Knowledge-Based Decision-Making (KBDM) in management is a decision-making process that uses predetermined criteria to measure and ensure the optimal outcome for a specific topic.
KBDM is used to make decisions by establishing a thought process and reasoning behind a decision. It gathers vital background essentials to collectively increase understanding about a topic or agreed criteria.
Key elements
History of knowledge management is quite short because there was a long-time lack of consensus on what would be a good definition of knowledge management. Before starting to use knowledge management as a theoretical frame there was only know-how about thinking with knowledge. The most important key factor of knowledge management is recognizing Tacit and Explicit knowledge. Open communication between leadership and membership consists of being able to demonstrate face-to-face dialogue, exchange information and experiences, and sharing facts with one another. Each party takes turns listening and respects what others have to say. There should be regular dialogue and communication between individuals regarding the specified topic.
Dialogue before deliberation – "I must consider all the facts and examine the possible consequences". Dialogue before deliberation recommends communicating prior to demonstrating actions. It is similar to KBDM in that background information about the selected topic must be gathered and made available to all the decision makers prior to meeting or discussing the information. The storage location of materials and sources is shared so that all decision makers involved have equal access to the same information. During the duration of the discussion period, background information and facts are evaluated and discussed among the decision makers. This is done so that decision makers can use this time as an opportunity to ask questions about the specified topic and receive timely and appropriate responses. The overall purpose of these meetings is to discuss the background information, as well as ensuring each decision makers' questions have been answered, via face-to-face contact.
All decision makers have common access to information – All information involved in the KBDM process must be distributed equally to all decision makers and the sources should be stored in a mutual location to ensure the same grounds for each decision maker. It is important that all of the information provided to the decision makers have the same content.
Decisions makers exist in a culture of trust – Organizational culture comes from individual beliefs, procedures, norms, values, and meanings shared by other members in the organization. Organizational culture has an impact on an individual's behavior in various situations. "Culture" is based on the characteristics and behavior among a particular group of individuals. Corresponding to this, knowledge-based decision making tries to focus on functioning within an environment containing a variety of components, including respecting one another's decisions and listening to each other. These factors influence a culture since they can contribute to how an individual feels within the environment. This influence can be positive or negative, reducing the amount of fear and pressure put on individuals if they make a mistake. If individuals feel as though they need advice, the culture can assist individuals, since it would be normal to help each other, by reassuring as well as encouraging. In contrast, not having a culture of trust can increase the level of risk when making decisions, as individuals may take advantage of situations and be non-supportive or unwilling to give advice to others.
Advantages
Open communication contributes to increased relevant overall knowledge and understanding about the topic, doing this can limit both confusion and misunderstanding.
Dialogue before deliberation gives a clear direction of the conversation and provides an opportunity for decision makers to prepare by viewing background information founded, which can generate a better understanding of the topic involved. Decision makers are prepared for discussions as they have the chance to formulate questions and identify specific aspects of the findings and information they want to discuss or develop. The decision makers gain a clearer and rounded understanding of the topic beforehand from the background information provided.