The term knowledge management can easily create the impression that it is knowledge that is being managed.  In reality, managed are the circumstances of knowledge deployment, in particular the so-called knowledge workers in the sense of Sveiby’s taxonomy.  While knowledge management may come about as a spontaneous process, most often it is part of, or it interacts with, some strategic goal or intention. 

Considered in this article is a merger strategy aimed at strengthening the competitiveness of one of the actors.  The strategy turned out to be successful owing to a clever utilization of the concentrated knowledge (competence, know-how, skills, etc) of the new partner.  Here, knowledge and its management became the key strategic components.  Is the converse true, too?  That is, can strategy become a key component in knowledge accumulation?  For illustration and introduction, consider the following case study.

When Deloitte announced, toward the end of 2005, the results of its annual survey of the most rapidly developing technology companies in Central Europe (see www.fast500europe.com), the following ranking emerged:

It is ticklish to think of having invested 1000 euros into Pro Futuro in the year 2000 and harvested more than 22 million in 2005.   The smaller guys, too, offer their share of thrill.  Take the Slovak company ELAS, which logged a “modest” profit increase of 1070 % during the time span in point.  However, immediately after the Deloitte results were announced, ELAS was bought out by Siemens Business Services (SBS) and no longer exists as an independent firm.   The acquisition process started several months earlier, among others because the acquisition had to be approved by the anti-cartel authorities in Slovakia and in Austria.  (see www.siemens.sk/sbs).  Somewhat earlier, SBS had acquired HTComputers, an ELAS subsidiary. 

SBS Slovakia went into these acquisitions with a well-defined strategic goal in mind: to improve its position on the competitive Slovakian market.  As a consequence of the acquisition the number of SBS’s employees went up to 432 (SBS 163, ELAS 101, HTC 168).  Besides, SBS advanced from a way-down position to the third place in Slovakia among world-class giants comprising IBM, Microsoft, HP, Sun Microsystems, SAP, Lexmark, Toshiba, Filenet and others.  SBS’s advancement was possible because of the contributions made by ELAS and HTC.  Till the beginning of October 2005 (Siemens’s fiscal year runs October 1 through September 30), the combined revenue of the three companies was 2,6 billion Slovakian korunas, or 69 million euros (SBS Slovakia SKK 572 million, ELAS SKK 257 million, and HTC SKK 1806 million).  Along with this financial capital, ELAS and HTC carried along intellectual capital.    ELAS was a solution-oriented IT company focusing on document and content management systems, enterprise resource planning and operating data and time recording solutions. HTComputers was Slovakia's second-largest multivendor-oriented IT service provider.  Thus, there was a great deal of know-how, as well as relational and customer assets accumulated. 

The success of the strategy brings the question posed in the introduction back into focus.  Can a strategy for knowledge concentration and enhancement be formulated, and can it be done in a unique manner?  The readers probably have interesting answers to the question.  One possible answer will be presented in a follow-up article.