Question:

Essay- Managing Knowledge

Action Plan

About 2500 words.
Critically discuss the current knowledge management processes of an organization, considering both its strengths and weaknesses.

Assume the organization has decided to make knowledge management a strategic issue; that is, it will become a long-term competitive advantage for the organization. What would you have to change in your organisation for knowledge management to become a strategic competitive advantage?

When writing an Action Plan ensure that you:

a). Base your judgments on the research and findings discussed in your readings. When critically analyzing your organization don’t base your judgment on personal opinion. Your critique needs to be soundly based on evidence derived from your readings.

b). Base your suggestions for change in your organization on research derived form your readings.

c). Pay special attention to correct referencing.

Answer:

Managing knowledge

Introduction

Knowledge management is a process though which knowledge is captured, distributed, and effectively used within an organization to facilitate the adoption of specific strategic insights. This knowledge is available either in individuals or in various organizational practices and processes. Many successful organizations of today have invested heavily in knowledge management. For knowledge to be useful to an organization, it needs to be organized. The ways in which this knowledge is organized depends on its intended use. According to Addicott (2006), the practice of knowledge management is founded on four core dimensions, namely completeness, perspective, connectedness, and congruency.

Knowledge has to be created, and for this to happen, there is a need for the gaps that exist in the knowledge management practices of an organization to be identified (Wilson, 2002). When there are knowledge gaps in an organization, it becomes difficult for problems to be solved and decisions to be made. Ultimately, this acts as a hindrance to new product development. In filling up knowledge gaps, all the knowledge collected as well as the information processed needs to be put into perspective and then alternatives identified and evaluated (Stewart, 1997). The organization whose knowledge management processes are going to be explored is Wal-Mart Inc.

Overview of Wal-Mart

Wal-Mart Inc. is a US-based multinational corporation that operates a chain of discount departmental warehouses and stores across several countries. The corporation was established in 1962 and then officially incorporated in 1969. A year later, Wal-Mart started trading stock after becoming a public company.

Over the years, Wal-Mart has experienced phenomenal growth. The company has already acquired some 4,573 stores together with 730,000 associates, with these operations spanning across 14 countries. Some of the operations that are wholly owned by the company are in Argentina, Canada, Brazil, and the United Kingdom. In most of the company’s international stores, different banners are used in the operations, though they are all intended to achieve the same organizational purpose.

Wal-Mart’s knowledge management strategy

Wal-Mart has been steadfast in efforts to develop and nurture appropriate knowledge management skills as a way of improving its business performance, facilitating innovation, and gaining a competitive advantage. The main components of this strategy include mentoring programs, corporate libraries, apprenticeship programs, professional training, discussion forums, and specific adaptations of technologies relating to knowledge management. Some of the technology-oriented components include intranets, knowledge bases, knowledge repositories, expert systems, and support systems for group decision-making. Through this knowledge management strategy, Wal-Mart has managed to establish competitive advantage in the retail business industry. With this competitive advantage in place, the organization has been able to survive even in difficult economic times.

In this strategy, focus is on three forms of knowledge: personal, shared, and public knowledge. Personal knowledge is one that the individual uses mainly in day-to-day work and life settings and is the least accessible to the public. In contrast, shared knowledge is one that is held exclusively by employees for use only in workplace settings. As for public knowledge, access is through public domains such as books and the internet. At Wal-Mart, these forms of knowledge are used in different scenarios to achieve different organizational objectives.

One of the unique aspects of knowledge management at Wal-Mart is knowledge differentiation, whereby specific focus is on the three forms of knowledge. Through knowledge differentiation, the company has been able to achieve enormous productivity. This differentiation has seen the corporation grow to be an industry leader in the US as well as the only one of its type not just in the US but across the world.

However, in efforts to put in place this knowledge management strategy, Wal-Mart, like many other companies, has encountered several challenges. One of these challenges is the tendency by change management analysis to override the organizational growth of the organization. In this regard, it should be borne in mind that one of the main factors influencing the knowledge management outcomes at Wal-Mart is the big financial gains derived from the company’s annual production efforts. In this case, the core challenge has been on matching this huge financial gain with a knowledge management strategy that is equally effective.

Of all the components of the company’s strategy, improvement of employee skills remains the most critical undertaking. Without proper employee skills, the company may not be able to counter the challenges that sometimes threaten its overall corporate mission. Conversely, increased emphasis on proper employee skills has greatly contributed to enhanced efficiency in customer care and service delivery as well as retention of competitive advantage.

