Knowledge Is Power

1 January 2017

The claim of “Knowledge is power”, made by Francis Bacon, has been universally well known. Originally, it was proposed to stress the importance of knowledge in science and an academic spirit because human were experiencing a major scientific revolution at that time and information technology is not as developed as now to spread knowledge. Now it has been recognised by a much wider range of fields.

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An interesting question is what the implication of this claim is in business, especially in an era quite different from Bacon’s time and a world featured with globalisation and knowledge revolution (Alvesson and Karreman, 2001). The advanced technology today not only changes the way of conducting business and facilitates the communication inside and outside the company, but also become a rising industry itself. Possession of physical property and capital is no longer the major source of sustainable competitive advantage but replaced by efficient information flow and intellectual (Mundra, Gulati & Vashisth, 2011).

Realizing the importance of knowledge in business, massive investment has been dedicated to knowledge management, aiming to fully utilize the power of knowledge. From both academic field and practical business world, there is a general belief that the time of knowledge has come and knowledge is at the centre of business strategy making and operations (Davenport et al. , 1998). Many academic researchers and business practitioners have done a lot of work investigating how to utilize knowledge for business success.

But few of them really considered to what extent Bacon’s claim hold true for individual and organisation respectively at first hand and whether there is any limitation. To fill up this gap, this paper is dedicated to critically evaluate Bacon’s claim, “knowledge is power”, in business context and the impacts of knowledge when it is employed as source of power. In order to achieve that purpose, this paper is developed in to following parts.

In the first section, definition and nature of knowledge and power in business context will be given based on relevant literatures, before critically discussing the interrelationship between knowledge and power at two levels, individual and organisation, by using examples to illustrate what power and limitation knowledge brings. The second section will explore the impacts of adopting knowledge as power source by individual and organisation. Finally, conclusion and suggestion for the future will be provided in the third part. 2. Evaluation of relationship between knowledge and power.

Basic conception of knowledge Before exploring the relationship between knowledge and power in business context, it is necessary to investigate the definitions of the two. At first, knowledge will be discussed in terms of definition, typology, generation process and dynamic nature based on relevant literatures. The conception of knowledge is quite an extensive and general one. Many attempts have been made to define knowledge but none of them has gained universal acceptance and the only thing the literatures have reached agreement on so far is that knowledge is a vague and confusing conception.

Alvesson and Karreman (2001) argued that knowledge is an intangible and subjective. While McGrath (2000) emphasized the vagueness as one of natures of knowledge because knowledge takes on many different forms and can be reflected in a variety of ways and when knowledge covers everything, then it is almost as meaningless as nothing. Also, knowledge is hard to be quantified. Most of time we are not aware of what we really know until we are faced with a problem to be solved or a question to be answered and that is when we bring our knowledge out of our sub-conscious level (McDermott, 1999).

Since the purpose of this paper is to critical evaluate the notion of “knowledge is power” and analyse the impacts of knowledge power in business context, not to develop a deep philosophy discussion, a business perspective definition given by two prominent scholars in knowledge management field, Nonaka and Nishiguchi (2001), is adopted and knowledge is defined as an intangible resource including expertise, innovative ideas and skills. In order to better understand the conception of knowledge, it is also vital to distinguish knowledge from other similar conceptions.

As mentioned above, there are too many aspects can be covered by knowledge and it is not surprising to find conceptions like data, information and wisdom have been frequently used interchangeably across academic journals and business practice. But they are different conceptions. Davenport and Prusak (1998) defined data as simple description of reality, information as data with purpose behind and knowledge as the idea that formed in minds after gaining information.

To better illustrate the relationship among these conceptions, Skyrme and Amidon (1997) proposed a diagram known as “the Pyramid of Knowledge” (see figure 1). This distinction made here has significant implication in practice. Modern technology makes it possible for business to have access to tons of information instantly, but it does not necessarily mean they can gain knowledge that way. As Davenport and Prusak (1998) defined, knowledge is different from information as it does not only include the contents of information but also embody perception and judgement of people.

