1. Introduction
Currently, organizations are seeking to obtain a sustainable competitive advantage in the knowledge management area and also in the competence management area.
According to Bose (2004) about 80% of the companies mentioned in the Fortune magazine have allocated people to Knowledge Management activities and 95% of the CEOs questioned at Davos by the World Economic Forum declared that knowledge management is a critical factor for the success of an organization. Nevertheless, many organizations are unable to identify the results obtained through the implementation of knowledge management (Ahmed, Lim, Zairi, 1999; Chua, Goh, 2008). Similar difficulty is identified by the competence management approach. It is an articulating approach which allows the organization to focus on its most valuable resources, thus consolidating a path that aims at building sustainable competitive difference. The results of recent researches basically refer to a description of experiences or a presentation of cases of success in which the causal ambiguity is highlighted as a present factor in this approach.
In other words, although mapping the competences is important its construction dynamics and articulation among the many resources for those competences to be generated is not easily observed or highlighted by the literature. Studies highlight more the “what” than the “how” or the “why” the competences are generated, consolidated and substituted by others.
By observing a historical perspective and trying to understand how those approaches were constructed, Nielsen (2005) and Kane, Ragsdell and Oppenheim (2006) point out that the focus of Knowledge Management was initially the acquisition, codification and distribution of organizational knowledge through information systems. Research on knowledge management was mainly about the categorization of knowledge. Nielsen (2005) presents the evolution of the research on knowledge management: categorization – in the 60’s and 70’s the focus was on the categorization of knowledge; imitation and replication – in the 80’s the concern is on how to transfer knowledge and how to protect it; internalization – in the 90’s the focus is on guiding the process considering the organizational learning; synergies – from the year 2000 the focus is on the integration of the content and process perspective.
Competences, in turn, became important due to the work of Prahalad and Hamel (1990), even when the subject had already been discussed within the people management environment (Boyatizis, 1982; Magalhães, Rocha, 1997, Velde, 2001). Competences started to be discussed by organizational psychologists who emphasized competence characteristics and personality traits. The works of McCleland (1973) and Boyatizis (1982) describe the initial efforts to understand the competences of people within the organization and focused their studies on managerial profile and leadership. During this period competences are understood as the desired knowledge, abilities and skills to perform the job or the attributions of the leader. Gradually, this functionalist approach starts to change and within this context French and Swedish authors contribute greatly to the understanding of competences. Authors such as Le Boterf (1994) and Zarifian (1999) highlight the importance of thinking about competences within an organizational context and more specifically, considering the notion of event. In this sense, each situation requires the mobilization of different competences to generate an effective action. Therefore, nobody is competent a-priori. Another important point is that of the development of competences. These are understood and developed based on three aspects: professional, educational and social. Therefore, the individual’s life experience is fundamental to this construction. The Swedish authors stand apart due to their interpretative approach and for emphasizing the collective. In this sense, competences are developed from the interaction and the sensemaking (Sandberg, 1996, Sandberg and Targama, 2007).
Regarding the organizational perspective, the study of competences starts to become important with the work of Prahalad and Hamel (1990), with the dissemination of the concept of core competence. These competences represent a sustainable competitive difference and are characterized by the prioritization and inner mobilization of the organization’s capabilities and resources. It is highlighted that the essential competences are greatly influenced by the Resource Based View (Bower and Gilbert, 2007, Barney and Clark, 2007, Sanchez and Heene, 2005, Barney, 2001; Foss, 1997; Penrose, 1959; Wernenfelt, 1984) and are the link between the people and the strategies of an organization.
The objective of this paper is to analyze similarities and differences between Knowledge Management and Competence Management, allowing for a better understanding of the possible connection between these two areas. We believe that one approach complements the other, allowing for new reflections on themes normally discussed individually in literature. As these approaches give special treatment to common aspects like the collective, context, and the question of sharemeaning and sensemaking, the nature of these approaches stimulates new insights starting from an analysis of similarities, differences, difficulties and possibilities.
