Zenona Ona Atkociuniene Zina Gineitiene Erika Sadauskiene

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					6                                                                          VADYBA / MANAGEMENT. 2006 m. Nr. 2(11)



        KNOWLEDGE MANAGEMENT: LEARNING ORGANISATION
                (NATIONAL REGIONAL ASPECT)

                  Zenona Ona Atko i nien , Zina Gineitien , Erika Sadauskien
       Alteration of the economic situation, social life variations determine the changes in organisations. Nowadays,
leaders of regional, international markets focus on knowledge management, organisational learning, emphasising that
these are the crucial factors in shaping strategies for business organisations. Ever-growing changes and uncertainty in
the environment in which organisations must function increase the requirements for employees to adequately react to
market needs and to improve product or service quality. In the knowledge society where changes in information,
technological innovations are incredibly rapid and where the development speed of the environment and the society
increases constantly, organisations and profit seeking enterprises are forced to learn and improve continually in order to
be successful. The purpose of this report is to reveal how progressive knowledge management methods, one of the main
being learning, determine a competitive advantage of organisations; to present a concept of a learning organisation; to
discuss necessity to establish such organisation, its needs and characteristics; and to review the legal acts of the
European Union and the Republic of Lithuania regulating processes of knowledge management and knowledge economy.
       Key words: knowledge management, organisational learning, learning organisation.