At the end of day, it depends on the person who has received the information to come up with any knowledge from it. Therefore, people factor plays a key part in forming knowledge. [pic] (adopted from: Skyrme & Amidon, 1997) Within the conception of knowledge itself, there are also further category typologies. Starbuck (1992) divided knowledge into esoteric and common knowledge, depending on how precious the knowledge is. Starbuck’s view has emphasized on the power of knowledge from a competitive advantage perspective as it is the rare and esoteric knowledge that adds on the competitiveness.

However, it has been criticized as the classification is not “neat” enough (Karreman, 2010). Now the dominant classification seems to be the theory proposed by Polanyi (1966) and further developed by many scholars (Duguid, 2005; McAdam et al. ,2007; Yang, 2009), where knowledge is composed of tacit knowledge and explicit knowledge. Explicit knowledge refers to the knowledge that can be easily expressed and passed on while tacit knowledge represents the other side of the spectrum, which is more embodied in personal intuition and insights.

In the business context, explicit knowledge exists in documents and database while tacit knowledge often resides within the minds of employees. Some scholars argued there is a third type of knowledge which is cultural knowledge (J. -C. , S 1996) that is shared within the members of organization. Actually, this kind of knowledge can be seen as part of explicit knowledge which resides in not just one individual member but all members. After all, organizational knowledge derives from individual knowledge (Alvesson & Karreman, 2001).

However, it is worth noticing that even though knowledge is divided into tacit and explicit types, they are integrated, interdependent and possible to be transformed into each other to some certain degree, in the process of knowledge generation. Again, the theory of knowledge generation proposed by Nonaka and Nishiguchi (2001) will be adopted here as their theory is based in organisation context and has been widely accepted by literatures. They identified two dimensions in the process of knowledge generation, epistemological and ontological (Nonaka and Nishiguchi, 2001).

Tacit and explicit sit at the two ends on epistemological dimension while on ontological dimension, knowledge ranges from individual level to organisational level. The process of knowledge creation (as shown in figure 2) is a spiral composed of four types of conversion where one type of knowledge could be transformed into another in the process. The first mode is socialization, where tacit knowledge is passed on from individual to another individual. This conversion usually takes place at micro level, such as informal chatting between working staff or between salesman and customer.

Externalization refers to the process where tacit knowledge is made explicit. A scholar summarises his or her knowledge and article that knowledge by putting it into words and publishing books is a typical example of externalization. Combination refers to the process of transferring explicit knowledge across the organisation. This is usually where the technology comes into play as information technology can make the dissemination of knowledge much more convenient and accessible.

Internalisation mirrors externalization as it goes the other way around. It is a process where individuals learn from explicit knowledge and extract useful information and combine it with his or her interpretation and form new tacit knowledge applicable to reality. New employees learning business operations during their introduction or from database would be a case in point. It should be noted that the entire process of knowledge generation a spiral one, because the understanding gets deeper with every conversion.

This has significant meaning as it recognises the dynamic nature of knowledge. A common mistake is to presume that whatever is written down on a text book is knowledge and holds true forever. For example, there are nine planets in solar system used to be deemed as common sense, however now it become wrong according to latest finding. Therefore, not only knowledge is being used to change and improve the ways of doing things, but also knowledge itself is changing. Figure 2: knowledge generation spiral [pic] (source: Nonaka and Nishiguchi, 2001)

To summarise, despite numerous attempts have been made to clarify the conception, knowledge remains to be a problematic, vague and dynamic entity, implying the complexity and difficulties of analysing “knowledge is power”. 2. Knowledge and power at organizational level Similar to the situation of knowledge, power is also a subjective matter that covers a quite wide and vague range. After integrating many literature views on power, Hunt and Nevin (1974) define power as “the ability of one individual or group to control or influence the behaviour of another”.

This definition suggested that the execution or practice of power is reflected in the form of “influence over others” and the actor or practitioner of power is either “group” or “individual”. Therefore, it is reasonable that in the following paper, the relationship between power and knowledge will be discussed at two levels, organisational level and individual level, accordingly. Before we critically analyse “knowledge is power”, it is worth noticing that knowledge alone does not bring power. Only when the knowledge is expressed and certain actions have been carried out into the reality might it bring power.