Thus, this paper initially presents the concept, elements, phases and the evaluation of Knowledge Management (section 2) and of Competence Management (section 3). Following this (section 4), the relationship between Knowledge Management and Competence Management is discussed. Conclusions (section 5) will present an initial proposal of a framework relating the main ideas of each approach, as well as insights for future research.
2. Knowledge Management
Before defining Knowledge Management (KM), it is necessary to clarify the difference between data, information and knowledge. Data may be regarded as raw facts, which when organized considering a certain context, makes information, which serves to achieve an established objective. Knowledge is information in connection with individual experiences. Knowledge may be of two types, explicit and tacit (Nonaka, Takeuchi, 1995). Explicit knowledge is easily documented and transmitted to others as it is structured. It may be found, for example, in manuals and documents. While tacit knowledge is difficult to articulate and make available to others, it can be, for example, expressed through intuitions, insights or individual beliefs. According to Nonaka and Takeuchi (1995), tacit knowledge is composed of technical elements (know-how and skills) and cognitive ones (mental models such as paradigms, beliefs).
Tacit knowledge is important for an organization as it encapsulates individual expertise and, because it is harder to be copied by competitors, can be a competitive differential. Competition between organizations is more intense every day. In this environment, focusing on tangible aspects is not enough for the organization’s survival. Knowledge then becomes a source of competitive advantage (Sher, Lee, 2004; Jasimuddin, 2007; Hoof, Huysman, 2009).
Knowledge can also be classified as individual and organizational (Bhatt, 2002). Individual knowledge is expressed through creativity and attitudes, while organizational knowledge is reflected in the products and services that the organization offers its clients. Individual knowledge can be transformed into organizational knowledge by interaction between individuals, as long as there is a favorable organizational environment which allows for this.
Nowadays, there is not just one definition for KM as, depending on the author, different conceptual dimensions are considered. KM is defined by Darroch (2003) as “the process that creates or locates knowledge and manages the dissemination and use of knowledge within and between organizations”. This concept focuses on acquisition, dissemination and the utilization of knowledge. Another important aspect is inclusion, that is, KM does not only occur within the organization. Knowledge can be attained from different sources such as by workers, competitors, suppliers and clients (Darroch, 2003). The organization, for instance, can obtain knowledge from customers which enables innovation or the creation of new products. In this way, KM needs to focus on the internal and external environment of the organization. Lee and Yang (2000, p. 784) say that KM is “the collection of processes that govern the creation, dissemination, and leveraging of knowledge to fulfill organizational objectives”. In this concept, the relationship of KM with organizational objectives stands out.
KM can be divided into phases, for example, Darroch (2003), Tiwana (2002), and Armistead (1999) consider acquisition, dissemination, and the utilization of knowledge. On the other hand, Bose (2004) considers the phases of creation, storage, refinement, management, and dissemination. As opposed to the other authors, Bose (2004) does not include utilization as one of the phases of KM. Demarest (1997) presents the following phases for KM: construction, transformation, dissemination, utilization and management. KM has phases that may be compared to the PDCA (Plan-Do-Check-Act) cycle of Total Quality Control (TQC) (Ahmed, Lim, Zairi, 1999). The creation of knowledge corresponds to the plan phase, sharing knowledge is related to do, measurement with check, and utilization is associated with act. Based on the different proposals by the authors quoted, we can say that the phases of KM are creation, storage, dissemination, utilization and measurement.
Armistead (1999), Demarest (1997), Ahmed, Lim and Zairi (1999), and Goldoni and Oliveira (2010) discuss the necessity of measuring KM. According to Ahmed, Lim and Zairi (1999), measuring is important because: it is not possible to manage what cannot be measured; to determine which aspects need to be improved; to make comparison possible, and supply references to people permitting them to monitor their own performance, among other aspects. A measurement system should reflect the different levels in the organization, combine indicators associated with individual tasks and with the process as a whole, indicating opportunities for improvement. According to Bose (2004), KM should be aligned with the organization’s objectives. In this way, the KM measuring system should be linked to the measuring system of the organization’s performance as a whole.
