Power of knowledge in business worlds Essay

As Francis Bacon said, Knowledge is power ( Liao, 2003 ) . Knowledge has been a topic of doctrine for centuries. It is disputing to develop accurate definitions for cognition and argument on its anatomy. Generally, cognition is made up of both informations and information.

Data is normally natural symbols, alphabets and Numberss that simply exist and have no significance beyond its being. Data represent objects, events and/or their belongingss ( Nunamaker, Romano and Briggs, 2001 ) . Raw informations are deficiencies of context and does non hold significance in and of it, nor does it hold any meaningful dealingss to anything. However, informations are bearers of information where information can be stored or transferred ( Kock, McQueen and Corner, 1997 ) . Hence, this brand informations indispensable as it is the basic structural and functional unit of all information.

On the contrary, information consists of organised informations and presented in a significance mode, in the signifier of relationships, chronologies or constructions. Information is a representation, an lineation, study, or giving signifier. It is a set of informations that has been given significance, to the receiver, through relational associations ( Nunamaker et al. , 2001 ) . Therefore, we regard information as meaningful, utile informations, and larning approximately information as the procedure of giving signifier to informations ( Bierly, Kessler and Christensen, 2000 ) .

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Knowledge is information organised into meaningful forms where these forms are more than mere dealingss as they demonstrate a completeness and consistence of dealingss and to make their ain context ( Nunamaker et al. , 2001 ) . Knowledge is contextual information, values, framed experience and adept penetrations that provides a model for measuring and integrating new experience and information ( Yahya and Goh, 2002 ) . While information is being descriptive, where it refers to the past and present, cognition is saliently prognostic, where it provides the footing for the anticipation of the hereafter with a grade of certainty, based on information about the past and present ( Kock et al. , 1997 ) . In a nutshell, informations are organized sequence of points or events, information is a context-based agreement of points by dealingss between these informations, and cognition is the opinion of the significance of events and points, which comes form a peculiar context and/or theory ( Koh, Gunasekaran, Thomas and Arunachalam, 2005 ) .

Differences of informations, information and cognition can merely be discovered through external agencies or from user s point of perceptual experience. Table 2 1 briefly outlines the differentiations of the three constructs. Data and information are frequently distinguished based on their presentation whereas information and cognition are distinguished based on reading of receiver ( Bhatt, 2001 ) . Although the constructs of informations, information and cognition are three distinguishable and abstract entities, they are seamlessly integrated. They can be seen as bing on a individual continuum ( Koh et al. , 2005 ) . Figure 2 1shows the data-knowledge continuum.

Table 2 1: Differentiations of the three entities

Entity Description

Data Raw facts

Information Meaningful, utile informations

Knowledge Clear apprehension of information

Beginning: Bierly et Al. ( 2000 ) . Organisational acquisition, cognition and wisdom. Journal of Organisational Change Management, 13 ( 6 ) , 595-618.

Figure 2 1: Datas and Knowledge Continuum

Beginning: Probst, Raub and Romhardt s ( 2000 ) survey as cited in Koh et Al. ( 2005 ) The application of cognition direction in call Centres, Journal of Knowledge Management, Vol. 9, No. 4, pp. 56-59.

In many literature, research workers divide knowledge into two chief countries ; tacit and expressed cognition. Polanyi proposed the cognition duality of explicit and silent dimension back in 1950s ( Li and Gao, 2003 ) . Tacit cognition is defined as non-verbalised, intuitive and unarticulated, action-based and unformulated, extremely personal and difficult to reassign. It is the personal cognition used by persons to execute their work and accomplishable through personal experience but can non, or hard, to be articulated ( Mohamed, Stankosky and Murray, 2006 ) . Another signifier of silent cognition, inexplicit cognition, is the sort of cognition that is shared and comprehend by people or community who are either unwilling, or unable to show it explicitly ( for case, due to cultural factors ) without a proper infinite ( Li and Gao, 2003 ) . There are two dimension of silent cognition ; i.e. proficient dimension, which comprises of informal personal accomplishment sets or trades ( frequently referred to know-how ) and cognitive dimension, that encompassed belief, values, theoretical accounts and scheme ( Civi, 2000 ) .

