level, investment in knowledge development is needed. Managers should improve their ability to motivate knowledge workers to attain higher knowledge levels, because the arousal of this set of intellectual needs may be caused by external stimuli.Motivations should be intensified, because they should impel knowledge workers to increase their knowledge levels. This movement will be decisive in terms of innovation and can contribute to a stronger competitiveness. p ull down when no innovation is possible, an improved knowledge of the market and competitors can lead to more competitive movements. The technical capacities of a modern information technology will help this motivational scheme. Companies have to find ways to reach knowledge workers involvement. A persons level of involvement plays a role in how much effort is used to learn new subjects or to deepen knowledge.Moreover, this involvement is an adequate condition for information sharing among knowledge workers. Adding IT, creativity and knowledge leads to a particularly potent combination. Managers can obtain impressive results in what concerns the companies abilities to innovate if they are able to develop the stimulation of innovative proposals through motivational methods and adequate rewards. The same can be said in what concerns key success factors managers should practice frequently the stimulation of competitive efforts, provided through utilisation of both existing and new tech nologies.This conceptual model intends to interpret the relationship between KM, innovation, and competitiveness. It may contribute to an integrated understanding of the knowledge development process and its influences into the domains where management efforts should be focused. Conclusions This article intends to provide insights to a better understanding of KM in what concerns the possibility of influencing innovation and competitiveness. Its considerations provide considerable support for the importance of knowledge workers as a decisive contribution to the strategic enhancement.The implications for managers have been underlined. Regarding these implications, some concluding remarks can be made define methods for measuring the course of KM effectiveness develop effective strategies for integrating innovative efforts, professional experience, skills, interactive capacities to create value for a companys competitiveness determine the means to capture, transfer and leverage knowled ge effectively let KM enter into strategic decisions concerning the profitability of intellectual assets.The suggested model also enables us to extend some of the frameworks for understanding managers evaluation criteria. This extension to traditional models of management strategic decisions is a direct result of the informational complexities in modern organizations. Consequently, these considerations intend to represent an important step forward in unravelling the KM as an efficient support for innovation and competitiveness relationships. Directions for further research Deepening the analysis of managers interest on knowledge is critical to understand how KM can contribute to improve strategies formulation.Future research should examine the differences among industries, and measure accurately the relative importance of the factors that affect personal characteristics and knowledge development. Because these relations are not fully investigated, we suggest additional studies conce rning the industries where knowledge workers have a more defined and important role. Future research on managers attitudes facing the linkages between strategic management and human value may have to examine carefully the role of a KM orientation as an effort to support adequately successful strategies.This interchange contributes to a better understanding of the consequences of a management orientation, which is able to leverage knowledge advances. 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