So the accurate way to put it is “the expression of knowledge is power”. The reason why Bacon’s claim became popular anyway is that when we read the sentence, it has been automatically corrected by ourselves and perceived as “the expression of knowledge is power” in our minds without being noticed. But in order to be a rigorous analysis, it is worth making this distinction at first. Although the definition given by Hunt and Nevin (1974) was developed from a social perspective, it can be extended to business organisation in the form of “bargaining power”.

Because a company with bargaining power means it has more influence over the result of negotiation with suppliers and buyers (Porter, 1996) and the effects of bargaining power fits the definition of power proposed by Hunt and Nevin. Usually, bargaining power comes from competitive advantage as products or service of a company with competitive advantages will be more attractive to customers and competitors would find more challenging to compete with this company.

Porter (1996) argued that competitive advantage can be achieved through either added value from innovation or lower cost from improved efficiency. This is where knowledge comes into play. For organisation, knowledge is being used in every daily operation of business, ranging from product or service design to communication among the staff as well as with consumers in order to improve efficiency or promote innovation (Alvesson & Karreman, 2011). Yet, no matter which way knowledge benefit the company, the ultimate result is enhanced competitiveness. This is how knowledge becomes power for organisation.

A typical example of this would be the story of Toilet Wand, a new product design that became a success in the market because of knowledge utilization. Clorox is an experienced toilet product producer. With the knowledge of traditional function of a normal toilet brush and innovative ideas, Clorox designed a new tool that can not only have the features of a normal toilet brush, but also make the removal of dirty part cleaner and easier. The innovative design of this product resulted in a competitive advantage for the company and innovation comes from tacit knowledge.

In business context, tacit knowledge seems more important than explicit knowledge as tacit knowledge is difficult to be copied by competitors and therefore compromising a sustainable competitive advantage according to Barney’s (1991) resource based view. Even though the R&D staff from other companies may have received same amount of explicit knowledge from school, but it is the tacit knowledge of the R&D staff from Clorox that give birth to that innovative design and this tacit knowledge resides in the heard of the R&D staff at Clorox particularly.

Therefore, knowledge, especially tacit knowledge, can bring company power. But it should be noted that knowledge is not the only source of power for organisation. Barney (1991) argued that resources with features of being rare, valuable, inimitable and non-substitute can be regarded as competitive advantages possessed by the organisation. Besides knowledge, there are many factors that meet those valuable resource standards, such as financial capability, reputation and network with local government or supplier. Sometimes knowledge itself is insufficient to bring power.

For example, many SMEs got brilliant business ideas but not all of them can become powerful competitors in the industry due to insufficient fund (Berger & Schaeck, 2011). So knowledge can be power for organisation but it should not be deemed as the only source. There are also situations when knowledge fails to delivery power at organisational level. Sometimes it can even damage the bargaining power of a company. Alvesson and Karreman (2011) argued that knowledge sometimes could result in problems through enforcing guidance or norms onto situations in reality.

Some scholars pointed out that current knowledge could be the biggest barrier for innovation and exploring new opportunity (Davenport et al. , 1998). For example, once a business practice achieved success, the company will try to document that as a success case study and spread the knowledge extracted from the case across the company. Problem occurs when another department try to implement that case study into a totally different environment but only got stuck. Useful knowledge is valid to some specific situation. When the situation is different, applying the same knowledge could be inappropriate and doomed to fail.

Besides the differences among situations, knowledge itself is updating and changing as well due to the dynamic nature of knowledge as discussed above. Therefore, “knowledge is power” holds true at organisational level only when the knowledge is the “right” knowledge and applied to a suitable situation. But this is far from the end of story. The question of “what right knowledge is on earth” just makes this issue more complicated. As what has been discussed in previous section, what kind of knowledge drawn from information is up to people who receive it and people can be bias, subjective and emotional.