On the other manus, explicit cognition is touchable, clearly stated and dwelling of inside informations, which can be recorded and stored. Explicit cognition is formalised and written, expressed in the signifier of informations, verbal, diagrams, scientific expression, specifications, manual, or text editions. Knowledge of such class is transferred easy in community and accessible by others as it is codified and stored in different depositories. Differences in both school of cognition can be best described in an illustration of architecting a sculpture. Explicit cognition for design covers templets and practical geometric impression that Masons and craftsmans would utilize to explicate, program and put to death the undertaking whereas silent cognition in this activity would include workmanship such as the artisan s cognition of how difficult to hit a rock without checking it. While objectiveness is the trademark of expressed cognition, silent cognition is characterised by subjectiveness ( Sivakumar and Roy, 2004 ) . Table 2 2 depicts the differences between the two types of cognition.

Table 2 2: Differences between the two types of cognition

Tacit Knowledge ( Subjective ) Explicit Knowledge ( Objective )

Knowledge of experience ( organic structure ) Knowledge or reason ( head )

Coincident cognition ( here and now ) Sequential cognition ( there and so )

Analogue cognition ( pattern ) Digital Knowledge ( theory )

Beginning: Nonaka and Takeuchi s ( 1995 ) survey as cited in Perez and Pablos ( 2003 ) . Knowledge Management and Organisational Competitiveness: A model for human capital analysis. Journal of Knowledge Management, 7 ( 3 ) , 82-91.

Although there is a differentiation between tacit and explicit cognition, they are non reciprocally sole to each other ( Gao, Li and Clarke, 2008 ) . Knowledge moves from tacit to explicit, vice-versa, and any other combinations. In 1994, Nonaka established a theoretical account of cognition creative activity where cognition are interacted and interchanged among world in their originative activities. By and large, the theoretical account discussed four different manners of cognition transition theoretical accounts as illustrated in Figure 2 2.

Nonaka ( 1994 ) postulated that cognition is created through diffusion between tacit and expressed cognition in four different dimension of cognition transition: ( 1 ) from tacit cognition to tacit cognition, ( 2 ) from explicit to explicit cognition, ( 3 ) from tacit to explicit cognition, and ( 4 ) from explicit to tacit cognition.

Figure 2 2: Four manners of cognition transition

Beginning: Nonaka, I. ( 1994 ) . A Dynamic Theory of Organisational Knowledge Creation. Organisation Science, 5 ( 1 ) , 14-37.

Tacit cognition to tacit cognition, is besides called socialization, is a procedure of sharing experiences which creates tacit cognition, such as shared mental theoretical accounts and proficient accomplishments. The important note here is that a scholar can get silent cognition without spoken address. Apprentices work with their wise mans and discover workmanship through observation, imitation, and pattern, in add-on to verbal instructions.

Tacit to explicit cognition, or externalization, is a cognition creative activity procedure where tacit cognition becomes expressed, taking the forms of metaphors, analogies, constructs, expression, specifications, hypotheses or theoretical accounts.

Explicit cognition to explicit cognition, combination, involves uniting different organic structures of expressed cognition. Persons exchange and combine knowledge through exchange mechanisms, such as meetings and telephone conversations. The reconfiguring of bing information through arrangement, adding, reorganizing, and reapplying of expressed cognition can take to new cognition.

Explicit cognition to tacit cognition, besides referred as internalization, is a procedure of incarnating expressed cognition to tacit cognition. This flux is similar to on-the-job ( OJT ) preparation in commercial scene. Explicit cognition created is shared throughout an administration and converted into silent cognition by persons through internalization ( Nonaka, Toyama and Konno, 2000 ) .

In the knowledge-creating administration, these four conventions exist in dynamic interaction and organize a spiral of cognition ( Nonaka, 1991 ) . Knowledge created through each of the four manners of cognition transition interacts in the spiral of cognition creative activity ( Nonaka et al, 2000 ) . Figure 2 3 shows the four manners of cognition transition and the germinating coiling motion of cognition through the SECI ( Socialisation, Externalisation, Combination, and Internalisation ) procedure.

In the spiral of cognition creative activity, the interaction between tacit and expressed cognition is amplified through the four manners of cognition transition. This coiling grows as it hikes through the ontological degrees. Discovery of cognition through the SECI procedure can trip a new spiral of cognition creative activity, spread outing horizontally and vertically across administration.

