Importance of Knowledge Management System in Business - Case Study Example

IMPORTANCE OF KNOWLEDGE MANAGEMENT SYSTEM IN BUSINESS Executive Summary: - Nowadays all business concerns are very much related to ‘Knowledge Management System’. For managing each business the respective knowledge management has got much importance. They are as important as the business capital or assets of a business concern. Knowledge Management systems are considered as the energy sources required for the concerned business. They can do a lot for the developmental process of a business if it is managed properly. The business development is mainly based on the searching of the leverages of knowledge management system and its proper application. The application must be very much creative in nature and must be able to meet the competitive environments in the marketing field. All sections of a business processing can be made in a flourishing mood by relying on this knowledge management system totally. To meet the day to day affairs in the complexity of business world, the application of highly advanced knowledge management and strategy is essential. A business concern’s competitive advantage will be displayed, if advanced business talents are properly applied. All fields of business such as production increase, patent inventions, trademark decisions and product marketing can be developed considerably by considering the knowledge management system of business as business asset. In this way they can meet all challenging problems in business with great ease and make a positive turn through proper business processing. (‘Knowledge Management Software’ articlediary.com) The utility of Knowledge Management System: - Let us consider consumer products industry as an example. Among common consumer goods soaps are good going products all over the world. But this industry is highly competitive globally. Hence manufacturers cannot think about any compromise regarding the quality of the soaps producing. Customers prefer reliable products at reasonable cost. To overcome this difficulty proper application of the knowledge management system is the only alternative. Since all multinational soap manufacturing firms are employing proper knowledge management system the company’s reputation and background has certain key roles in facing the competitive nature of the business. An industrial firm having traditional reputation and solid background can develop and meet the competitive nature comfortably. Reputation is the recognition offering by the customers and users of the products. User’s positive approach towards recognition brings popularity to the concerned industrial firm. The reputation and background once formed by the concerned industry will not be lost until something negative is experienced by the users either from the products or from the policy of the concerned industrial firm. Hence it is up to the company’s responsibility to keep their product users and customers without experiencing any negative impact. In soap manufacturing industry the application of knowledge management system is highly appreciable. (‘Brand Knowledge management’, www.plm.automation.siemens.com) Background of company: - Unilever Ltd is one of the multinational consumer products manufacturing firms. Their main products are dental creams, cosmetics, personal care products, home care products and food products. All these products are very much essential for the daily requirements of people. As per the recent survey, about 2 billion people all over the world have been using their products. The company has very good track record in producing about 400 branded products which are unavoidable by people in their daily life. Among these, 14 categories are home care, personal care and food products. There is no other multinational company like Unilever which has got too much influence on people’s life. Their soaps and dental creams are too much popular in the global market. Unilever is the only company which can compete with Colgate Palmolive in the tooth paste manufacturing field. They manufacture numerous variety tooth pastes which can be utilized for various problems of gums and teeth. People have to brush their teeth both while getting up in the morning and during bed time. Hence in other words we can say that people start and end their days with Unilever products. The quality of their brands has made them kings in the field of consumer product business. All their products have capability to provide its users something more out of their life. They always concentrate in improving their products to create a rewarding experience to their customers. This is the reason as to why the Unilever products have got too much popularity globally. Yearly they spend one billion euro for the innovation of their products and production systems. They have got five laboratories all over the world for the purpose of research developments according to the new thinking and interest of people. They try to launch products with respect to the changing lifestyle and tastes of people. This is the only company which has got hearty welcome to their products both in global markets and local markets. The confidence gained by selling these consumer products enabled them to manufacture food varieties and health care products. Thus they started concentrating on diet and well being of people and made environments to children for a better healthy life. Now they have got markets in 170 countries and also support people by providing suitable jobs. Apart from company jobs numerous people prefer employments as suppliers, distributors and contractors of Unilever products. Their axe brand products are too much popular among young men who desire a better grooming. Their branded products in oral care such as Mentadent, Pepsodent and Signal are world famous and have got approval from FDI world’s largest dental federation. This federation comprises of 75,000 dentists who are the representatives of various countries. Their famous branded bath soap Lux was first launched in 1924. Even today this soap brand has got very good movement world wide. Now the annual global sale of this soap has exceeded 1billion euro. Recently they have developed a revolutionary product called Rexona crystal which is effective in removing invisible white deposits on dark colored garments. Low foaming detergents are other remarkable products launched by them. These detergents are capable to reduce the consumption of water during washing. Regarding the manufacturing of food items their famous brands are Knorr, Lipton, Bacel Flora. Knorr is being sold over 80 countries world wide. The main food varieties of this brand are noodles, soups, squashes, jams and sauces. Lipton is the well known tea brand producing from Unilever. There are various ranges of Lipton