Competition is the foundation of a market economy, that ensures effective redistribution of resources in the economy, helps to meet the needs of people and organizations, increase the efficiency of the enterprises. On the other hand, in the conditions of strong competition survive only the strongest organizations which are able to provide competitive advantage. Modern economy imposes special requirements on the operation of organizations and their competitiveness. In the information economy, or the “knowledge economy”, the leading role in competition has knowledge of people, their skills, as well as access to information. Knowledge and intellectual capital are the main competitive advantage of the businesses and the economy as a whole.
In this paper it is considered the importance of knowledge management and development of intellectual capital of organization for increasing the competitiveness and performance. Theoretical basis are the modern theories, methods and approaches to knowledge management. The main hypothesis is that during the transition to an information economy, the decisive factor of competitiveness of the company are intangible assets and, in particular, knowledge. Knowledge forms the basis of intangible assets, which, in turn, make organization competitive.
KNOWLEDGE AND ITS IMPORTANCE FOR ORGANIZATIONS
Knowledge management is one of the basic concepts of management, affecting the business, along with the concept of total quality management (TQM), reengineering processes, e-commerce methodologies Balanced Scorecard, EVA, ABC. That is, knowledge management, according to the general view, in the near future will be key concept that defines the paradigm of management in general. (Teece 1998)
Organizations nowadays increasingly rely on their intellectual assets as opposed to tangible assets that they manage. Solutions for knowledge management are becoming key to the creation and maintenance of intellectual capital assets and their use to create economic value. Solutions in the field of knowledge management enable individuals, teams and organizations to achieve much more in the creation, transfer and obtaining of knowledge. (Teece 1998)
There is a great difference between data, information and knowledge. Information is a collection of data, which has meaning and significance. After passing through the filter of perception and thinking (cognition), the information stimulates multiple steps and activities, and leads to the creation of knowledge. All knowledge constitute an intellectual capital of the organization, which is composed of human (knowledge and skills of workers), structural(patents, licenses, inventions, corporate culture, information technology) and client (brand name, brand image in the market and customer information, customer relationships) capital that in the process of their interaction are able to transform and to ensure the increase of capitalization.