Figure 2 3: SECI Procedure

Beginning: Nonaka et Al. ( 2000 ) . SECI, Ba and Leadership: a Unified Model of Dynamic Knowledge Creation. Long Range Planning, 33 ( 1 ) 5-34.

Nonaka ( 1991 ) represent the flow by mentioning Ikuko Tanaka s instance in Matsushita. First, she learns the secrets of the Osaka International Hotel baker, through socialization. Then, she transforms them into explicit cognition where she can joint to her squad members at Matsushita. Subsequently, her squad standardises this information, interpret it into workbook and unite it in a merchandise. Finally, they successfully internalise their ain tacit cognition depository through the experience of making a new merchandise. In this context, they understand in an intuitive manner that merchandises like the place bread-making machine, can supply professional quality staff of life.

Then, the spiral of cognition boots off all over once more to a higher degree. The new tacit penetration about echt and superior quality, developed in planing the place bread-making machine, is informally disseminated to other Matsushita employees. They adopted it to explicate tantamount quality criterions for other new Matsushita merchandises, whether family contraptions or audiovisual equipments. In this manner, the administration s cognition base grows broader in a long tally.

The power of cognition is a really of import resource for continuing valuable heritage, detecting new topics, deciding jobs, making nucleus competences, and originating new state of affairss for both single and administrations now and in the hereafter ( Liao, 2003 ) . In the age of rapid cognition enlargement, external and internal cognition beginnings are available in copiousness ( Tsai and Lee, 2006 ) . In concern vocabulary, inquiries of how cognition is being assimilated to a competitory advantage are frequently asked. To profit from cognition, it, foremost, have to be managed. This is where cognition direction comes into mankind s history. So, where did knowledge manage come from?

2.2 Development of Knowledge Management

History of pull offing cognition goes back to the earliest civilizations ( Wiig, 1997a ) as rational observation indicates that cognition has been pursued every bit long as records of human activities are available. In the forth century BC, Aristotle noted All work forces by nature desire cognition ( Bogdanowicz and Bailey, 2002 ) .

In the unwritten tradition, pre-writing epoch, cognition are transferred by oral cavity to ear. Although there was no structured and proper method of managing, hive awaying and sharing cognition at that clip, relevant cognition was passed on from coevals to coevals ( Cheng, 2002 ) . For 100s of old ages, proprietors of household concerns have passed off their commercial wisdom to their kids, maestro craftsmen have fastidiously taught their trades to learners, and workers have exchanged thoughts every bit good as know-how on the occupation ( Hansen, Nohria and Tierney, 1999 ) . The earliest lasting illustration of action to record and circulate cognition was foremost demonstrated in China, before AD 220, utilizing woodblock printing technique for publishing text, images or forms on fabric. There is besides the cuneiform of Sumer and Akkad that used a wooden stylus on adust wet clay ( Ives, Torry and Gordon, 1998 ) . Then, innovation of alphabetic authorship came parallel with developments in the engineerings of entering media and devices. Hence, sheer measure of cognition, such as literary and academic plants, steadily increased with the development of papyrus where they are easy recorded and transported.

Knowledge direction has been studied and practiced by philosophers for centuries though the nomenclature was non widely used until terminal of twentieth century. Wiig ( 1997b ) high spots that historic developments may be portrayed by the undermentioned descriptive phases of dominant economic activities and focal point:

( 1 ) Agrarian Economies: activities revolved around accretion and airing cognition sing hunting and assemblage activities. Through their experiences, hunter-gatherers managed to develop a high degree of comprehension in their district, such as the beginnings of nutrient, the dangers, and the chances ( Cheng, 2002 ) . Knowledge was non explicitly recognised so.

( 2 ) Natural Resource Economies: Peoples facilitate transition of natural resources to trade good and sell them to markets. Knowledge started to be recognised, within the clubs and its Masterss.

( 3 ) Industrial Revolution: During the 19th centuries, transition of natural resources and fabrication of merchandises were progressively better organised and mechanised to better the efficiency of the procedures following Frederick W. Taylor s scientific direction ( Bohn, 2005 ) . Individual workers produce as much goods as possible utilizing formalistic cognition and standardized processs.

( 4 ) Merchandise Revolution: During the first half of the twentieth century, impression of merchandise edification started to paint the history of concern. Exchange of expertness cognition between professionals and craftsmen, peculiarly in the signifier of accomplishments, addition enormously.