tea brands with respect to taste and cost. In North America Lipton yellow label tea is a good moving brand which later became very famous among world’s tea lovers. Bacel Flora is a dietary fiber product from Unilever which is a very good alternative to reduce cholesterol in blood. This is considered as the best cholesterol management food for over 40 years. The confidence of this product among customers has developed very good sales globally. Unilever’s other master piece product is ice cream. The unique quality of their ice cream products has created numerous customers world wide and this forced them to increase the production of ice cream considerably. Now they are one of the largest ice cream producers in the world. (‘Introduction to Unilever’ www.unilever.com) Business goals and objectives: - On account of the vast demand of their products, Unilever has been proposing to double their production in the coming years to meet the growing needs. The reason behind this growth is dedicated application of knowledge management system by the authorities of Unilever firm. Their aim is to protect nature by producing environmental friendly consumer products. They consider that by making people to use such products they can improve living standards considerably. Simultaneously they have decided to improve the quality and standards of their products and made them more customers friendly. Accordingly all these innovations are capable to attract more and more people towards their products. Moreover they want to train and educate people to develop more sustainable style of consumption of their products. Together with reliable quality, competitive pricing will help to create fresh customers for using these products. In addition to this they offer attractive discounts and complements to customers as their sales promotion plan. These are unavoidable factors to maintain reliable customer relation ship for an infinite period of time. The future performance of the organization is mainly based on this infinite relationship. Their restructuring activities are well planned and the ability to implement these plans on time is really appreciable. The way they deal environmental and physical risks, tax and legal matters, pending matters, regulatory matters etc. are typically styled and highly result oriented. Another attractive thing of their business dealings are the logo. Each icon representing their logo is very much related to their business and their commitments and services to people. They wish people to look good and feel good by the utilization of their consumer goods. (‘Our Vision’ www.unilever.com) The role of knowledge management system: - Unilever has formed knowledge community for the developmental process of the organization. The knowledge community comprises of development managers, development officers and packers buyers of various Unilever products. Certain important suppliers of their business are also included in these communities. The responsibility of these wings is to improve the speed and quality of the innovative works, implement sophisticated packaging technology, developmental process of cost effectiveness and the profitable utility of packaging synergy. In addition to this they also conduct learning and knowledge sharing from all sectors of the business. This is done in a very structured manner. Each team member has the responsibility to concentrate on business developments and packaging matters. All members of the community have to meet once in two months for consulting and assessing developments in the business. They are also authorized to propose required changes for the inevitable developments either in the business sectors or packaging sectors. Thus they can implement innovative developmental projects and submit reliable documents for the well being of the business as a whole. They conduct these sharing and assessing of knowledge and views both in success and failures of the business output. In this way they can correct setbacks and employ suitable alternatives to avoid them in future. Hence the rate of failures will be comparatively less in the marketing and business of Unilever ventures. The common methodology and approach focusing by these community groups are as follows. They consult with packaging sections to make decisions on business processing and developments and evaluate packaging skills. These community groups participate in consumer clinics for studying the upcoming needs of consumers. They seek elaborate innovations in packaging technology to compete with international standards. Another key role of this community groups is to develop suggestions and generate bright ideas. With the application of reliable networking system they are always in touch with all branches of Unilever located globally. This enables them to aware the up to date international market trend already prevailing. These community teams are provided with knowledge blocks in packaging area and there are sub teams either to support or get trained from the concerned knowledge blocks. They assist the main team in implementing the up to date technical know how and develop the packaging methodology in the company. The community groups often organize ‘knowledge work shops’ in association with the main business group in the company for creating fresh ideas and solutions for the total developments of the firm. They mainly concentrate on capability enhancements through continuous skill developments, gap analysis and essential training programs. The team has developed an intranet facility by the mutual application of tools. This facility has eased the task of knowledge sharing between the team members. The intranet facility is also applicable for the innovative processing of the entire business. The associated work of community groups has brought many benefits in the business field of Unilever Company. They could commence numerous cross business synergy projects and develop considerable savings. Moreover the community groups have improved the knowledge sharing process through extensive training and leadership quality and considerable attention. (‘The role of Knowledge management in the innovation processes’. www.apgico.pt ) The leverage of knowledge management system: - In Unilever the leverage of knowledge management system is successfully utilized. The same can be achieved by working in collaborative environments. In this way better business understanding and business superiority can be developed in a very competitive field. Thus the knowledge gained from business experience can be shared and developed with other members of that category. Leverage of knowledge management system can be availed by creating faster innovations in business ventures. This can be achieved by the faster application of knowledge through the concerned organization. Since