Relating Knowledge Management to Business Strategy by means of an Activity Theory Framework

Knowledge Management is an emerging term currently used in organisations which recognise the need to make more effective use of their human and IT resources. The relationship, between the strategic direction of a business and its strategic approach to knowledge management, assumes that there exists collective organisational knowledge that can be managed to encourage the realisation of business goals. Knowledge in organisations can reside at four levels: the individual, the group, the organisation and the inter-organisational domain (McAdam & McCreedy 1999). While it is important to consider knowledge residing at all four levels, in this paper the emphasis will be at the organisational level. The strategic approach to organisational knowledge management will no doubt include the management of knowledge at the levels of individuals and groups within the organisation, as well as knowledge, which crossed the organisational boundary from customers, suppliers and competitors. However, as business strategy is usual driven from the senior organisational executive, this paper will focus on knowledge from a strategic organisational perspective.