CIMA E1 Syllabus A. Role of the finance function - Knowledge - Notes ^{4 / 5}

What is knowledge?

Knowledge is the environment of an organisation, it is the collection of external entities and factors that have a direct effect on the way that an organisation operates.

Davenpork and Prusark

Davenpork and Prusark suggest that information is turned into knowledge by the following means

• Comparison 

  How does information about this situation compare with other known situations?

• Consequences

  What implications does the information have for decisions and actions?

• Connections

  How does this information relate to others?

• Conversation 

  What do other people think about this information?

Value of knowledge

Knowledge is probably the closest that we can get to the ultimate source of competitive advantage. 

In simpler terms, what we know is what differentiates us from others.