knowledge sharing is very much important as far as the leverage of knowledge management system is concerned, elaborate arrangements should be made for acquiring and diversification of new knowledge. Another method to achieve this feat is to develop suitable and comfortable environment for expressing better thoughts and complements for achievements, threat of collapse and knowledge sharing. Above all organizational learning is very much important in achieving leverage of knowledge management system. If the organizational learning can be managed properly then the desired result can be achieved easily. If the organizational learning is not properly employed, certain obstacles may arise during the implementation of knowledge management system. Cultural sharing is one of the important factors which must be done with utmost care. Proper application of knowledge can survive this difficulty to a considerable extent. By removing cultural barriers, proper communication can be maintained and in this way knowledge sharing can be led to power gaining in the concerned organization. It is very important that the knowledge management must be able to employ properly for the entire business processing successfully. This will develop a result oriented work flow in the organization. This is how an uninterrupted business processing is brought up in the Unilever firm. They never consider the knowledge management as a separate idea. According to them the knowledge management is the effective way to achieve extensive business results. For each organization separate knowledge management is needed and the same must be designed and led by senior management personals. As far as the firm Unilever is concerned the knowledge management is the suitable device which can be utilized successfully for signaling employees and also for employee related discipline. Collaborative team effort is the outcome of this process. This is very important with respect to the leveraging of knowledge management system. (using knowledge management to leverage training and development initiatives, www.ingentaconnect.com) Institutionalization of Knowledge Management System: - The Human Resource Department in an organization is responsible for the proper functioning of knowledge management system. The main roles of Human Resource in an organization are corporate education, management of performance and culture nurturing. Culture nurturing is a process of caring, sharing and doing of culture. These are the key factors of an organization where knowledge management system has been strictly following. Moreover these constituents have significant roles in the knowledge based developmental process of an organization. In Unilever these are the key factors for the unquestionable developments of the organization. Even though the HR of an organization is featured with talent management, the same is related to knowledge management also. At Unilever the functioning of both knowledge management and talent management are very much interrelated. The functioning of talent management with respect to employees in an organization is staff recruitment, training, skill development, competency and career planning. The role of knowledge management is to leverage the collective awareness of the organization. This can be achieved by means of knowledge sharing, mutual team work and mentoring. The knowledge management should be in such a way to develop capability among individuals. When new executives are appointed in an organization tremendous training and mentoring system enable them to collect adequate knowledge about the concerned organization. Moreover they get exposed to various functions, units and geographical locations during this period. This is really a very good media for the transference of knowledge among these fresh employees. Employees are benefited from mentorship during later months. This will help executives to face challenges in their work front and enable them to work with respect to reliable and solid information regarding business. Well planned job rotations with respect to geographical locations and business developments leads to individual progress and knowledge transference. But it is not advisable for any organizations to rely on this type of knowledge transference for the developmental process of their business. In networked organization people have to play different roles for the development of business. The HR of organizations has important responsibility in developmental process through the implementation of networking system. They generally achieve this feat by sponsorship and proper employment of knowledge communities. At Unilever the employee’s training curriculum is organized in such a way to supply adequate functional developments, skills and competency in the concerned business front as a whole. In the training programs there are two important categories called learning and awareness. These two are very much interrelated. The knowledge strategies must have included in the learning initiatives and knowledge initiative are to be converged with training initiative. (‘Leveraging HR and knowledge management in a challenging economy’. findarticles.com ) Knowledge sharing practices: - The knowledge communities seen in this category are the actual authorities and applicants of knowledge. They play certain key roles in developing suitable course materials for the uplift of total business performance. For the better application of knowledge management there should be learning about the organization as a whole. ‘Bulab learning center’ in Buck man laboratories is the suitable example of this category. The intention of this laboratory is to assist employees in training and education and make them capable to move independently towards developments. Employee’s skills in business tactics need to be boosted regularly with the help of updated training programs. Creative work shops, team excellence, workouts for process improvements, practice to share knowledge management etc. can be developed considerably by updating the training programs. In the field of knowledge creation and knowledge sharing the employees can develop and gather adequate confidence for the development of business. The Human Resource department in the company can help employees in this regard by collecting information on success and failures occurring time to time. They can forward this information to the concerned training centers of the company. They can ask them either to suggest suitable ideas to boost the business or find alternatives to avoid failures in future. This type of assistance from HR not only supports the learning programs but also prevents the repetition of mistakes. Since Unilever is very much aware about the training and sharing of knowledge management, they have made elaborate