Today, Wal-Mart’s top executives view the level of staff productivity as a key factor in the company’s success or failure. With this understanding, the company is focusing a lot on strengthening staff and encouraging those employees with transformational leadership qualities to take over management positions. Towards this end, a lot of attention is on nurturing employee loyalty, increasing the level of diligence, and encouraging good conduct. The company feels that employees with these qualities are best placed to undertake long-term contractual engagements with the company. The presupposition here is that with a guarantee of long-term engagement, the employees and the employer alike are both going to use long-term approaches to knowledge management. In this case, reference will be to the unique organizational practices of Wal-Mart and how various forms of knowledge fit in.

Application of Wal-Mart’s knowledge management strategy in human resource management

One of the areas where Wal-Mart has directed most of knowledge management efforts is human resource management. The company is endowed with vast human resources and it was just as good that the company realized that one of the best ways to make their full potential was through the use of a clearly articulated knowledge management strategy. The human resource management (HRM) strategies of the company are designed in such a way as to ensure that all employee-related processes are properly coordinated across the vast array of branches. The effective use of these strategies has greatly contributed to an improvement in return on investments as well as minimization of the financial risks of the company.

One of the areas where knowledge management strategy has come into play is in the integration of newly recruited, highly skilled workforce with the existing workforce of the company. In this integration, there has been a need to create, distribute, and use knowledge to achieve the intended corporate objectives. In these efforts, the strategists have had refer closely to the existing human resource strategies and how they are being implemented. A sense of direction has been clearly charted through reference to the current state as far as business operations are concerned as well as the company’s future objectives and goals.

According to Zetie (2003), for success to be achievement in knowledge management efforts in a multi-branched company, the company leaders must design a knowledge management strategy that is meant for use exclusively in such a context. In this regard, the company heads would have to put into consideration the unique performance objectives, goals, and aspirations of the business organization (Ponzi, 2002). This means that there is a need to put into consideration the demands of other stakeholders as well.

Most knowledge management strategies have relatively short life-cycles, in most cases annual or half-year cycles (O’Dell, 1998). At the end of each cycle, the standard practice is for re-evaluation of progress to be carried out. This re-evaluation ensures that the strategies are in line with both the intended company objectives and that they also reflect the market situation as well as global realities. Wal-Mart has been endeavoring to put its knowledge management in line with both global realities and market situation. From a HRM perspective, the aim has been to offer guidance to employees while at the same time acknowledging the crucial role that they play for the company to continue surviving and for it to achieve its intended objectives.

Information and communication integration

Wal-mart is known for the way its international branches are interconnected by an integrated near real-time information and communication system. The company has an operational data warehouse with a capacity of 460 terrabytes. This warehouse is used for monitoring worldwide operations in a near real-time mode. The company has also put in place an extranet by the name Retail Link, whose purpose is to allow suppliers to have a clear picture of sales trends for their products.

Eventually, Wal-Mart hopes to have a full capability for conducting scan-based trading. In this system, the supplier is going to own the product until such a time when scanning is done to seal the purchase decision. This move is aimed at ensuring that the company’s inventory costs are drastically reduced. Moreover, the company is in the process of ensuring that all suppliers use RFID (Radio-frequency identification) tags on al shipments with the aim of keeping track of inventory as it is delivered into the business organization’s warehouses.

In this way, Wal-Mart has managed to create a virtual shelf space where suppliers can have a look at the sales trend for all the items that they have supplied to the company. In such a virtual space, the suppliers are able to stock those shelves and maintain all inventories just in time. In this undertaking, Wal-Mart has to collect and make use of massive data sizes to obtain a minute-by-minute picture of its business operations around the world. On the basis of the information obtained through the analysis of this data, command decisions are made from a central location.

According to Kerschberg (2010) such an approach facilitates the establishment of a ‘just-in-time’ approach to knowledge management, also known as on-demand approach to knowledge management. This approach to management is made possible by the availability of huge amounts of data and information, which necessitates the work of sifting through huge amounts of information in the search of the so-called ‘knowledge nuggets’ that are crucial for proper decision-making.

In the ‘just-in-time approach to knowledge management, the aim is to ensure that the right information is accessible to the right people at just the right time (Deery, 1994). In such a situation, these people are able to take action on the basis of that information (Currah, 2004). This approach has been used by many companies to achieve great success in the manufacturing industry, for example Toyota. Toyota has been using this approach for a long time to drive all its manufacturing processes (Rulke, 2000).

In a ‘just-in-time’ approach, an enterprise is integrated with its suppliers through optimization of businesses processes and the entire supply chain with the aim of reducing inventories (Alavi, 2010). In essence, the idea is for everyone in the chain of retail stores to view specific stores as spaces that have to be managed by specific suppliers, who will only be paid only after customers have actually purchased the products. The core concept entails ensuring that information is integrated and put in a format where interoperation among suppliers and business partners is necessary. For success to be achieved for all parties, this interoperability and integration needs to be carried out in an environment of a high degree of efficiency and transparency.