3. Competence Management
When discussing Competence Management (CM) there are, basically, two topics: the first referring to conceptual comprehension, involving discussions on the diversity of concepts and competence levels (individual and organizational), and the second referring to a view of competence based on the internal and external environments of the organization.
CM is an approach that has been attracting the attention of both academics and practitioners. However, there is no single concept on the theme, mainly because of its complex and dynamic nature. According to Le Boterf (1994, 2004), competence is a concept under construction.
Even so, it is still possible to talk about notions of competence. Hence we have pointed out some elements that allow for a better understanding of the matter.
- Development of knowledge, abilities, and skills (background) - Boyatizis (1982), Parry (1996), Boog (1995), Becker (2004), Spencer and Spencer (1993), Magalhães and Rocha (1997), Dutra and Silva (1998), Sandberg (1996); Sandberg and Tarmama (2007).
- Capability (aptitude) - Moscovicci (1994), Magalhães and Rocha (1997), Dutra and Silva (1998), Zarifian (1999); Helfat et al. (2007).
- Work practice, capacity to mobilize resources, a fact that differs from the potential concept (action) - Sparrow and Bognanno (1994), Cravino (1997), Ruas (1999), Moscovicci (1994), Le Boterf (1994), Fleury and Fleury (2000), Davis (2000), Zarifian (1999); Birchall and Tovstiga (2005).
- Articulation of resources (mobilization) – Le Boterf (1994, 2004).
- Search for better performance (results) - Boyatizis (1982), Sparrow and Bognanno (1994), Parry (1996), Becker (2004), Spencer and Spencer (1993), Cravino (1997), Ruas (1999), Fleury and Fleury (2000), Dutra and Silva (1998), Davis (2000), Zarifian (1999); Sanchez and Heene (2005).
- Constant questioning (dynamic perspective) – Ulrich and Lake (1990); Helfat et al. (2007)
- Individual learning process, where the main responsibility falls upon the individual himself (self-development) – Bruce (1996); Velde (2001)
- Relationship with other people (interaction) – Sandberg (1996).; Sandberg and Targama (2007).
One of the main reasons for interest in CM is the intention to obtain a clear focus on the company’s competitive actions and, from this, prioritize action, processes and key areas, and stimulate the development of people. In this way, competence management can be understood based on two main levels of analysis.
The first refers to core competence – popularized by Prahalad and Hamel (1990). This concerns a collection of abilities and technology available in companies, which are fundamental for the organization’s competitive success in the long term, and, as long as they are not dealt with separately, contribute to a wide variety of markets and potential products.
The second level involves individual competence – bearing in mind the diversity of concepts in this area, we chose that developed by Le Boterf (1994) in which “competence is assuming responsibilities when facing complex work situations to deal with new, surprising and singular events.”
Effective mobilization between these two levels would give the company a consistent movement of consolidation of competitive differential based on the management of its internal resources. CM thus possesses a strong influence from the Resource Based View (RBV), as it implies mobilization and dynamic management of resources. In this vein, the emphasis on the work of competences is in the company’s internal environment (Barbey and Clark, 2007; Barney, 2001; Foss, 1997; Penrose, 1959; Wernenfelt, 1984). Consequently, it deals with the company’s mobilization of resources in the sense of creating a competitive differential based on their effective management, in the course and the dynamics of the company. However, to consolidate this competitive advantage, it is necessary for the customer to perceive these competences as elements that value his purchase. Thus, we emphasize an internal movement from the company towards the consolidation of competences and an external one, when these competences are observed and, therefore, validated by customers. A cycle is then created, where competences are produced in the organization’s internal environment and validated within the external one by the perception of the associated value of the customers (inside-out movement).
4. Knowledge Management versus Competence Management
Although discussed by authors, the relationship between KM and CM approaches has been little explored, making evident only specific aspects like, for example: the relevance of the individual in some KM phases, relating individual capacities with the creation and the utilization of knowledge (Spanos, Prastacos, 2004); the effect of the transference of tacit knowledge on the capacity of innovation in the organization (Cavusgil, Calantone, Zhao, 2003)); the importance of the evaluation of capacities for KM (Denrell, Arvidsson, Zander, 2004)) and new knowledge and competence management initiative at Ericsson Business Consulting (EBC), which uses an intranet as its main means of implementation (Baladi, 1999).