      Core of knowledge management and interaction with knowledge economy
       Innovative possibilities of knowledge use are already created through the use of continuously advancing
technologies and software decisions. Knowledge has assumed a material meaning, it is sort of material
information medium - it may be created, used, disseminated, shared. Knowledge management has developed
into a separate and independent field, the main purpose of which being the management of intangible
organisational assets such as intellectual capital, skills and knowledge of the employees, image of an
organisation, etc. On the other hand, practical application of knowledge management so far is rather
problematic because of the lack of distinctly defined methods.
       Knowledge management is a rather controversial scientific discipline. On the one hand, now it is the
latest trend in management; this term is often used in prestigious scientific publications. On the other hand, the
specialists and scientists working in this field claim that so far knowledge management lacks clarity and
determination because of the tendency to fit the trends in management of every description into the concept of
knowledge management (M.Bieli nas, 2000).
       Today knowledge management for every organisation is and will be one of the most important
components of its successful activities and development. One of the knowledge management pioneer, Yogesh
Malhotra (2000) defined knowledge management in an interview as the critical issue of organizational
adaptation and survival in face of increasingly discontinuous environmental change. It combines data and
information processing capacity of information technologies and the creative and innovative capacity of
human beings. Y.Malhorta (2000) provides the following definition of knowledge management in the sense of
information processing:
           it is the process of collecting, organizing, classifying and disseminating information throughout an
organization, so as to make it purposeful to those who need it;
           information contained in the organisation’s database is organised and analysed in such a manner so
it can be easily shared across the organisation, and not only within the branch where it originates;
           issues related to organising, the solution of which allows determining when and who needs concrete
information. Technological supply of information is ensured by various networks, databases, video
conferencing, conference boards, etc.
       In knowledge management the most important is not the increase of available information quantity, but
the identification of increasing quality of available information resources and interpretation capacity of human
beings. Information per se may be senseless and inappropriate, and even incomprehensible without the
context.
       Studies related to knowledge identify five activities all of which depend on and are integral to
information: locating existing knowledge, understanding needs for knowledge, searching for knowledge and
sharing knowledge with others; creating new knowledge; knowledge created on the outside of ongoing
processes (external knowledge); applying existing knowledge; verifying, extending knowledge.
       Knowledge management is understood as work with human beings and the knowledge acquired by
them. Innovations, originality, adaptation, and learning are essential to knowledge management. These are the
ways to ensure interrelationship, dissemination of ideas, critical thinking, competence and co-operation, as
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well as group work inside and outside the organisation. Knowledge management encourages sharing
employee experience, failures and good examples with the group members.
       According to M.Castels (2000), a knowledge-based phenomenon of the economy is global. In 1958
renowned philosopher M.Polanyi, who paid a lot of attention to the analysis of the development of a concept
of knowledge and its impact on development processes, pointed out that the mankind goes through a period of
major transformations when the social processes of knowledge creation, dissemination and configuration take
place. Means of communication help to develop social relations independent of time and space. Cognitive
capability, relationships and cultural identity are essential instruments of survival in a new world
(M.J.Rodriques, 2002).
       A strategic aspect of knowledge management is the knowledge economy, which is significant for the
economic policy due to several reasons:
            at present the knowledge economy is a priority of the economy of the majority of the developed
countries, therefore, an issue of the origin and use of knowledge is very important for economic development;
            a very significant role in the knowledge economy is played by the systems of education and science
which need to be altered in Lithuania, as well as in many other countries;
            a process of knowledge creation and use emphasises the importance of an individual as a main agent
and allows to return from synthetic models and aggregated numbers to possibilities and motives of man’s
economic activity;
            the topics of the knowledge economy make entrepreneurs regard the economy not as separate fields
and departments regulating them, but as an integrated totality;
            a policy of the specific knowledge economy has just started being shaped in Lithuania, therefore, it
often fails not to repeat the mistakes, which other countries have already made – an exceptional attention to
high technologies, priority trends of the economy set out by the state, etc.
       In an economic sense knowledge is valuable inasmuch as it is applicable. A human being, his/her
capabilities, knowledge and possibilities of its use are the most important asset in the knowledge economy.
Life-long learning in various environments – formal, non-formal (in an organisation) and informal (experience
of life) – is necessary in order for a human being to be educated and his qualifications constantly improving.
A.Aušra (2005) proposes to assess learning in the knowledge economy from at least four viewpoints:
            from the learner’s viewpoint – opposite to the viewpoint of an educational establishment;
            from the viewpoint of the economic and labour market – but encompassing social and cultural
factors;
            from the viewpoint of education policy – including overview of pivotal competencies necessary for
the knowledge economy, promotion of adequate management of educational establishments, financing of the
development of human resources, creation of learning methods and opportunities, ensuring of fairness and
learning accessibility in all life stages and learning systems (formal, non-formal and informal);
            from the wide viewpoint of the knowledge economy – linking of education and development of
human resources with innovation systems and information society.
       Potentialities to compete with other countries of the world more and more depend on capabilities of the
country’s citizens to effectively use knowledge. When effectively using these changes it is possible to increase
the prosperity of organisations and the state. Foreign organisations have long before understood that
competitive advantage is mostly determined by better and more coherent strategies of information use when
making business-related decisions, drawing up business projects and programmes.
       Lately an especially great attention is paid to restructuring and innovations of organisations, because in
order to remain competitive it is necessary to enhance a flow of new knowledge, which is an essential source
of constant improvement and innovations. Organisations must observe global tendencies, know their
organisational potentials, learn from others to absorb knowledge from outside, thus be a learning organisation,
which creates a favourable environment for learning, experimenting, fostering of enthusiasm and curiosity.

      Conception of a learning organisation
       An increasing speed of changes and competition force an organisation to introduce internal changes,
seeking to adapt to an abundance of events. D. Neef (1997) describes knowledge management as capability to
collect and use the knowledge of the employees, seeking to use this in creation of innovative products and
services, and to share operational efficiencies. Having in mind that knowledge is personal and subjective, and
activities of an organisation require its effective transfer, we encounter such new definitions as a learning
organisation, knowledge transfer, etc.
8                                                                            VADYBA / MANAGEMENT. 2006 m. Nr. 2(11)


       The concept of a learning organisation is of major significance at the worldwide level. This concept
encompasses not only business organisations, but also educational establishments and non-profit
organisations. The model of a learning organisation is replacing the beaurocratic model that has prevailed in
the West for a long time. Competition among various organisations is very intense; therefore, they must make
substantial changes that are to apply a new organisational model in order to survive. It is possible to state that
there is no single model of a learning organisation. R. Daft (2002) describes a learning organisation as
philosophy or an approach to what an organisation is and what the role its employees play in it.
       If we speak about the principles of management as a learning activity, we may maintain that learning is
usually described as "change in individual’s actions depending on his experience" (P.Thompson; 1995). Need
for learning is also understood as "learning which encompasses changes, is open to innovations, has available
sources so that technologies intended for learning be advanced, also meeting the organisation’s need for
learning and knowledge" (J.Henry; 1994). Other authors point out that "such themes as a mode of solving
uncertainty of the environment are often characterised in literature as such systems which are often called
learning organisations" (P.Thompson; 1995, p. 315). Members of such organisations must comprise their
enhanced values, knowledge bases, processes, skills and other systems, which encourage an effective reaction
to changes. This prompts the need for higher cultures, systems and employee knowledge formed on the basis
of confidence, which are valuable in decision-making and problem solving. (see Fig. 1).

