Strategic ManagementKnowledge Base Economy:

The 21st century has several challenges. It has seen new trends on National and International levels due to globalization. The dynamic direction in todays world is Knowledge Based Economy. A knowledge-based economy relies on the use of ideas rather than physical abilities and on the application of technology rather than the exploitation of cheap labor. It is an economy in which knowledge is created, acquired, transmitted, and used more effectively by individuals, companies, and communities to promote economic and social development.

Today in industrial countries, knowledge-based industries are expanding rapidly where new technologies have been introduced, demand for high-skilled workers, particularly in information technology workers has increased significantly but at the same time, demand for lower-skilled workers has declined and this put a lot of pressure on the current education system of industrial countries to produce more high skilled people. In these days knowledge is very important from top to the bottom level.Knowledge base can help to in developing excellent strategies which can in turn results in improving business and can lay foundation for good governance in general and excellent corporate governance in particular.

A confident march towards Knowledge Base Economy (KBE) requires the implementation of some model. First model in this context is KASH model and second is SAVE model. Both are self development models. Firms use this model for employees development which in return enables organizations to walk towards KBE.KASH Model

KKnowledge

AAttitude

SSkills

HHabits

KASH model states that there are four things which have to be right if human performance is going to be most favorable. In order to understand this model each alphabet is needed to study independently because each word has significant importance. KnowledgeKnowledge is a familiarity with someone or something, which can include facts, information, descriptions, or skills acquired through experience or education. Knowledge is what you know. It can be found in two places. First it in the mind and second more important aspect in todays world is Where it is? Anyone can access knowledge from internet, files, dictionaries, books etc.In order to strengthen the memory of mind, one should concentrate on three Rs (1) Receipt (Deposit of knowledge in the mind). (2) Retention (Retaining knowledge in the mind). (3) Retrieval (Call for the knowledge when there is a need to use it). Traditionally there are three sources of knowledge that are:(1) Hereditary:

This knowledge is God gifted at the time of birth. It is generally believed that with the exception of a very few under-privileged children, all other persons are gifted with good knowledge by God.(2) Revealed:

God has revealed four books namely: Torah, Bible, Psalms and Al-Quran. All these books contain excellent knowledge which can decorate all readers. The last book is Al-Quran.(3) Acquired:Knowledge is also required through education and training. The greater the investment in the education, the higher would be the knowledge base. Developing countries have invested huge money in the education. Enlighten corporate sector has invested a significant amount in order to train their employees through management training programs. Consequently human resource development is assuming high importance. However it is generally believed that fourth dimension of the knowledge is crying need of today namely: Innovative Knowledge. Several inventions have taken place now and several great initiatives have been under taken. However enterprise in this world will be great beneficiaries. It is important to not only invest in developing people but also in R&D institutions.In order to get benefit from knowledge, knowledge management should be operationalized in the real world. Knowledge Management ('KM') comprises a range of practices used by organizations to identify, create, represent, and distribute an organization's knowledge to enhance its performance, continuous improvement and competitiveness. The process of knowledge management is: Acquire

Manage

ApplyKnowledge management is applied at three levels. These are individual level, organizational level and national level. Well accepted approach of the knowledge management includes changes in the mindset of the people and delivering better than the best. Target of the knowledge is to create world class organizations in productivity and standards. KM scope extends to high tech, agriculture and traditional jobs. Its basic is to shift from Business as usual to Knowledge Base Economy (KBE). Strategically speaking, KBE has shifting paradigms in the world. These changing paradigms have taken place in three dimensions:

(1) Earlier growth was resources base namely: Land, labor, capital and enterprise. There was emphasis on growth of agriculture.(2) Later the paradigms shifted to industry with emphasis on innovations and inventions.(3) Now the emphasis on intellectual capital (Collective knowledge (whether or not documented) of the individuals in an organization or society. It includes customer capital, human capital, intellectual property, and structural capital). Now a days 70% results are achieved by the use of intellectual property, knowledge and innovation. And remaining 30% results are achieved by labor and other factors.Three types of technologies are used in developing knowledge management systems these include:a) Communication Technologies:Emails, Internet, Corporate Intranets and other web base tools provide communication capabilities.b) Collaboration Technologies:Electronic brainstorming enhances group workers especially for knowledge contribution. Experts can also work with individuals for trying to apply knowledge.c) Search and Retrieval Technologies:

Database Management Systems are used to store and manage knowledge. Knowledge Base:The term knowledge base refers to a database in which information is collected, organized, shared, searched and used. Knowledge bases are intended to act as a resource for the reader, such as a customer or a customer service representative. A sound knowledge base for the enterprise is cry need of the hour. Knowledge should be developed in a comprehensive manner. Some of the important component in this respect may include the following: Information ( About industry and technology)

Companys policies and practices

Companys goals and plans

Company culture

The personality of key organization members

Important suppliers and customers

AttitudesAn attitude is an expression of favor or disfavor toward a person, place, thing, or event. Generally three types of attitude exist in the society namely: Pessimistic (expecting the worst possible outcome, feeling negative for everything), Optimistic (Hopeful and confident about the future, positive thinking) and realistic (showing awareness and acceptance of reality). Attitude is the most important aspect of an individual personality. Attitude should be: Constructive