Nevertheless, this is where most of the challenges for Wal-Mart manifest themselves. For this approach to knowledge management to succeed, the information provided must be delivered in a timely manner, it needs to be trusted, and it should be tailored in such a way as to ensure that all the needs of the decision-maker have been met. In its current state, the element of timeliness has not fully been achieved. The company is yet to put in place a system that operates fully on a real-time mode. In some instances, therefore, the information sent to suppliers, partners, and associates tends to be stale or out-of-date, making it irrelevant in a certain context and for certain asks.

Moreover, both the aspects of authenticity and trust are difficult to achieve in a business-organization setting. These two elements are closely related in that there is a need for confidence on the part of the decision-maker regarding the appropriateness of the information obtained as well as the sources that yielded it (Nonaka, 1994). In the contemporary cyberspace, it is difficult to provide a guarantee of security of information. Information communicated through the internet may easily be interfered with through hacking. Wal-Mart must put in place mechanisms of ensuring that the data warehouse is not attacked by hackers and all the data altered or destroyed. The risk of hacking and cyber attacks to such a warehouse puts the company at a position of vulnerability, meaning that there is a need for a back-up system to be put in place.

Another element of the knowledge management strategy with regard to the data warehouse at Wal-Mart that has not been put into consideration relates to data provenance and data lineage. In this regard, focus should be on the quality of the original data as well as the data that has been derived. In other words, these two sets of data need to be reliable. For this reason, a lot of attention should be directed towards the methods used to process the data in order to derive information. All these issues are critically important for all decision-makers. They should be explored vigorously in order for decision-makers to have utmost confidence whenever they are making decisions relating to various products. It is for this reason that the data provider for a store as large as Wal-Mart has to be in the limelight most of the time.

Choice of technologies for Wal-Mart’s knowledge management strategy

One of the greatest challenges faced by large companies relates to the choice of technologies for use in knowledge management efforts (Nonaka, 2005). In the case of Wal-Mart, this challenge is present in the case of both human resource management and supply chain management strategies. It is difficult to make a decision that guarantees optimal creation, sharing, distribution, of information. Moreover, a major challenge relates not only to how the technology creates and distributes the information, but also to how the employees of the companies as well as other stakeholders are going to interact with the technology.

According to Aujirapongpan (2010), there is a need for companies to assess various indicators of capability as far as various aspects of knowledge management are concerned. The first aspect of this capability is the resource-based perspective. This aspect incorporates technology, structure, and culture. The second aspect is the knowledge-based perspective, and it incorporates learning, expertise, and information. Unfortunately, existing research on knowledge management is inconclusive on the issue of how best to measure these two aspects of capabilities. It is for this reason that there is a lack of precision and direction in the development of appropriate, holistic knowledge management strategies.

By and large, one of the requirements in the choice of technology for use in a knowledge management strategy, such as the one used by Wal-Mart, is consideration of the so-called ‘pull scenarios’. In this regard, various queries are posed to different heterogeneous sources, some internal and others external to the enterprise, for example the World Wide Web and the Internet (IBM Consulting Group/The Economist Intelligence Unit, 1996). In these queries, focus should be on items that are of the greatest interest to the decision-maker as well as evidence that substantiates the existing decision scenario. This evidence should be evaluated for its appropriateness in helping the decision-maker take the appropriate action.

Alternatively, the enterprise leaders may consider push scenarios, whereby delivery of content is done through syndication, for example, through specialized subscription services (Durcikova, 2004). A decision-maker may search for content that relates to his profile as well as the alerts that have been delivered to the preferred device. In other words, it is evident that a crucial component of knowledge management from the ‘just-in-time’ perspective is meta-data, that is, data about data. In the area of meta-data, Wal-Mart seems not to have achieved full potential, hence the need for improvement.

Conclusion

In summary, this paper has explored the subject of knowledge management process with reference to the case of Wal-Mart. One of the main strengths the knowledge management processes of this business is knowledge differentiation, whereby three key forms of knowledge are identified, namely, personal, shared, and public knowledge. These forms of knowledge have been applied appropriately in HRM as well as in the integration of information and communication systems.

The integration of product information has facilitated the establishment of a near real-time system, where both suppliers and company managers can track the movement of goods, from shipping to entry to the warehouse, up to the point where they are purchased by customers. This is where the biggest weakness of Wal-Mart’s knowledge management strategy is. If I was in charge at Wal-Mart, I would change the system so as to ensure that it functions in fully real-time mode. In this way, the decisions made on the basis of analysis of this data would be accurate.

 

References

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