                FUTURE                       PRESENT                     PAST
                (potential)                   (actual)                  (recalled)

         1 Imagination                                             7 Implementation

               2 Motivation                                   6 Satisfaction

                      3 Planning                         5 Evaluation

                                             4 Action


                                             PRESENT
            (Source: Henry J. Creative management. London, Sage Publications, 1994, p. 235)
            Fig. 1. Management scheme

       Learning organisations are such organisations in which employees are continuously extending their
competence in order to achieve desired results, new and open models of thinking are cultivated, collective
objectives are freely developed, learning to see the entirety is in a constant process.
       When describing a learning organisation the following must be stressed: encouragement of learning,
cultivating learning capacity; learning rate; continuous examination of one’s experience; knowledge creation;
knowledge and information dissemination across the organisation; a level of learning in the organisation:
individual’s => group’s => organisation’s; changes in the organisation, its activity, production made,
interrelationships (efficiency as the consequence of learning); learning as a principal value of organisational
culture (B.Simonaitien , 2003).
       The key tasks of a learning organisation are (B.O.Leonien , 2001):
           to observe the environment;
           to understand the importance of novelties;
           to consider each new task as an opportunity to learn;
           to continuously renovate;
           to employ people who are willing to learn new working methods, to acquire new skills;
           to create the possibility for employees to adapt and change;
           to encourage aspirations for knowledge, curiosity;
           to help everyone to find and make use of opportunities to learn;
           to create learning support systems;
           to regard executives of an organisation as encouragers of improvement of employee skills;
           to acknowledge and rank those executives who take care of improvement of employee skills;
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           to learn from success and failures;
           to ensure learning throughout the whole organisation.
      An organisation would not be able to evaluate the importance of main information resources and
information technologies, if it did not clearly realise the main processes carried out by the organisation itself
and its individual employees, in the course of which information is transferred from knowledge to concrete
actions. It is important to perceive that in each organisation where learning is continuous and the external
environment is observed with the aim to adapt to it, certain processes are in progress which have influence in
the way opinion is shaped, specific knowledge is created, decisions are made and thus the reaction and actions
chosen by the organisation are influenced (Fig. 2.).




                                  Understanding of the situation

                                       Knowledge creation


                                         Decision making

                                       ORGANIZATION
                                          ACTION

                                   Information generation
                                  Information presentation

                                    Information interpretation




              (Source: Choo Wei Ch. The Knowing Organization. How Organizations Use Information to Construct Meaning,
              Create Knowledge, and Make Decisions, New York, Oxford University Press, 1998, p. 4)

                                              Fig. 2. Learning organisation.

