Holden Company - Knowledge Management System - Case Study Example

Knowledge Management System Name Course Tutor Date Executive Summary Named after its founder James Alexander Holden, Holden is an Australian car company that has been dominating the market for quite a long period since its inception in 1856. The company has been dominant in its production especially during the World War II. The company has been producing improved vehicles after every decade(Holden, 2007). The company strives to create lasting relationships with customers, dealers, communities, employees, union partners, and suppliers to drive their operations to success. Various environmental challenges are affecting the company both internally and externally. The company has diversified ways of dealing with these challenging situations by overcoming stiff competition produced by some other vehicle manufacturing companies like Toyota. This paper discusses Holden Company, a motor vehicle company that has been in operation for over 50 years. However, the company has recently faced challenges in its production. This paper discusses the background knowledge of this company. The paper looks at the kind of knowledge management system that the company has acquired in order to survive and sustain its operations. In the end, the paper gives solutions and recommendations for further improvement for this company. Introduction Australian Holden is a motor vehicle manufacturing industry that came into operation in 1856 as a saddler shop. In 1908, it became an automotive industry. In the year 1931, it became a subsidiary of General Motors, a vehicle manufacturing company in the US. The company’s previous name was GM Holden Limited but the current name is Holden Limited adopted in 2005. The company has its headquarters in Melbourne Victoria in Australia. The company gained its operation power during the World War II and was a major industrial force that contributed to the defense of Australia. Between 1939-1945, the company produced over 30, 000 bodies that was used between the US and Australia in the military during the World War II. The company also produced equipment such as car engines, airplanes, guns, boats, and marine engine components during the period. The company’s good history with GM has enabled the company take charge of Australian GM operations. The Company was having partial ownership of Daewoo GM in South Korea since 2002-2009. The company has diversified its production by engaging in production of much range of vehicles. Toyota, Suzuki, Nissan, badge engineered Chevrolet, and Vauxhall motors are under production with sharing arrangements of Holden Limited Company. It is also report that Holden is responsible for distribution of Opel brand in Australia. Holden managing director Mike Devereux agrees that the company has never been operating under such stiff competition locally hence its desire to intensify diversification(Holden C. , 2010). The company is aiming to maintain its 1 million annual sales but the managing director agrees that it is a stiff race with almost 62 companies chasing the spot. The company also expects to increase its shares in the stock market. The company has managed to forecast the demographic, economic, and environmental challenges like population and urban peak oil demands not forgetting alternative fuel transitions. Methodology This paper reviews the case of Holden Company with its knowledge management system. The paper looks at how the company uses its knowledge to sustain competition. Use of Knowledge management has helped the company to avoid stiff competition from other motor vehicle producers like Toyota. The paper reviews the various types of knowledge like tacit, embedded, and explicit knowledge that the company uses in its operations. Knowledge at Holden For a company like Holden, it is important to understand both the internal and external environment of the company in order to sustain this kind of business. Knowledge is necessary for both internal and external environment. In 2010, the company expanded their Ecoline portfolio by providing Australia with energy saving vehicles and environmentally friendly machinery. The company produced their first vehicle, which is able to operate using ethanol. The Flex fuel VE series II Commodore is the most fuel-efficient car capable of operating with high blended ethanol fuel. The vehicle is efficient in the sense that it returns the consumption of diesel by 5.6 liters in ever 100km. Through knowledge, company has also made contact with Caltex in production of bio-ethanol fuels, which are 85% ethanol and 15 % petrol(Kong, 2008). The company is also in operation of creating ethanol from household rubbish. The performance in the environment for the company improved from 2010 to 2011 with the environmental overhead working on only one shift. The company acknowledges the safety of its employees. According to the 2010 financial report, the company recorded a reduced rate of injury by 0.88% compared to 1.11% of the previous year. Safety measures are increasing due to the safety management that is provided to the staff through the management systems available at the Company. The company has been enjoying good relationship with the workers. The company was able to employ 4661 people directly into their company. Genuine collaboration internationally also enabled the company to restructure internally hence the efficient and successful production of the Cruze production in 2011. The Cruze production also created additional 165 new jobs, which created a good rapport between the company and the employees. The company has made the following commitments concerning the environment for 2012; Begin production of Cruze Series II which is the most fuel efficient car made in Australia Introduce Flex fuel capability on 3.6 litre V6 Commodore models, making 100% of powered Commodore flex fuel capable. Continue with the development of monofuel LPG to improve fuel efficiency and minimize cost while encouraging sustainable development on the environment Implement a plan to reduce fleet average emissions by 20% before 2015. Reduce energy use and greenhouse emissions Reduce waste to landfill Reduce process air emission Uptake an alternative water supply Reduce energy waste and water use by 20% for every car manufactured by 2015 It is important to realize that all this is possible only due to a good knowledge system that the company has in terms of staff management. The company managed to invest so much in staff motivation in order to increase production at the company. Various knowledge systems were also developed to enhance growth in production of motor vehicles. This was done by adapting environmentally friendly mechanisms in their production. KM systems helped the company to improve its production. Explicit Knowledge Employees of Holden Company were able to derive explicit knowledge from the work they are doing. The Australian V8 market has been declining for several reasons due to significant changes in the marketing environment such as rising fuel costs and greater environmental awareness making customers to scramble for alternative sources. Ford Company stopped the production of V8 in 1982 due to its consumption and production costs. However, the Holden Company has maintained its production of the V8. The introduction of cylinder deactivation gives