These papers favor empirical research relating specific KM and CM elements. However, not one proposes carrying out a wider theoretical analysis of the relationship between these two approaches. The present study intends to develop a theoretical comparison relating both approaches, without the pretension of being conclusive. Here, we will present the main elements of each approach in comparison.
The evolution of knowledge management starts from a technological perspective and goes through a multidisciplinary perspective (Prusak, 2001). Within the technological perspective the main concern is centered on categorization, codification and distribution of knowledge through information systems. Within the multidisciplinary perspective social, technological and economic aspects are considered. The evolution of competence management, in its turn, brings back the origin of leadership studies and the belief in an ideal profile for a manager based on competences and personality traits (Boyatizis, 1982; McCleland, 1973). However, more recent approaches criticize the atomic vision which reduces competences to a list of attributes and bring forth some discussion that values the context, the dynamics of competences and the social perspective (Sandberg and Targama, 2007, Sandberg, 1996; Velde, 2001) promoting a more strategic vision on the subject and considering the issue of sustainability, which is aligned with the Knowledge Management tendency.
There is a diversity of concepts in both approaches, with each author emphasizing specific aspects. This is related to the subjectivity of the themes. We highlight the existence of a paradox related to the notion of the themes discussed – if, on the one hand, there exists the necessity to have a single concept (clarity of limits), on the other hand, it becomes impossible to attribute a universal concept without excluding important elements (complexity and dynamic).
When it comes to a vision of the internal and external company environments, the logic of the rationale developed by KM and CM is distinct. From a KM point of view, the organization uses knowledge obtained together with suppliers, customers and competitors, which are external elements to the organization (outside-in view). The internal vision is also important to the organization. In the same way that suppliers and customers can also participate as appraisers of the result (inside-out view). On the other hand, CM comes from an internal analysis based on management of resources and capability to consolidate competence. The external environment would enter in the final stage of validation of these competences (inside-out view). In other words, the customer would need to see the aggregated value brought by them. Without this client perception, it would not make sense to talk about core competence. In summary, KM begins the process with input information and CM ends the process validating competences.
KM is concerned with retaining and disseminating knowledge at an organizational level. The KM process starts from the organizational objectives. However, the acquisition of this knowledge depends on the individual. From a CM perspective, the logic is quite similar. CM starts with strategic discussion about competences at an organizational level, centralizing its effort on managing individual competences as a way to consolidate organizational ones. To summarize, the KM and CM process starts at an organizational level but gives special treatment to action at an individual one.
Despite the fact that knowledge management focuses on the organization, it would not be possible without considering individuals and information technology. Most literature on CM and KM highlights the importance of people management. In other words, the management of competences at an organizational level is not viable without specific work in relation to individual competences, as it is the people who form the organization.
The phases of KM do not run linearly, however, they are presented clearly in literature, along with the inclusion of the measurement phase, which takes place throughout the process. CM does not present pre-defined phases in its process which can be highlighted. We may be able to speak of identification, development and evaluation of competences in a generic way. All the same, it would not make sense to consider rigid phases in relation to the thematic ones, as what brings value to the discussion and comprehension of competence is exactly the path dependence and dynamic constructed by the company, which cannot be fragmented. Furthermore, the actual evaluation of competence is limited to the evaluation and performance of people. Comparing with KM, evaluation is taking its first steps, although authors state that the process, as much as the results, should be considered although the way to do so is not yet clear to either academics or organizations.
A great number of publications that talk about KM, deal specifically with information technology. As mentioned before, IT is an essential support for KM, yet not a unique element. Some companies utilize IT tools to make evaluations in CM. Thus, IT represents more of an instrumental vision than a strategic one from a CM perspective.