Our judgement can be influenced by our experience and character (Teuscher, 2009). Exposed to same information, people may still come up different even contradictory knowledge. For example, in my research on knowledge and power, one view is that company should appoint a knowledge-officer to implement knowledge management scheme (Ear & Scott, 1999) while other debates that a specific appointment of knowledge officer is not necessary to establish knowledge management and it causes extra cost (Wong & Aspinwall, 2005).

Both of arguments are correct to some degree. The author of first view has a lot of experience in large organisations while the author of second view comes from SME background and their arguments are correct to their situations respectively. Besides the people factor, the source of information could be another issue for reaching the “right” knowledge. It is true that there is tons of information available for modern business thanks to internet. But there is false information as well, which could lead to wrong knowledge.

Separating the true information from the false one may require software support and even more knowledge, thus starting a new cycle on its own. Having the right knowledge is still not enough to guarantee it can be turned into power as there is also issue of way of expressing that right knowledge. As mentioned in the beginning, for knowledge to take any effect it needs to be applied into reality at first place and different ways of expressing the same knowledge could lead to different effects (Quinlan, 1987).

For instance, mentor and training scheme is often introduced by the company in order to improve the capability of its staff and achieve competitive advantage. This intention of training illustrate that the company has a sound recognition of training and human resource management, which is the right knowledge. However, the training scheme may suffer a low response from employees if not introduced correctly. When being offered a training session, employees could perceive this offer as an indication that they are not capable of doing their job and therefore they need extra training.

The perception leads to a negative attitude at the first impression. To avoid this, the company could stress the purpose of training is to equip them with more transferable skills so that they can be competent to take on more challenging work. In this way, the knowledge delivered through training remains same but it would be more likely to be accepted by employees as the way of expressing the idea sounds more constructive and positive.

Therefore, to conclude, for knowledge to become power for organisation, it requires the right people drawing right knowledge from right source of information and applying it to right situation, in a right way. It is difficult and complicated to achieve each of those preconditions. 3. Knowledge and power at individual level At individual level, it is more natural to define the conception of power as a social conception because the major concern of individual is much more closely associated with interrelationships with other individuals or groups rather than the competitive advantage of the entire organisation (Gioia & Sims, 1983).

Based on the nature of strength, range and interrelation between different parties, French and Raven introduced a framework of five forms of power in 1959, including reward power, coercive power, legitimate power, referent power and expert power. Their theory has been supported by many empirical studies and regarded as most popular framework in this field by current literature (Hinkin & Schriesheim, 1989; Elangovan & Xie, 1999). Therefore, French and Raven’s (1959) five forms of power framework will be applied to analyse the relationship of knowledge and power at individual level.

Reward power refers to the ability to reward and a typical example of this would be piece-work rate based employment where payment is contingent on the number of products finished by the employee (French & Raven, 1959). Coercive power means the ability to punish for non-conformity performance (ibid). An extreme example of this is when people could get fired by the company for their poor performance. Legitimate power is authorised by widely accepted values or authority.

Referent power draws fellowship from others because of attractive personal characteristic. Expert power is the power gained via possessing knowledge or information that others do not possess. Legal advice from lawyer is an easy example to exert expert influence. It should be noted that this classification of power forms is subjective perception, as French and Raven admitted. They suggest that it is up to the perception of the particular party in that particular situation whereas confusion in terms of these forms occurs.

Knowledge can be directly linked to most of these forms of power, especially expert power, as it has been specified in the definition. French and Raven (1959) warned that abuse of reward and coercive power could lead to the loss of power. Therefore, having the right knowledge of usage of those powers would definitely help maintain and strengthen that power. According to the definition, referent power requires impression management and interpersonal skills so having right knowledge on psychology would help the execution of that power.

