Knowledge based decision making on higher level strategic concerns: system dynamics approach

In recognizing knowledge as a new resource in gaining organizational competitiveness, knowledge management suggests a method in managing and applying knowledge for improving organizational performance. Much knowledge management research has focused on identifying, storing, and disseminating process related knowledge in an organized manner. Applying knowledge to decision making has a significant impact on organizational performance than solely processing transactions for knowledge management. In this research, we suggest a method of knowledge-based decision-making using system dynamics, with an emphasis to strategic concerns. The proposed method transforms individual mental models into explicit knowledge by translating partial and implicit knowledge into an integrated knowledge model. The scenario-based test of the organized knowledge model enables decision-makers to understand the structure of the target problem and identify its basic cause, which facilitates effective decision-making. This method facilitates the linkage between knowledge management initiatives and achieving strategic goals and objectives of an organization. q 2004 Elsevier Ltd. All rights reserved.