The Use of Knowledge in Society Essay Example | Topics and Well Written Essays - 1750 words

The Use of association in Society - Essay ExampleSince the process of finale making process is heavily influenced by the type of association possessed and the type of organizations involved, the motivation for decision making i.e. the type and level of knowledge possessed by them, is of crucial significance. This essay on Use of knowledge in Society aims to discuss, analyse, and measure out the views put forward by the author, F. A. Hayek (1945) and ascertain the implications of the claims made in view of various micro-economic theories and concepts. Summary The denomination by Hayek (1945) on the use of knowledge in society discusses the various merits and influence of price mechanisms on the decision making process and role of specific knowledge as a decision-making mechanism. He states that The left over(p) character of the conundrum of a rational economic order is determined precisely by the occurrence that the knowledge of the circumstances of which we must make use ne ver exists in concentrated or combine form that solely as the dispersed bits of incomplete and frequently contradictory knowledge which each in all the separate individuals possess (p. 519). He implies that that it is humanly impossible for a single individual to possess all the relevant information to arrive at a favourable decision. The quest of individuals with regard to addressing the economic problem is hence not about applying the available information or knowledge for optimum utilization of resources but rather on the manner in which the best possible resources can be recrudesced by factor of the limited knowledge available at our disposal. Merits of the argument Product specific or consumer specific knowledge is known to help firms / organizations in maximizing their profits and sustaining their competitive positioning in the industry. The industriousness of mart oriented specific knowledge by the organizations helps firms in warding off competition and in developing impelling strategies. Critical information or knowledge regarding ones competitors such as products, prices, or policies adopted by them etc., plays a key role in producing market/ consumer oriented ideas/ products thus helping organizations in effectively provide to their target consumer/ market segment (Glazer, 1991). Such market / consumer oriented strategies developed based specific knowledge provides organizations with a competitive advantage (Barney, 1991) and helps them in succeeding regardless of the presence of negative influences / obstacles in the external environment (Jaworski and Kohli, 1993 Narver and Slater, 1990). Hayek has stressed the relevance and significance of knowledge in the development of society stating that awareness and application of specific knowledge is likely to contribute towards the overall development of the society and it is hence vital for individuals and societies to acquire and apply such knowledge for generating and maximizing their profits. Since capital is by far the most critical commentary of production in an industrial society, possession of appropriate knowledge is inevitable for enabling effective decision making in order