However having right knowledge cannot guarantee referent power can be successfully carried out at individual level either. Characteristic is rooted within ourselves as part of our identity, which cannot be learnt no matter how much knowledge we have. Although whether leaders are born or made is still a heated discussion going on in the literature world (Henrikson, 2006). At least the real world could prove how far knowledge can lead to referent power because successful leaders may not have as much interpersonal skills and psychology knowledge as psychologist and socialist ut that does not change the fact that they can attract people to follow them and that not all knowledgeable socialist and psychologist necessarily make successful leaders.

Besides, knowledge can also be indirectly associated with legitimate power. For instance, having the right knowledge may lead to strength in other forms of power, which may in turn make the person draw the attention of authority and be appointed to a higher position with legitimate power. In this case, knowledge does not lead to legitimate power directly but has an influence on the result of gaining that legitimate power.

This is the impact of knowledge, which will be discussed further in detail in the following section. Similar to the analysis at organisational level, the precondition of “right knowledge” and “right situation” also applies at individual level for “knowledge is power” to be true. For example, a good understanding of successful western style leadership may no longer be useful in eastern world as what is perceived as successful does not necessarily mean power at individual level. In addition, different knowledge would unleash corresponding power.

A training consultant hired by a company has expert knowledge in terms of training, but this does not mean this consultant more powerful than the boss of the company because expert knowledge brings expert power, not legitimate power, at least not directly. It is worth mentioning that sometimes the power of knowledge at individual level and organisational level can be positively related. Using the example before, having brilliant employees at D&R department means the company can utilize their knowledge as valuable resource which would strengthen the competitive advantage of the company through innovation.

At the same time, the individuals at D&R department are using their knowledge to execute their expert power. Nevertheless, the execution of knowledge power may cause conflict from the two parties sometimes. When company tries to encourage their employee to share their knowledge with new comers to improve workforce capacity, it also threats the expert power of individual as expert knowledge is built upon its rareness. This conflict leads us to the next topic, the impact of knowledge when it is adopted as source of power. 3.

Impact of knowledge when it is adopted as power source 3. 1 Impact of knowledge power at organisational level Previous discussion has shown that knowledge holds great power only when the right knowledge is used in the right way. Therefore, at organisational level, taking advantage of knowledge’s power calls for a framework that allows companies to fully utilize their knowledge resource. In the business world, the most common framework chased by organisation managers is known as knowledge management. Literature has provided a range of definitions of knowledge management.

According to Ruggles (1998, p80), knowledge management is “a term which has now come to be used to describe any-thing from organizational learning to database management tools”. While Mundra et al. (2011) defined it as a series of practices that enables knowledge to be created, passed on and spread over the entire company. McInerney and LeFevre (2000) argued that knowledge management is a technology platform through which the external and internal information of organisation could be mixed and transformed into “actionable knowledge”.

Some regard it equal to information management (Brown and Duguid, 1998, p. 103), while others recognise it as a community building process (vonKrogh, 1998). Summarising the features shared among those definitions, this paper defines knowledge management as “a process of linking right knowledge to right people and passing knowledge from people to people to improve work efficiency”. The two major aspects of knowledge management, linking knowledge to people and sharing knowledge among people, will be analysed respectively in terms of its impacts in the following paragraphs.

In order to link the right knowledge to people when they need it, knowledge management usually involves of establishing a database of knowledge to facilitate this internalisation process. Employees can have easy access to the database. To elaborate the positive impact of using database as knowledge management practice, the successful use of K-Commerce support by Interpolis, a Dutch insurance business, will be used here.

As one of leading insurance businesses in Holland, Interpolis offers a wide range of insurance products for millions of customers and used to spend a considerable time and investment into their staff training in the call centre (Mundra, Gulati & Vashisth, 2011). Still, call agents there struggled in dealing with some tough questions from clients (ibid). Later on, Interpolis introduced K-Commerce as part of its knowledge management scheme, aiming to enable its staff to have instant access to a knowledge base where they can easily find correct answers to most kinds of questions (ibid).

With the support of K-Commerce as an expert 24/7 available, its call centre agents now can provide satisfying and consistent service in advising their customers. As a result, the cost of setting up such database was lower than training cost but achieved better effect and the feedback from customers was improved. Therefore, this case study illustrated what positive impacts are achieved through this knowledge management practice. Knowledge management also encourage knowledge sharing among people so the right knowledge can be passed on and disseminated across the company.