Positive

Future Oriented

SkillsSkills are the abilities or expertise of doing work. As the technology change skills also change paradigms. Internet economy and fast changing world has to be cushioned with continuous improvement of skills if we fail obsolescence will occur. The law of obsolescence is not restricted to the machines but also applicable to the persons. In spite of obtaining Ph.D. or M.Phil or Master degree or other profession qualifications like engineering, medicines, architecture, business etc there is a continuous need for updating skills. There is a long list of skills which are needed to be acquired and continuously updated. Effective business executives needed these skills for effective business strategies. These include:1. Analytical skills (Ability to identify and analyze complex problems and concepts and make decisions that make sense)2. Communication skills (Ability to convey information to another effectively and efficiently)3. Finance skills (Ability to acquire and manage the finance of the company)4. Business skills (Ability for doing general business and knowledge of economic Principles )5. Technological skills (Ability to apply the practical science to the industry and commerce)6. Sociological skills (Ability to monitor social environment and their impact on the business operation )Habits

Habits are pattern of behavior that often occurs automatically. It is generally the outcome of the attitudes. Their contributions will increase the productivity of the enterprise and KBE can be very helpful. These are cultivated at home, learnt through interaction with the society and embedded as part of the corporate culture through organizational efforts.Second model which we need to follow for marching toward KBE is SAVE model. It is second self development Model. SAVE ModelSSkills

AAttitude

VValues

EEthics

Skills and attitude have been discussed earlier. Values and Ethics are here under.ValuesEach human being possesses his own unique set of values. Values are what people consider important. They are the basic beliefs that an individual thinks to be true. A bridge by which an individual makes a decision regarding good and bad, right or wrong, and most important or less important. Values are very much personal. There are two types of values. Western Values and Islamic Values. In Pakistan, Islamic Values are followed. Islamic values are based on revelation (Wahi) by God in Al-Quran. These values are summed up belowActs to be performed:1. Allah commands justice

2. Doing of good

3. Liberty to Kith and Kin (Dost, Ahbab, Risht-e-Dar)

Acts not to be performed:God Forbids:1. Shameful deeds

2. Injustice

3. Rebellions

Ethics

Ethics generally refers principles that govern a persons behavior. When ethic is applied on business it is called business ethics which are principles or code of conduct within the organization that guides decision making and behavior. It is important to follow ethics in business by trade bodies. Managers should implement ethical standards to ensure fairness in the business. Developing code of ethics and adhering to it is the prerequisite for ensuring social responsibility. In recent times, it has been generally felt that over and above the focus on profitability and social viewpoint, developing attitude for discharging responsibilities honestly by a manager is very important.Code of ethics is generally issued by organizations and professional institutions. These need to be carefully read and implemented. Institutional arrangements are contained in the code of ethics for punishing those who do not follow the spirit of code of ethicsForecasting:Forecasts are educated assumptions about future trends and events. Forecasting is a complex activity because of factors such as technological innovation, cultural changes, new products, and improved services, stronger competitors, changing social values, unstable economic conditions, and unforeseen events. Environmental scanning provides reasonably hard data on the present situation and current trends, but intuition and luck are needed to accurately predict whether these trends will continue. The resulting forecasts are, however, usually based on a set of assumptions that may or may not be valid. Faulty underlying assumptions are the most frequent cause of forecasting errors.Forecasting Techniques:Various quantitative and statistical techniques are used to forecast future situations. They do not tell the future; they merely state what can be, not what will be. Some of these include following:(1) Judgmental Forecasting:Judgmental forecasting relies mainly on individual judgments or committee agreements regarding future conditions. An enterprise may use its own suppliers, customers, employees, business executives as the major source of qualitative information regarding future trends affecting the business. Business executives of various management functions may be consulted to form the judgment. Since the emphasis is on judgment, its components are here under: Common Sense Maturity

Qualitative Experience Ability to reason out the suggestion(2) Statistical Time Series:

Time series method used historical data to develop forecasts of the future. The underlying assumption is that patterns exist and that the future will resemble the past. Various trends e.g. purchasing power, changing number of the customers, population growth, innovation etc and their impact on the past data for developing future forecasts may be carefully considered. The basic problem with time series is that a historical trend is based on a series of patterns or relationships among so many different variables that a change in any one can drastically alter the future direction of the trend.(3) Composite Scenario:

Scenario is a method of thinking rigorously about the future. Scenarios are a way of developing alternative futures based on different combinations of assumptions. It is focused descriptions of different likely futures presented in a narrative fashion. A scenario thus may be merely a written description of some future state. (4) Delphi Technique:The Delphi technique is a structured approach for reaching a consensus judgment among experts about future developments in any area that might affect a business. It is method of collecting opinions about the future and judging how likely a future event or situation is. Experts answer a list of questions without discussing them with each other, look at each others' answers, and change them until a consensus is reached (a situation where they all agree).(5) Brain Storming:It is a group problem-solving technique that involves the spontaneous contribution of ideas from all members of the group. Every participant is encouraged to think aloud and suggest as many ideas as possible Analysis, discussion, or criticism of the given ideas is allowed only when the brainstorming session is over and evaluation session begins.