KM is associated with the acquisition of competitive advantage and is supported by several authors (Carrión, González, 2004; Gray, Meister, 2006; Sher, Lee, 2004; Jasimuddin, 2007; Hoof, Huysman, 2009). However, a consensus regarding the utilization of metrics to evaluate the process and results obtained with KM is still inexistent. Authors (Ahmed, Lim, Zairi, 1999; Armistead, 1999; Demarest, 1997; Dawson, Nolan, 2006; Chua, Goh, 2008) point to the relevance of utilizing metrics which contemplate the KM process and the results of this process for the organization, contributing to the acquisition of sustainable competitive advantage. The difficulty is in identifying the real contribution of KM in organizational results starting from each individual’s contribution. From a CM perspective, the emphasis in the evaluation process is on the individual. Despite recognizing competence management at a managerial and organizational level, inherent difficulty exists in relating decisions of strategic scope to operational ones. Discussion at a strategic level but evaluation and operation of competences on an individual one, is favored. Metrics reinforce the idea of an ideal, standardized profile of the professional, often distant from the strategic focus of the organization.
The most recent discussions on the mentioned approaches bring back to the current scenario important elements that need to be analyzed for a better understanding of the notion and the implications of both KM and CM. Knowledge Management can be understood from a three-element basis: technology, the individual and the organization (Awad, Ghaziri, 2004; Carrión, González, 2004; Edwards, 2008). The individual corresponds to social aspects such as the creation of information, abilities and competences of the organization’s members. The main aspects related to the individual are: organizational culture; the assignment of roles and the attitudes. The organization element also corresponds to the social aspects, considers the structural requisites and the fostering of conditions that stimulate knowledge dissemination helping in the identification of critical knowledge to achieve a sustainable competitive advantage. As to the organization element, its main aspects are: acquisition, storage, transfer, application and protection of knowledge. The technology element corresponds to technical aspects, is related to the implementation of the communication structure and tools that act as support for the knowledge-based process. Technology is a support for KM and can be considered as a facilitator for the process. The technology element comprises hardware and software. The Information and Communication Technology (ICT) diminishes the barriers to knowledge share and transfer having a fundamental role as support for KM practices (Fehér, 2006). The technology to be adopted depends on the users’ needs and type of knowledge among other things.
The main elements involved in the notion of competence refer to individuals, processes, culture and structure (Drejer, 2000). At the individual level people’s competences stand out and the importance of establishing behavior standards which are desirable and necessary to achieve the aims and objectives of the organization and which have a direct impact on the organization’s performance. Regarding processes it is important to point out that notwithstanding the efforts to create competence and attributes standards with a focus on performance the development of competences involves learning processes. Because of this, the approach is a dynamic one and is based on people interaction, self-development and people’s engagement to their own development and that of the organization. Regarding culture, values, beliefs and the relationships that emerge within the organizations and which are known as “the invisible elements of an organization” are to be highlighted. Finally, the structure is an element that cannot be forgotten since it represents the axis around which competences are structured and encompasses the formal and informal practices of an organization. Therefore, formal training programs and at the same time activities involving communities and task groups can be thought of from an informal perspective.
Although segmented in a different way the main elements of KM and CM can be considered similar. The main difference identified is on the importance attributed by KM to Information Technology; importance which is not verified in relation to CM.
The table below synthesizes above mentioned ideas.
Table 1 – Main elements of Knowledge Management and Competence Management
Dimensions of Analysis |
Knowledge Management |
Competence Management |
Evolution |
Technology - Multidisciplinarity |
Leadership - Strategy |
Notion |
Diversity of concepts |
Diversity of concepts |
Environment |
External/Internal |
Internal/External |
Customer |
Begins process – input of information |
Ends process – validates competence |
Level |
Organizational/Individual |
Organizational/Individual |
Emphasis |
On the organization |
On the individual |
Phases of process |
Clearly defined phases |
Path dependence dynamic of the company |
Information technology |
Indispensable support |
Possible tool for individual evaluation |
Performance evaluation |
Process/Results organizational |
Process/Results individual |
Element |
Individuals/ Organization/ Information Technology |
Individuals/ Process/ Culture / Structure |
Despite the comparison between KM and CM having been developed based on distinct elements, shown in a highly precise manner for each approach, this analysis does not permit us to have a dynamic view on the relation between the theories. Thus, we highlight the importance of (re)thinking about KM and CM under a more interactive and complementary perspective. Choin and Lee (2003) focus on the study of KM styles: dynamic, system-oriented, human-oriented and passive. According to the authors, organizations classified in the passive style do not explore knowledge, showing little interest in KM. The human-oriented style focuses on the acquisition and sharing of tacit knowledge and individual interaction. The system-oriented style prioritizes the codification and reuse of knowledge, technology being an important aspect. In organizations classified as dynamic style, technology is introduced to support the group, they are intensive in communication and consider tacit and explicit knowledge.