( 5 ) Information Revolution: During the 2nd half of twentieth century, information engineering ( IT ) became available and resulted closer control of fabrication, logistics, and selling. An overwhelming of information flows between endeavors and their providers every bit good as clients.

( 6 ) Knowledge Revolution. In the 1990s, existent footing for competition has shifted towards how good cognition and other rational assets are brought to do the administrations clients successful. This realization has led to emergence of new critical success factor, how best to function single clients. The versatility and intelligent behavior of knowing employees in an administration become the power and drivers that make it possible, to run into a broad scope of single clients sophisticated demands and modem market demands.

2.3 Review of Knowledge Management

2.3.1 Definition of Knowledge Management

Although there is a strong and undoubted involvement from the commercial universe, the term cognition direction has no universally accepted definition ( Earl and Scott, 1999 ) and no consensus about what the term truly means ( Shin, Holden and Schmidt, 2001 ; Salisbury, 2003 ) . As the academic development of cognition direction has non stabilised and filtered into the industry ( Choy, Yew and Lin, 2006 ) , research workers are invariably trying to hammer their ain definitions ( Salisbury, 2003 ) . Hence, different definitions of cognition direction in literatures, from the assorted contexts and positions, are specific to the research worker and their Fieldss ( Choy et al. , 2006 ) .

Bhatt ( 2001 ) posits knowledge direction as a procedure of cognition creative activity, proof, presentation, distribution, and application. Salisbury ( 2003 ) further accentuates that ongoing cognition direction rhythm as deployment of comprehensive system that enhances the growing of an administration s cognition by making, continuing and circulating cognition. As this rhythm continues to construct upon itself, it becomes a knowledge spiral as in the SECI procedure ( Nonaka, et. Al, 2000 ) .

Knowledge direction is a procedure that helps administrations find, choice, organise, disseminate, and reassign of import information and necessary expertness for activities, such as job resolution, dynamic acquisition, strategic planning and determination devising ( Gupta, Iyer and Aronson, 2000 ; Beveren, 2002 ) . Similarly, Horwitch and Armacost ( 2002 ) defines knowledge direction as the pattern of making, capturing, reassigning and accessing the right cognition information in order to plan better policy, modify action and deliver consequences.

O Dell and Grayson ( 1998 ) believe cognition direction is a procedure of identifying, capturing and leveraging cognition to assist the company compete. In the same manner, Singh ( 2008 ) asserts that direction of cognition is budgeting larning at an organizational degree, which can be assimilated by an administration and its members for self-renewal.

Knowledge direction is the procedure of continually pull offing cognition of all sorts to run into existing and emerging demands, to place, exploit and develop new chances ( Quintas, Lefrere and Jones, 1997 ) . Knowledge direction is to understand, and pull off systematic cognition, and consider cognition edifice reclamation, and application to maximize the endeavor ‘s knowledge-related effectivity ( Wiig, 1997b ) .

To summarize, knowledge direction are attempts designed to ( 1 ) gaining control cognition ; ( 2 ) shop cognition ( Martensson, 2000 ) ; ( 3 ) convert personal cognition to group-available cognition ; ( 4 ) connect people to people, people to knowledge, knowledge to people, and cognition to knowledge ; and ( 5 ) step that cognition to ease direction of resources and assist understand its development ( O Leary, 1998 ) . Knowledge direction can be viewed as the direction of knowledge-related activities in order to make value for an administration ( Wong and Aspinwall, 2004 ) .

In a nutshell, cognition direction will take an administration to execute better and be more competitory. The intent of pull offing and leveraging a company s cognition is to maximize the returns to the administration ( Bose, 2004 ) and prolong its fight in the planetary orientated market of today ( Ergazakis, Karnezis, Metaxiotis, and Psarras, 2005 ) .

2.3.2 Knowledge Management Framework

How to pull off cognition has emerged into an of import issue in the past few decennaries, and knowledge direction community has developed a broad scope of engineerings and applications for both academic research and practical applications ( Liao, 2003 ) . In this survey, there have been several attempts in developing models of cognition direction.

Wiig propose knowledge direction model of three pillars, as in Figure 2 4, which represents the major maps needed to pull off cognition. The pillars are based on a wide apprehension of cognition creative activity, manifestation, usage, and transportation.