       All these processes are carried out subject to accessed information, which at first is interpreted
adequately. Information comprehension reflects the information available to or collected by the organisation
itself or its individual employees; it also depends on available knowledge, experience, and skills. Later on
such information encompasses additional available information and certain created scenarios of specific
activities and conduct, thus, creating new information which is important when analysing the organisational
environment, observing it, carrying out certain actions, etc.
       A learning organisation by its nature has been created to change the basic methods applied in
management up till now, and to change an action strategy. If earlier the key goal of the strategy was
production and profit, now this action strategy and operational principles go through changes by orienting
them to information and knowledge. This means that management, which for a long time was economic
management, now becomes a knowledge strategy. That is when knowledge collection and its maximum use in
the adaptation to the changing environment become the key goal of activities.
       The formation of knowledge and learning society is linked with the rise of one of its essential
characteristics – learning networks. In striving for a common goal, the participants of the learning networks act
as equal partners, learn from one another, as well as from the individual and collective activities. One of the
major tasks encountered during the development of learning society (learning regions, cities, towns, villages,
organisations) – to be able to establish learning networks and help to keep them functioning. In order to fulfil
this, it is necessary to know how to determine their condition, characteristics, peculiarities of functioning,
hence, it is necessary to be able to study them. The learning network constitutes the relations of exchange,
performed by people who collaborate, which determine the development of knowledge, capacity, and
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competence in this activity. The following basic parameters are typical of the said network: character of the
network, participants of the network, relations, purpose of the network, activity of the network („the sequence
of events“). These parameters are elaborated for the context of learning in the following manner
(P.Jucevi ien , 2006):
            according to the character of the network learning may be carried out within designated (formal) and
occurring (non-formal) networks; personal and social, community, organisational, inter-organisational
networks; more often than not within open networks;
            individuals or their groups and organisations may be participants of the network. Commonly
participants of the learning networks are the persons who can have various roles – goalkeeper, ally, opinion
leader, loner;
            the relationship which is outlined: by comprehension of the relationship, its reciprocity, clarity of
the norms, complexity, intensity, importance of the relationship; possibility to rely on one another,
achievement of goals, regularity of the relationship, atmosphere of the relations and their value. The value of
the relations is social capital based on personal and/or business relations; therefore, social capital is divided
into internal and external;
            activity of the network is the sequence of events incidental to the cycle of the lifetime of an
organisation. It may be extended through skilful management. Management impact – co-ordination of
activities of the network is necessary;
            learning as continuous improvement of skills is carried out adhering to the principle of the
knowledge spiral, in four stages: socialization, articulation, combination, internalization;
            methods and ways of communication are used to make relations of exchange more successful
        If in the past the main values of company employees were their loyalty and discipline, now their
competence, resourcefulness and capacity to learn continuously and know more than their competitors take
precedence. If company employees are capable to learn constantly and to modify their work promptly
according to a new situation, then they are the company’s greatest advantage over competitors. Need for
learning is understood as learning, which comprises changes, is open to innovations, has accessible sources, so
that the technologies intended for learning are advanced and thus the organisation’s need for learning and
knowledge is met.
        Ever-changing environment, ideas of knowledge and economics, globalisation highlight the importance
of learning not only at individual, group and organisational levels, but also at regional and national levels.
Stress is laid on regional demands, tendencies of the development of a learning region, practical use of
knowledge resources. This entire links with the specific features and conditions of the region, new ways of
thinking and conduct. Creation of a network of the co-operation in the field of knowledge, technology and
innovation management of the European regions is in progress, which enhances the development of the
regions, organisational learning, exchange of information, experience, and achievements. Impacts of leadership
of organisations, culture and learning striving for a long-term competitive advantage. Knowledge transfer
systems used in the development of international organisational networks. Creation of an electronic platform
aimed at knowledge exchange and finding of necessary information in information networks. Use of semantic
technologies in knowledge management.
        In knowledge management the most important is not the increase of available information quantity, but
the identification of increasing quality of available information resources and interpretation capacity of human
beings. Information per se may be senseless and inappropriate, and even incomprehensible if out of context.
Knowledge management encourages sharing employee experience, failures and good examples with the group
members. The essence of knowledge management is not the objects, but intangible assets, intellectual capital,
competitive advantage and innovations.
        So far knowledge management is in the early stages of practical application, but a direction of its
development is already quite distinct: it will be an integrating sphere of management, oriented towards the
creation and management of intellectual capital; it will have to conjoin all branches of management.
        Quality of competence and human resources, as well as capacity to act in knowledge and information
society are the vital precondition for formation of the knowledge economy in any country or region, therefore,
it is impossible to discuss a learning organisation without mentioning a national regional aspect. I.Kasinskait
(2005) proposes to discuss a learning region in a broader sense – as the totality of measures designed to
enhance economic development in the region through effective use of local resources and new opportunities.
The author declares that a learning region is a physical expression of the perception of changing development,
which is explained and implemented through various economic, social, cultural, political, and technological
processes of development, emphasising the importance of interactive learning (I.Kasinskait , 2005, p. 63).
VADYBA / MANAGEMENT. 2006 m. Nr. 2(11)                                                                          11

Hence, the basis of knowledge society is a learning individual, learning organisation, learning region, whereas
learning is not fragmentary or spontaneous, but a strategically important, focused process. Therefore, it is
vitally important what commitments; strategies and guidelines are provided for by the State with regard to the
formation of the knowledge economy.

