What is Business Knowledge?
Business knowledge, also known as business acumen, is essential to owning, operating, and managing a business.
Notably, there are two main types of business knowledge or acumen, each with its qualities and characteristics. These two business knowledge concepts are commonly known as tacit knowledge, versus, explicit knowledge.
If you read on, each of these concepts will be explained in further detail in this article. We will also take you through how you can acquire this essential business knowledge and acumen – particularly through tertiary education. So, for further information on the different types of knowledge concepts that exist, how to acquire, learn and develop them, and why they are essential to running a business, just keep reading!
Developing Business Knowledge: Education and Qualifications
If you are interested in completing a tertiary education qualification in the area of business, it is highly recommended that you look into pursuing an online MBA program. Also known as a Master of Business Administration, an MBA degree will enable you to learn and develop essential skills and knowledge to assist you with launching and running your own business. Some of the skills you will acquire while studying for this particular degree include management communication, business analytics, strategic direction, decision-making, and analysis, as well as other essential business acumen skills. Once graduated, the career prospects available to you can include becoming a project manager, for example, or even, a business entrepreneur.
On the subject of online courses, the top reasons you should choose to study online are undoubtedly the time-saving and cost-saving benefits! By choosing to study remotely, you will save on your course delivery overheads. As such, your course fees will be lower. You will also save on transport fees by studying from home.
Types of Business Knowledge, and How They Differ From Each Other
Essentially, business acumen can be classified into two main types of knowledge. These are known as explicit knowledge, versus tacit knowledge. To clarify these concepts further:
Explicit Business Knowledge
For business knowledge to be considered to be ‘explicit’ it is essentially, information that can be taught, communicated, or passed on to organisational employees. Of course, for this to happen, the information needs to be an integral part of the company’s culture. As such, explicit knowledge will generally flow down from the top. That is to say, it will usually be set in place by managerial individuals – employees who are in senior positions within the company. In this way, senior employees who are tasked with the strategic direction and knowledge development of an organisation have a direct influence on the explicit knowledge of lower-ranked employees. Also known as ‘organisational knowledge’, this type of business acumen is therefore commonly shared by all of the employees within an organisation or company.
For example, the tone or brand voice with which external customers are communicated, from a company standpoint, can be considered explicit knowledge. Call centre staff, for example, will be trained to address customers in either a polite, friendly, and bubbly telephone manner. Alternatively, it may be better suited to a particular company’s brand voice to be firmer, more abrupt, and more concise with customers. This knowledge of how to communicate externally is, as such, something that is drilled into the psyche of these employees – thus becoming explicit knowledge.
Tacit Business Knowledge
Tacit business knowledge or acumen, on the other hand, is the knowledge that is ‘intuitive’. As such, it can be considered to be an integral part of what is known as ‘common sense’. Individuals may not even be aware that they have tacit knowledge! This is the acumen that is so inherently ingrained that we just ‘know’! For example, knowing ‘right’ from ‘wrong’ is an example of tacit knowledge. Tacit knowledge is, of course, informed somewhat by a moral code, or our values. However, deep down we all intuitively know when we are doing something right or wrong. This is also called ‘trusting your gut!’
From a business perspective, tacit knowledge is essential for ethical business practice. Intuitively knowing what is right from wrong will help guide a business owner to make ethical choices in the operation of their business. This is especially important when first establishing your business model. However, it will also serve over time in the long term, particularly when faced with difficult and compromising business decisions. It always pays to stick with your moral compass, your values, and your tacit knowledge – especially if you care about your business’s image and reputation.
Why Business Knowledge is Essential to Running a Business
If you do care about your business’s image and reputation – which, undoubtedly, you will – it is vital to lean on both your tacit and explicit knowledge. As mentioned, tacit knowledge or common sense is central to making good business decisions. Explicit business acumen is what will help your business run smoothly. This is especially important if you are employing staff to assist with the operation of your business. The existence and curation of explicit organisational knowledge will mean your staff will know what to do autonomously, and won’t need to ask you a million questions daily.
Admittedly, the goal for many business entrepreneurs is to have a business that runs itself. That is to say, to hire enough competent employees – who can grasp the concepts of organisational knowledge – to run the business for you, even when you aren’t there. This concept is also known as developing a passive income.
If you are a business entrepreneur aspiring to launch your own business, it pays to develop business knowledge and acumen. By developing the two main types of business knowledge – tacit and explicit, you can eventually even aim to have your business run itself!
Of course, the generation of a passive income is the end goal of many ambitious entrepreneurs. Indeed, why work yourself, when you can get other people to work for you? Of course, for this to happen, you will need to set up organisational knowledge and internal processes, as well as employ staff you can trust. That way, you can sit back, relax, and watch the money roll in!