Based on these highlighted elements, we believe that KM can contribute to the development of competence, stimulating the development of strategies and motivating analysis closer to the customer, thus suggesting more effective work in the organizational ambit. This emphasis on the organization is dealt with when it defines the company’s competence, however, it is soon left in second place when there is an appreciation of actions in the management area of people for competence. In another way, CM can stimulate the development of knowledge at an individual level, which appears to be one of the limitations when it comes to KM. In other words, there is an apparent difficulty when referring to KM on the individual level, which can be stimulated through the development of competence in people.
Figure 1 illustrates this complementary.
Figure 1 – Virtuous cycle between KM and CM
5. Conclusion
This paper analyzed the relation between the KM and CM approach. We believe it is a little explored field which can contribute to the development of both approaches from new insights produced in this work and in future studies. Thus, we do not intend to develop a conclusive work rather, a reflective one.
The main contributions of the proposed reflections are based on similarities and peculiarities of each approach, having as a core some important elements discussed in literature: evolution, notion, environment, customer, level, emphasis, stages of process, information technology, performance evaluation and element. These elements permit better comprehension of what we understand by KM and CM and, also, allow for reflective analysis in the attempt to approximate these theories.
We can present the main conclusions based on analysis:
- of the internal and external environment of a company;
- of the individual and the organization.
Regarding the internal and external environment of a company, we can say that both approaches make reference to the importance of observing these two types of environment, being different only in the emphasis attributed the moment that the process of development of knowledge and competence begins. From the KM perspective, we observed a focus in the external environment when the customer creates new inputs and demands on the organization (outside-in view), just as when he recognizes the results presented by the organization (inside-out view). The entire problem, then, is in how to manage and create opportunities so that knowledge can be developed in a company’s internal environment. On the other hand, from the CM perspective, there is a whole initial process of mapping and prioritizing of resources and competences that can generate a competitive advantage for the organization. Nevertheless, the management of these competences will only be effective if the customer perceives value in them (inside-out view). In reality, this vision concerning the internal and external environment is complementary as both outside-in and inside-out movements are important as much for KM as CM. The following figure illustrates this situation.
Figure 2 – KM and CM – vision of internal and external environment
Another point that we highlight in this study refers to the vision of the individual and the organization. From the KM point of view, effort is concentrated on the organizational environment, as much in practice as in expected results. In this context we point out the importance of the IT area and of indicators regarding organizational performance. In turn, CM draws attention due to its work developed on an individual level. In this way, effort is focused on the HR area and indicators of individual performance. Once again we observe a virtuous cycle where KM and CM can be seen with complementary strategies. Figure 3 illustrates this characteristic.
Figure 3 – Relation between Knowledge Management and Competence Management
Knowledge Management and Competence Management are seen from two approaches that we call rationalist and systemic. The rational approach focuses on the operationalization which can be understood as attributes or phases of a process, prevailing more determinist and descriptive characteristics, fact which ultimately would foster the Knowledge Management and the Competence Management (inductive vision). On the other hand, the systemic approach emphasizes the importance of the dynamics and of the inter-relations that take place in the organizational environment, with more contextual and social characteristics and which highlight the complexity of the organization (deductive vision).
Finally, we highlight that even though neither KM nor CM are recent approaches, their combination may stimulate the development of new and more effective organizational practices, be it by the complementary views given in this study or by others, not dealt with as yet, but which we strongly recommend be investigated.
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Acknowledgments - The authors are grateful for the support provided by CNPq.