       National policy of knowledge economy in the context of the European Union and Lithuania
       The structural policy of the European Union and participation in it are usually presented as one of the
most attractive results of the membership of the European Union, because it is related to considerable
appropriations from the budget of the European Union. At the Lisbon European Council in 2000 the heads of
the states and governments set a new strategic goal for the Union – “to become the most competitive and
dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better
jobs and greater social cohesion.” Seeking to enhance the economic prosperity and social welfare of the
European Union the Lisbon European Council approved the strategy in which one of the most important
priority areas is a competitive, knowledge-based economy (education, research and innovations). Striving for a
rapid economic growth and strengthening of competitiveness of Lithuania’s economy the National Agreement
on priority spheres of the social and economic development was reached on 3 December 2002. The Agreement
provides for the following priority spheres:
           competitive knowledge economy promoting creation of jobs in knowledge sectors;
           potential of the education and science sectors in assisting to solve issues raised by the knowledge
economy and adequately react to European initiatives related to research and innovation;
           combating poverty, social exclusion;
           reorganisation of the agricultural sector, increasing of competitiveness, renewal of the infrastructure,
and enlargement of business possibilities;
           reform of the management and administration of the public sector.
       Under the Single Programming Document of Lithuania for 2004-2006 the core goal of the development
plan of Lithuania is the growing competitiveness of the national economy which determines a rapid growth of
the knowledge-based economy, reflected primarily in the increase of the actual GDP and employment, and
leading towards growing prosperity and higher living standards for all the residents of the country.
       The long-term national development strategy, approved by the Government of the Republic of Lithuania,
lays down that in seeking the efficient development of the knowledge economy and electronic business, the
State must:
           to improve the legal environment and institutional structure enhancing the development of the
knowledge economy;
           to develop international co-operation when implementing latest scientific achievements of other
countries, and creating and expanding virtual centres for science and innovations, to participate in the creation
of the European research strategy;
           to support models of interface between research bodies and enterprises;
           to promote manufacturing of modern products and services, based on information technologies and
telecommunications, for domestic needs and export;
           provide comprehensive information about possibilities of investing in the sector of information
technologies and telecommunications in Lithuania;
           to promote the use of open source software;
           to ensure functioning of electronic payment systems;
           to create conditions to carry out customs, tax payments and income declaration procedures through
public networks;
           to create a competitive environment in the field of telecommunications and data transfer.
       On 8 November 2004, invoking Articles 4 and 98 of the consolidated version of the Treaty Establishing
the European Community and having regard to the economic policy co-ordination procedure approved by the
Cardiff European Council in 1998 the core measures of which are national reports on structural reforms, the
Government of the Republic of Lithuania approved the national reports of structural reforms for 2004, which
repeatedly stressed the purpose, already set out in the Long-term Strategy for Research and Development
approved by the Government of the Republic of Lithuania on 22 December 2003, that is to strengthen the
national scientific technological potential and to seek its most effective use to speed up country’s progress and
increase competitiveness, achieving that:
           Lithuania will become knowledge society by the year 2015;
12                                                                     VADYBA / MANAGEMENT. 2006 m. Nr. 2(11)


