If organizations do not adapt, they will cease to remain competitive. Knowledge networking, in which people share information with one another formally or informally. Knowledge networking can be informal, such as an instructional designer describing to a colleague new techniques for preparing an instructional simulation that she heard at a training conference. Knowledge networking can also be formal, such as an online chats with technical experts. Davenport and Prusak note that knowledge networking involves human efforts as much as technological ones.
Many people confuse knowledge management with intellectual capital.
Intellectual capital is an effort by organizations to place a financial value on its tacit and explicit knowledge. Although efforts to calculate intellectual capital are related to efforts to manage knowledge, the sole focus of intellectual capital is calculating financial value, while the focus of knowledge management is on the management of an asset. Although many parts of organizations become involved in knowledge management projects, determining methods for calculating the financial value of intellectual assets is almost exclusively an effort of the financial community. One of the key issues driving these companies is placing financial value on companies whose primary assets are intellectual, such as software and Internet companies. IBM's purchase of Lotus is a classic exemplar of this challenge.