Holden Company a chance to realize a 3% increase of the Australian market each year. The company financial analysts are projecting that by 2015, the company will be having 30% share index in the Australian market. The company is also suggesting that the use of multimedia will help in teaching and guiding the public on how to use the vehicles and market the vehicles. Through this Holden is capable of widening its market shares within the country. Tacit Knowledge Tacit knowledge is derived from the work commitments and interaction that the staff encounters. Ford and Holden Company are trying to follow the success of foreign sales by Toyota Company through development of exports. However, the industry is still facing strong competitions from in the export markets. Domestic manufactures must brace themselves for tighter competition from overseas companies who are enjoying lower operation costs. In the next five years, the exports are expected to decline by 2.1%. On the other hand, imports will rise and will take a larger share index in the country. Importers will be reaping the benefits when the tariffs fall before the domestic manufacturers have adapted to the new products. A 2.0% increase is the projected increase in imports over the next five years beginning from now. Embedded Knowledge Most of the large companies and multinationals have cultures within their organizations. Culture helps in maintaining certain traditions, procedures, processes, and structures of most companies. Organizational culture helps in averting most competitors. For Holden Company, strict observations of rules and regulations must be observed. For the last five years, the prices of fuel and oil have been increasing. For this reason, many motorists have opted alternative sources of transport. This has greatly affected the supply of motor vehicles in the country. Analysts suggest that motor vehicle production is likely to fall by 7.6% annually(Brags, 2010). Holden employees derive their knowledge of management from the regular meetings. Strict rules and regulations also help in maintaining high productivity in Holden Company. Knowledge Usage at Holden Knowledge at Holden has been used to increase sales of different varieties of vehicles. The Australian V8 market has been declining for several reasons due to significant changes in the marketing environment such as rising fuel costs and greater environmental awareness making customers to scramble for alternative sources. Ford Company stopped the production of V8 in 1982 due to its consumption and production costs. However, the Holden Company has maintained its production of the V8. The introduction of cylinder deactivation gives Holden Company a chance to realize a 3% increase of the Australian market each year. The company financial analysts are projecting that by 2015, the company will be having 30% share index in the Australian market(Wold, 2008). The company is also suggesting that the use of multimedia will help in teaching and guiding the public on how to use the vehicles and market the vehicles. Through this Holden is capable of widening its market shares within the country.The company honors its employees and has made the following pledges in relation to good harmony within the working stations; To company wants to implement initiatives to make Holden a working place of choice The company is willing to increase the employee engagement by 5% The company is also willing to continue with the drive in performance based culture with transparent communication and increased variable pay for each employee The company is also willing to improve its collaboration with trade unions in all its branches and negotiate for new enterprise agreements. Creators of Knowledge Holden is a large company and therefore relies on knowledge from different processes. Amongst the creators of knowledge are the engineers who are engaged in active research. The engineers have been doing great work and have come up with the latest technology and production. For example, the productions of Ecoline vehicle that use ethanol are some of the new knowledge that employees of Holden create. Users of Knowledge Users of the different knowledge management systems at Holden are the employees and the rest of the staff. For example, the engineers use the knowledge to develop new mechanisms and new design of vehicles that attract customers. They also use their knowledge to produce vehicles, which are environmentally friendly. Staff and other employees also use varied kind of knowledge in their areas of operations. Managers are using knowledge management to instill culture and rules within the organization. It is evident that the continued use of this knowledge has helped Holden Company to beat stiff competitors like Toyota in motor vehicle production. Custodians of Knowledge Holden Company is the custodian of the knowledge that it acquires. This knowledge must be stored under tight security and patent obtained in order to avoid stiff competitors from acquiring the tricks and security systems, which might be used against the company. Such cases have been seen in rival companies such as Apple and Samsung. For this purpose, Holden Company reserves the right for protecting any form of knowledge that it develops. This is aimed at protecting the company’s interest. Conclusion In conclusion, knowledge management system has played a big role in ensuring that Holden Company improves its production especially by producing environmentally friendly vehicles. The company produced their first vehicle, which is able to operate using ethanol. The Flex fuel VE series II Commodore is the most fuel-efficient car capable of operating with high blended ethanol fuel. The vehicle is efficient in the sense that it returns the consumption of diesel by 5.6 liters in ever 100km(Holden C. , Environment and Community, 2012). Recommendations Holden Company needs to develop more of the environmentally friendly vehicles, export them to poor countries, and help avoid environmental degradation. There is also need for the company to improve its cultural relationship and strengthen its relationships with other related companies for efficiency ad affectivity. Key findings and Observations from Holden Holden company has several knowledge management systems that are in operation The use of knowledge management systems has helped avert competitions for Holden Company The implementation of knowledge management created new models of vehicles such as the Ecoline vehicles which uses methanol and are considered as environmentally friendly Despite so many compliments, the knowledge management system has to do a lot of research and expand its operations to poor countries and enable them afford the new models of vehicles. Bibliography Brags, D. (2010). The market Planning Guide 6th Edition. Nearborn USA: Dearborn Publishers. Holden, C. (2010). Holden Business Report. Melbourne Victoria: Holden. Holden, C. (2012, February 16). Environment and Community. Retrieved 2012, from Holden: www.holden.com.au Holden, G. (2007, April 27). Holden Facts. Retrieved 2012, from Holden Facts: www.holden.com.au Kong, H. (2008, May 20). HSV launches new version of sportswagon. Retrieved 2012, from Sports wagon: www.drive.com.au Wold, I. (2008, April 10). Motor Vehicle Manufacturing in Australia. Retrieved 2012, from IBIS: www.ibisworld.com.au Read More