            The system of interaction between science and production will within the next seven years conform
to the European practice of implementation of innovations;
            General expenses on research and development from all financing sources will increase by the year
2010 up to 3 per cent of GDP, and the private expenses will amount to 2 per cent of GDP;
            Production of high technologies will increase to up to 20 per cent of GDP within the next ten years.
       The Strategy for the Development of Public Administration until 2010, approved by Government of the
Republic of Lithuania Resolution No. 488 of 28 April 2004, the aim of which is to modernise the system of
public administration, seeking to create transparent, information technology-based public administration,
oriented to results and rendering good quality services to the citizens and other persons.
       Despite great efforts of the Member States of the European Union (Lithuania including), in January of
2005 the European Commission, considering the economic progress, drew the conclusion that the growth and
productivity of Europe during the last ten years failed to meet the growth and productivity of its main
economic partners. The Commission also pointed out that when new competitive forces make European
enterprises to enlarge the scale of values, and the knowledge economy becomes more and more important,
Europe should make use of the important economic advantages in the global economy                      political and
economic stability, qualified workforce, traditions of social partnership, well developed scientific base with its
old traditions, and the willingness of the new Member States to reach the economic level of the other Member
States. When considering this issue, it was stressed that the progress achieved in the implementation of its
goals was small and therefore a new objective was set – to make Europe a more attractive place to invest,
produce and work. The European Commission stated that new reforms are necessary for the implementation
of this objective, which would improve a business environment; that it is necessary to promote research and
innovation in the key sectors, and to modernize European labour markets and social security systems.
       In order to resolve the existing problems, a strategic analysis of the current situation and tendencies has
been carried out and a draft of the strategy for using EU structural aid by Lithuania in 2007–2013 and
priorities of its implementation (hereinafter referred to as the “Strategy”) have been drawn up. It is possible to
state that the Strategy is the strategic basis of long-term strategic investment programmes – action
programmes; therefore, its main attention is focused on investment priorities. The document also sets out
general strategic investment priorities, because more detailed investment trends will be developed in the
abovementioned action programmes. It is necessary to take various actions and initiatives on purpose to
achieve the said objectives: from individual reforms of public policies and the improvement of legal
regulation to investment measures.
       It is appropriate to point out that one of the key trends of this Strategy is to speed up the development of
the knowledge economy in Lithuania. Efficient knowledge as the basis of the economy is collected and
continuously regenerated, and this economic resource is unique, because it is inexhaustible, unlike the
material resources. Collecting of efficient knowledge, its dissemination and effective use are directly related to
active promotion of innovation, entrepreneurship and creativity in all spheres of public life and economy,
establishment of favourable conditions for workforce to competitively participate in the creative economy
based on knowledge and innovation. The abovementioned document stipulates that the objectives of this
Strategy will be achieved through investing in three proposed strategic priorities: productive workforce in the
knowledge society, competitive economy and quality of life.
       Creation of knowledge society in Lithuania is a long-term priority, indicated the key investment trend
pursuant to this priority – to create society which actively participates in the labour market, whose members
continuously acquire, regenerate, expand their knowledge, capacities and skills, and efficiently apply them in
the national economy (increasing productivity of workforce is an essential precondition for the
implementation of the idea of development). Speaking about the foreseeable future, creation of knowledge
society requires active investing aimed at certain changes in several key spheres. For the implementation of
this priority, it is planned to fulfil the following main tasks:
            attracting and keeping persons in the labour market;
            development of a segment of the workforce of the highest qualification;
            more effective public administration.
       It must be noted that creation of efficiently operating (knowledge) economy and establishing of
preconditions for its functioning require not only individual skills of human beings, but other essential
prerequisites. First of all, it is a thinking country, its general government capable of maintaining the market
effective, fostering the enhancement of administrative capacities with the aim of better application of the
provisions of the EU acquis, more effective public administration at central government and local authority
level, more efficient regulation of economic activity, which helps to enhance the economic and social
VADYBA / MANAGEMENT. 2006 m. Nr. 2(11)                                                                          13