Valuable knowledge is usually tacit knowledge within the head of knower and once the employee leaves the company, the valuable knowledge resource is gone as well. Building up a knowledge-sharing community to facilitate knowledge socialization can not only avoid the loss of valuable knowledge resource, but also leads to other positive impacts such as improved performance, better motivation, loyalty and lower turnover rate. (Haas & Hansen, 2007). In the practise of knowledge management, one of the most successful models would be the World Bank (Leavitt, 2003).

To support its fight against world poverty, World Bank initialled a Knowledge Sharing Program in 1996, which includes practices like establishment of an online knowledge sharing database and making “story telling” videos to externalize tacit knowledge (ibid). Feedback from internal and external sources have shown significant improvements in responding speed, quality of service, innovation and staff commitment (ibid). This case study has illustrated what the positive impacts are when employing knowledge as source of power via knowledge management programme. 3. 2 Impact of knowledge power at organisational level

Despite these positive impacts for organisation, practice like knowledge sharing programme could have negative impacts for individual. Studies found that employees with valued knowledge worry that once their knowledge is shared, they would lose their expert power and lose their value in the company and finally, their jobs (Javernick-Will, 2012). Therefore they may show resistance towards knowledge-sharing scheme to protect their expert powers, which could lead to negative impact on the organisation since the positive effects cannot be achieved without cooperation from individual employee.

However, despite this negative impact of knowledge sharing upon individual in short term, there are also positive impacts as well in the long term. Firstly, people can get a feeling of fulfilment by helping others. When they share their knowledge with others, they know they are needed and valued. Actually, some people enjoy this feeling so much that this altruistic behaviour is more likely to be an egoistic activity for them (Calder and Staw 1975). In this case, some certain people actually can enjoy the positive impact from knowledge sharing much more than others.

Secondly, individual could benefit from organisation’s success. Many companies have established a rewarding system where part of bonus is associated with overall performance of the company (Javernick-Will, 2012). So when the entire business is developing well due to competitive advantage gained by knowledge sharing, more promotion opportunities and pay raise are more likely to take place. Finally, in this indirect way, individuals will benefit as well. Lastly, as in the case of the World Bank, enforcing a knowledge sharing scheme would help establish a knowledge sharing culture and friendly working environment.

Studies suggested that with a knowledge sharing culture in place, social needs would make people feel obliged to join this cause and trust the team would give return the favour somewhere in the future (Alvesson and Karreman, 2001;Javernick-Will, 2012). In summary, when knowledge is adopted as the source of power, the impacts are mixed results. Whether it is positive or negative depends on which perspective is used, long term or short term, individual or organisation.

When designing knowledge management scheme, managers are suggested to be aware of these impacts for organisation and individual respectively, especially when they conflict with each other, as failing to deal with one them would ultimately lead to negative impact on the other one. 4. Conclusion There is no simple answer to whether Bacon’s claim, “knowledge is power”, is right or wrong in business context. Firstly, because the conception of knowledge and power themselves are problematic and vague.

After summarising a range of views from literature, business-context definitions were given and the discussion of the relationship between knowledge and power was developed at two levels, organisation and individual, in this paper. Through analysis of current arguments and empirical study cases, it has been found that for “knowledge is power” to be true at organisational level, the knowledge needs to be expressed at the first hand. Then, there are several certain preconditions required to be in place, including “right knowledge”, “right people”, “right situation to apply” and “right way to express the knowledge”.

Similar rules apply at individual level as well. Meanwhile, it should be noted that having those preconditions ready still can not guarantee the realization of knowledge power. The paper also found the link between the executions of knowledge power from these two levels can not only be positively interrelated, but also conflict with each other sometimes, which means the impacts of knowledge when it is adopted as source of power are mixed and complex. At last, it is suggested that business practitioners should be aware of impacts of both individual and organisation, in long-term or short-term.

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