Figure 2 4: Pillars of Knowledge direction

Beginning: Wiig s survey as cited in Holsapple, C. W. , and Joshi, K. D. ( 1999 ) . Description and Analysis of Existing Knowledge Management Frameworks. Proceedings of the 32nd Hawaii International Conference on System Sciences, Maui, USA.

Choo progress a wise administration model ( as illustrated in Figure 2 5 ) , where an administration uses information strategically for sense-making, knowledge creative activity, and determination devising. These three procedures are linked as a continuum of nested information activities that define an administration which possesses the information and cognition to move intelligently.

Figure 2 5: Model of cognizing administration

Beginning: Choo s survey as cited in Holsapple, C. W. , and Joshi, K. D. ( 1999 ) . Description and Analysis of Existing Knowledge Management Frameworks. Proceedings of the 32nd Hawaii International Conference on System Sciences, Maui, USA.

Van der Spek and Spijkervet place a rhythm of four cognition direction phases ; i.e. conceptualise, reflect, act, and retrospect. Gestating stage revolves around roll uping penetrations into cognition resources. Subsequently, in the contemplation phase, the conceptualised cognition is evaluated utilizing a assortment of standards, required betterments are established, and an betterment procedure is planned. During the act phase, new cognition is developed, distributed, combined, and upheld. Concluding phase ; retrospect, recognises the effects of the act phase, evaluates the consequences achieved in that phase, and compares old and new state of affairss. Figure 2 6 denotes that these phases in the rhythm are impacted by internal and external developments.

Figure 2 6: Model of cognition direction

Beginning: Van der Spek and Spijkervet survey as cited in Holsapple, C. W. , and Joshi, K. D. ( 1999 ) . Description and Analysis of Existing Knowledge Management Frameworks. Proceedings of the 32nd Hawaii International Conference on System Sciences, Maui, USA.

Leonard advocates four knowledge-building activities that surround the nucleus capablenesss ; ( 1 ) shared and originative job resolution ( to bring forth current merchandises ) , ( 2 ) implementing and incorporating new methodological analysiss and tools ( to heighten internal operations ) , ( 3 ) experimenting and prototyping ( to develop capablenesss for future use ) , and ( 4 ) importation and absorbing external engineerings. These are cognition making and spreading activities as schematise in Figure 2 7.

Figure 2 7: Core Capabilities and Knowledge Building Activities

Beginning: Leonard s survey as cited in Holsapple, C. W. , and Joshi, K. D. ( 1999 ) . Description and Analysis of Existing Knowledge Management Frameworks. Proceedings of the 32nd Hawaii International Conference on System Sciences, Maui, USA.

Petrash ( 1996 ) engenders a cognition direction theoretical account involves three types of organizational resources that are referred as rational capital: human capital, organizational capital, and client capital as shown in Figure 2 8. Human capital is the cognition that each single possesses and develops. Organizational capital is the cognition that has been recognised as the norms, procedures and civilization of an administration. Then, client capital is the sensed value determined by a client from making concern with a provider of goods and/or services. ( Holsapple and Joshi, 1999 ) . Flux of these capitals would take to value creative activity to the administration.

Figure 2 8: Intellectual capital theoretical account

Beginning: Petrash, G. ( 1996 ) . Dow ‘s Journey to a Knowledge Value Management Culture. European Management Journal, 14 ( 4 ) , 365-373.

Nonaka ( 1994 ) posits that organizational cognition creative activity, as distinguishable from single cognition creative activity, takes topographic point when all four manners of cognition creative activity ; socialization, combination, externalization and internalization, are organisationally managed to organize a continual rhythm. This rhythm is shaped by a series of displacements between different manners of cognition transition. The interactions between silent cognition and explicit cognition will be given to better and turn as more participants the administration become involved. Therefore, organizational cognition creative activity can be viewed as an upward spiral March, get downing at the single degree traveling up to the corporate degree, and so to the organizational degree, sometimes making out to the inter-organisational degree. Figure 2 9 portrays the transfusion of cognition.

Figure 2 9: Spiral of administration cognition creative activity

Beginning: Nonaka et Al. ( 2000 ) . SECI, Ba and Leadership: a Unified Model of Dynamic Knowledge Creation. Long Range Planning, 33 ( 1 ) , 5-34.

