We are not just surviving in a dynamic millennium, but also in a turbulence era: the knowledge era. Sustainable competitive advantage entirely relies upon the establishment of and exploiting effectively the core competencies. The resource-based view (RBV) of the firm defines a strategic asset as one that is rare, valuable, imperfectly imitable and non-substitutable. Knowledge is seen as a strategic asset with the potential to be a source of competitive advantage for an organization. In this journal, we offer a feasible model, evaluating on how and why knowledge management (KM) can be leverage to secure the competitive advantage from the RBV of the firm.

Choi (2000) argued that the defining KM is so challenging because it has multiple interpretations. KM is a conscious strategy of getting the right knowledge to the right people at the right time and helping people share and put information into action in ways that will improve organizational performance. KM can be perceived as a deliberate design of processes, tools, structures, with the intent to increase, renew, share or improve the use of knowledge represented in any of the three elements (structural, human, and social) of intellectual capital. KM is about encouraging individuals to communicate their knowledge by creating environments and systems for capturing, organizing, and sharing knowledge throughout the company (Martinez, 1998:89). KM has two core objectives:

Alavi and Leidner, (1999) contended that KMS are predominant in both theory and practice. Broadly defined, knowledge based system's use extensive domain specific knowledge to solve problems and support decision processes. KMS refer to the use of modern information technologies (e.g. the Internet, intranets, extranets, collaborative computing/groupware, software filters, agents, data warehouses) to systematize, enhance and expedite intra and inter firm knowledge management. KMS refer to a class of information systems applied to managing organizational knowledge. They are IT-based systems developed to support and enhance the organizational processes of knowledge creation, storage/retrieval, transfer and application. KBS address both the past and the future since they focus on problem solving, they support both tacit and explicit knowledge. KBS supports both objective and subjective aspects while they are highly dependent on Internet-based technologies. They enable the sharing of knowledge throughout the organization (Wickramasinghe, 2003).

KM can be viewed as a socio-technical system of tacit and explicit business policies and practices. It is enabled by the integration of information technology tools, business processes, human or social capital, continuous learning and innovations. Huber (1991: 89) argues that an organization learns if any of its units acquires knowledge that it recognizes as potentially useful to the organization. Productive learning exploits, explores, and restructures an organization's values and criteria, enhances organization capability and improves an organization's performance. This is the type of learning that organizations promote. Learning is identified as a quantifiable improvement in activities, increased available knowledge for decision-making or sustainable competitive advantage (Cavaleri, 1994; Dodgson, 1993).

In relation to any major, enterprise-wide effort/system, KMS have been displayed in the popular, technical press as having essential direct impact on companies, implementing it effectively. The implementations of enterprise-wide efforts, i.e. Enterprise Resource Planning and CRM, have demonstrated similar items of property. The Resource-based view (RBV) literature advises that competitive advantages can be created and sustained via knowledge use. Thus, we strongly perceive that the RBV is an appropriate theory to explain whether KMS indeed formally and empirically yield competitive advantage, elaborating empirically the nature of the relationship between KM and competitive advantage.

Drucker (1993) argued that differences in direction toward KM are established by empirical studies. There is common agreement that KM will symbolize the largest competitive advantage for organizations in the new millennium. He addressed the organization of knowledge itself. He suggested that capabilities could be a source of competitive advantage for an organization. The key premise is that knowledge will reside in different areas of the organization. However, the focus of the firm should be on organizing that knowledge by providing translators, knowledge brokers and boundary spanners. They also stressed the role of communities of practice in providing common structure and meaning for the transfer of experience.

Grant (1995) discussed the facets of knowledge integration and coordination capabilities that are a source of competitive advantage for the firm. He pointed to four mechanisms for integrating specialized knowledge:

Miller and Shamsie (1996) used a resource-based orientation in examining the performance of seven major Hollywood film studies over thirty years that began with a period of stability but turned into one of change. They hypothesized contexts within which particular resources were determined to be more or less valuable. They found that property-based resources in the form of exclusive long-term contracts with stars and theatres helped financial performance in the stable, predictable environment of 1936-1950. In contrast, knowledge-based resources in the form of production and coordinative talent and budgets boosted financial performance in the more uncertain (changing and unpredictable) post-television environment of 1951-1965.

Prahalad and Hamel (1990) proposed the notion of core competencies relating to the internal capabilities of organizations, listing three tests to be applied to identify a core competence:

Spender (1996) noted that an organization's knowledge and its ability to generate new knowledge is the key to achieve competitive advantage, identifying four heuristics include

Zack (1999a,b) postulated that competitive advantage arises due to the strategic use of resources and capabilities, of which knowledge is believed to be the most significant. He evaluated an organization's knowledge strategy by integrating knowledge strategy with business strategy illustrated with cases drawn from a number of high profile organizations that include Dow Chemical, Buckman Laboratories, and Image Corp. His knowledge strategy framework matches the traditional strengths-weaknesses-opportunities-threats (SWOT) analysis, and is depicted along two dimensions. The first focuses on the extent to which the firm is mainly a creator, rather than a user of knowledge. The second dimension focuses on whether the primary sources of knowledge are internal or external. Together, these two dimensions help a firm explain its current or desired knowledge strategy. Zack advises that knowledge-based SWOT analysis can lead to mapping knowledge-resources and capabilities against strategy opportunities and threats to clearly understand advantage and weakness.

In Table 1, we present major published research on KM, strategy and competitive advantage.

Table 1: Research on KM, strategy and competitive advantage

Dr Paul LAU has been a “Leader Manager” within Hong Kong Police Force since April 1974 and was promoted from a Police Constable when having fulfilled the academic qualification via his evening school studies, performing remarkably well while serving within the Crime Wing, he secured the strong recommendation of promotion following the Extended Interview by its Panel in 1987, serving as a competent, professional and dedicated commanding officer in various Formations.

Being a strong implementer of life-long learning concept, Dr Lau has been conferred jointly DMS by Lingnan University and HKMA in 2002; BBBA by RMIT University “With Distinction” in Australia in 2003; MBA “With Merit” by Hong Kong Baptist University in 2005; MA by Macquarie University in Australia in 2007 and PhD in BA by Bulacan University in Philippines in 2009.