arrangements to provide internal as well as external training to their employees at all their global centers. This training program enables their employees to understand their capability and potential with respect to the changing environment in the work front. In this way they can process result oriented work outs for knowledge creation, knowledge sharing and innovation in the required fields of business. To meet the challenging business events Unilever has opened numerous business related academies at their important global centers. Thus they have got marketing academy, world tea academy, ice cream academy etc. They update the training programs conducting at these academies with respect to the changing business trend of the world. The intention of these academy training centers is to develop unique business competency within Unilever for bringing infinite reliable advantages and highly profitable growth. Unilever’s training centers at UK which is located in a four acre land has developed considerably and they have been undertaking interactive training programs to achieve the updated requirements in business developments. The sharing of knowledge management can be further developed by leveraging knowledge on business properly. The process of leveraging collective knowledge can be achieved only when people can value others words and share their view points. This process mainly depends on the cultural features of the organization whereas in certain other organizations knowledge sharing is totally with respect to the individual excellence of employees. In such organizations the developments are absolutely depended on the power of knowledge. The HR of an organization can complement ideally during the institutionalization of knowledge management. They can achieve this feat by managing cultural change and thereby strengthening the mutual team work and sharing of knowledge. They can also take interest to implement rewarding system, recognition training and performance development practices among employees. This will ironically activates the process of sharing ideas, documentation of knowledge and strengthening of performance in the concerned organization. These steps are very much helpful for achieving business goals considerably. (‘Role of HR in Institutionalizing Knowledge Management in a Company’. kwork.org/white_papers/hr-km.html) Creation of knowledge sharing culture: - In the total developments of Unilever the knowledge sharing culture has got prominent roles. To boost the knowledge sharing culture they always try to recognize the achievements of their employees and provide them opportunities to develop their career. In addition to this certain valuable achievements which are capable to manage crisis in the organization are rewarded ideally. The knowledge management practitioners at Unilever never forget to reward their employees for their developmental achievements during collaboration, learning and sharing in the overall functioning of the organization. This rewarding system will definitely contribute valuable positive outcome in the developmental process of the organization. Thus Unilever gets the services of employees who are very much excellent in business related knowledge. In this way the organization can enjoy up to date business skills properly. This type of team awards is very much beneficial for creating interests and obligations among employees. These two elements are very much essential for the collaborative team efforts and knowledge sharing in the organization. In this way the knowledge sharing feature can be injected in to the culture of the employees. Unilever has got very good planning for providing awards to employees for their exceptional performance and triumphs in meeting company’s intentional objectives. According to their planning they assure recognition and awards for three different categories of achievements. The first category is achievements in proposing ideas either for economic growth or profit margin. Result oriented opinions with demonstratable prospective for future growth is the second award offering category. These opinions must also be able to create economic growth and profit margin. The third award offering category is active culture enterprise with creativity. This award is for collective team work and sharing knowledge for innovative business developments. Hence all employees related to HR department, researchers, manufacturing and distribution division and other employees in the corporate center are eligible for receiving the award. Anyone related to the business processing is also eligible for winning this award. But either their behavior or skills should have benefited the business either directly or indirectly. They must be able to design new approaches or systems for the well being of the business. In other words the reason for the unquestionable growth of Unilever may be the system of offering awards to excellent employees. (‘Role of HR in Institutionalizing Knowledge Management in a Company’ kwork.org/white_papers/hr-km.html#Example) Conclusion: - The importance of knowledge management in the developmental process of business is very much underlined in today’s world of business. The application of knowledge in the total business venture is very much related to employees of that organization. The background, reputation and experience of organizations in business front are much related to the application of knowledge management system. Since business of these days is very much competitive, proper application of knowledge management is the suitable alternative to meet the prevailing challenge. The better application of knowledge management can be achieved by institutionalization. The collaborative team work among employees can bring out the proper leveraging of knowledge management in all respects. The role of Human Resource Department in an organization is too important nowadays. They are the reliable boosters for strengthening and encouraging knowledge management system with respect to the business processing of a reputed organization. They can make employees aware about the importance of mutual understanding and collective working for the uplift of all business programs. The employee’s ideas on learning and culture transformation strengthen the application of knowledge management considerably. The role of HR is very clearly observed at this juncture. They act as the reliable mediator for the proper usage of knowledge management system. They can organize events in sharing knowledge, skill developments, competency developments, culture developments and molding of behavior. In short the proper application of knowledge management of an organization is absolutely in the hands of employees working there. Reference citations 1. 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