Stankosky and Baldanza developed a conceptual cognition direction model comprises of four pillars as foundation of any knowledge direction system ( Mohamed, Stankosky and Murray, 2006 ) . This is portrayed in Figure 2 10. The four pillars personify:

( 1 ) leading that, develops a concern scheme to last, vision itself to win, establishes and implements the scheme, and nourishes the civilization and clime, every bit good as interacts with the environment.

( 2 ) administration, a construction which supports scheme. The right concern procedures and public presentation direction system must be strong plenty to cover with turbulency yet flexible plenty to accommodate to alter.

( 3 ) engineering is an enabler, indispensable plus for determination support, informations repositing, procedure modeling, direction tools, and overall communications. Technology must back up the concern scheme, add value, and be measured.

( 4 ) acquisition, lessons learned are actualised to better effectivity and efficiency. It must construct from pull offing information, to constructing enterprise-wide cognition, to pull offing that cognition, to organisational acquisition and alteration.

Figure 2 10: Knowledge direction four pillars

Beginning: Stankosky and Baldanza s ( 2000 ) survey as cited in Mohamed, M. , Stankosky, M. and Murray, A. ( 2006 ) . Knowledge direction and information engineering: Can they work in perfect harmoniousness? Journal of Knowledge Management, 10 ( 3 ) , 103-116.

Firestone and McElroy ( 2005 ) presented a three-tier model ( as in Figure 2 11 ) of concern procedures and results distinguishing operational concern procedures, cognition procedures, and processs for pull offing cognition procedures. Knowledge direction is the set of procedure that seeks to alter the administration s bing form of cognition processing to heighten its results. There are two cognition procedures and cognition integrating. Knowledge production is the procedure where an administration executes every bit good as green goodss new general cognition ; and other cognition, where creative activity is non-routine. On the other manus, cognition integrating is the procedure to convey this new cognition to persons and groups in the administration Operational procedures are simply utilizing usage cognition but, apart from routinely cultivating cognition about specific state of affairss and conditions, do non bring forth or incorporate it.

Figure 2 11: Three-tier model

Beginning: Firestone, and McElroy. ( 2005 ) . Making knowledge direction. The Learning Organisation, 12 ( 2 ) , 189-212.

Each of the model or theoretical accounts references certain knowledge direction elements ; nevertheless, none of them appears to subsume all of the others. However, these models represent a congruity of many organic structures of literature including direction, organizational behavior and information systems. Therefore, successful cognition direction enterprises require a three-party position ; viz. the incorporation of people, procedure and engineering ( Bhatt, 2001 ; Massey, Montoya-Weiss, and O Driscoll, 2002 ; Gorelick and Tantawy-Bonsou, 2003 ; Cong and Pandya, 2003 ; Yang, Chen, and Shao, 2004 ; Ergazakis et al. , 2005 ; Wickramasinghe, 2006 ; Dyer, 2007 ; and Deng, 2008 ) . By and large, knowledge direction involves four cardinal stairss of making cognition, hive awaying cognition, reassigning cognition and recycling cognition. Hence, the synergism of three cognition direction kernels ; people, procedure and engineering, on the four stairss of cognition direction signifiers knowledge direction diamond as shown in Figure 2 12.

Figure 2 12: Knowledge direction diamond

Beginning: Wickramasinghe, N. ( 2006 ) . Knowledge creative activity: a meta-framework. International Journal of Innovation and Learning, 3 ( 5 ) , 558-573.

The premiss for cognition direction is based on a paradigm displacement in the concern environment, where cognition is cardinal to organizational public presentation ( Wickramasinghe, 2006 ) . Organisational cognition is form through alone forms of interactions between people, procedure and engineering, which other administration can non copy easy, because these interactions are form by the administration s alone history and civilization ( Bhatt, 2001 ) . The interactions between people, procedure and engineering has critical significance on cognition direction because trademark of interaction between engineerings, techniques, and people is alone to an administration, and it can non be traded easy in the market place. Therefore, people, procedures, and engineering are the three cardinal elements of the environment. As the concern environment becomes more disruptive and clip dependant, organizational productiveness frequently depends on an in-depth cognition of people, procedures, and engineering ( Nelson and Cooprider, 1996 ) .


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