Knowledge capital can be defined as an intangible asset of the business entity or a corporation that measures the level of skill, knowledge, experience and related attributes of the employees that have an experience of the business processes of the company. In addition to the business processes the knowledge capital also deals with the experience of the employees related to on job learning and group learning of the employees within the business. Knowledge capital is an intangible asset so it does not deal with physical assets of a business such as production, manufacturing, land and buildings. This asset focuses on the skills of the employees that they share with each other to increase their efficiency and productivity within the business instead of focusing on the physical assets. Greater the knowledge capital higher will be the chances of the company to compete effectively with its market competitors. If the employees are skilled and can access the knowledge capital of the business they will help in increasing the competency of the business.
Business entities focus on creation and management of knowledge capital as they know it is very important to manage and create knowledge capital in order to get ahead of their competitions. Business entities encourage their employees to create and share knowledge capital by creating and publishing white papers, arranging seminars and encouraging person to person communication.
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