development. Equally important for creation of the knowledge economy is support provided for improved
framing, implementation, monitoring and assessment of public policy and its programmes, as well as
promoted public policy reforms, social partnership and dialogue as well as consultation with citizens and
various groups concerned. Enhancement of capacities to effectively make use of the EU structural aid
designated for Lithuania, as well as enhancement of capacities of social and economic partners is an important
aspect of administrative capacities. When using the EU structural aid, possible market distortion and negative
consequences for competition must be avoided.
       Very substantial grounds for intended economic changes are provided by an advanced and accessible
infrastructure of information and communication technology (ICT) enabling speedy and cost-efficient
dissemination of information, its use in production and rendering of services of public or private sectors. Main
attention will be focused on the development of electronic content and ICT infrastructure. The Strategy lays
down that in course of development of the ICT infrastructure, main attention will be turned to meeting the
needs of the broadband last mile connection, its accessibility, first of all, in peripheral, uncompetitive parts of
the country. It is planned to create favourable conditions for provision of public services upon co-ordination of
national information sources (registers, information systems) and ensuring the security and compatibility of the
systems of service provision. It should be noted that the development of electronic content must be understood
as the development of the totality of public services provided by the State (e-government services, e-healthcare
services), reduction of exclusion from information society, as well as promotion of the implementation of
information technologies in business, developing implementation of electronic business decisions and transfer
of business process to electronic media. The Strategy sets out the goal to create by the year 2013 the possibility
for all interested small and medium-sized enterprises, residents, public administration institutions and
establishments to connect to the broadband networks within the whole territory.
       Investments in the ICT infrastructure will help to eliminate digital difference: Lithuanian residents will
use ICT regardless of their social situation, status or geographic location. By developing information society,
public administration institutions will be able to expand the scope of e-government; new ICT-based public
services will be provided for people and business, conditions for modernisation of activities of the
Government and governmental institutions, enhancement of transparency of public administration procedures.
Development of information society will support efforts to preserve cultural identity of Lithuania: Lithuanian
consumers will be provided with opportunities to use ICT adapted to the Lithuanian environment and to find
in the Internet comprehensive information resources in the state language; the data of the cultural heritage of
Lithuania will be stored in digital media.
       Thus, we may conclude that the knowledge economy becomes the crucial factor in the growth of the
economy of the developed countries, that the advancement of knowledge-based industrial and information
technologies is an essential condition of national progress, prosperity and welfare, and that the development of
the knowledge economy and knowledge society requires not only conceptions and strategies, but also concrete
decisions and actions to be taken in the nearest future on purpose to achieve Lithuania’s progress in the global
competition.

      Conclusions
       Rapidly changing environment determines organisational changes; therefore, it is necessary to taking
into consideration many factors, which influence knowledge-based business processes. Emerging information
technologies provide new opportunities. However, in order to implement these technologies successfully,
regard must be taken of organisational culture and employee competence. In the modern information age
knowledge becomes outdated very quickly, necessitating continuous learning by an organisation. Learning and
knowledge improvement enable employees to generate new ideas and innovations, and this constitutes a
guarantee for company success. A learning organisation is capable to solve problems systematically, to draw
on its own and other’s experience, and to share knowledge effectively.
       In knowledge management the most important is not the increase of available information quantity, but
the identification of increasing quality of available information resources and interpretation capacity of human
beings. Information per se may be senseless and inappropriate, and even incomprehensible without the
context. Knowledge management encourages sharing employee experience, failures and good examples with
the group members. The essence of knowledge management is not the objects, but intangible assets,
intellectual capital, competitive advantage and innovations.
       Collecting of efficient knowledge, its dissemination and effective use are directly related to active
promotion of innovation, entrepreneurship and creativity in all spheres of public life and economy,
establishment of favourable conditions for workforce to competitively participate in the creative economy
based on knowledge and innovation.
14                                                                                      VADYBA / MANAGEMENT. 2006 m. Nr. 2(11)


      So far knowledge management is in the early stages of practical application, but a direction of its
development is already quite distinct: it will be an integrating sphere of management, oriented towards the
creation and management of intellectual capital and having to conjoin all branches of management.
      Ever-changing environment, ideas of knowledge and economics, globalisation highlight the importance
of learning not only at an individual, group and organisational level, but also at regional and national levels.
Stress is laid on regional demands, tendencies of the development of a learning region, practical use of
knowledge resources. This entire links with the specific features and conditions of the region, new ways of
thinking and conduct. Creation of a network of the co-operation in the field of knowledge, technology and
innovation management of the European regions is in process, which enhances the development of the
regions, organisational learning, exchange of information, experience, and achievements. Impacts of
leadership of organisations, culture and learning striving for a long-term competitive advantage. Knowledge
transfer systems used in the development of international networks of organisations. Creation of an electronic
platform aimed at knowledge exchange and finding of necessary information in information networks. Use of
semantic technologies in knowledge management.

REFERENCES
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