Knowledge Management and Organizational Culture - Coursework Example

Knowledge Management Question Organizational Culture Organizational culture refers to the norms and the accepted rules of engagement, either formal or informal, that affect the way the people in an organization relate with other and how they develop their working relationships. These working relationships are very useful determinants of how effective or otherwise the organization is. This is especially so with regard to knowledge management processes and structures in an organization. Culture and Knowledge Management Organizational culture is a major factor that affects the way an organization will be able to produce, create, and distribute knowledge. As Gupta and Govindarajan (2000) say, just having an information technology platform is not enough for the organization to be able to manage its knowledge base. Although, these technologies offer a platform on which the organization manages its information and knowledge, they don’t do a lot for the firm unless and until there is the right culture. Nucor Steel is one of the best examples on how positive organization culture can help the organization to create and manage its knowledge base. For instance, although the firm is not a consultancy firm, it managed to create a knowledge management system and culture, more than three decades ago when the concept of knowledge management was not that popular. This was achieved through cultivating a culture that aided knowledge creation and knowledge distribution. The first aspect of Nucor Steel’s positive culture can be seen in its hiring policy. Nucor Steel, as Gupta and Govindarajan (2000) point out, started locating its factories in rural areas where the firm could managed to hire the most formidable workforce for the nature of work it does. Secondly, Nucor Steel also came up with a very good motivational program where the employees were well enumerated. To keep the employees motivated to work towards the betterment of the firm, they were rewarded for hard work and for creativity. At the same time, whenever there was a need to reduce the employee’s salaries, the cuts were reflected not only to the manual workers but also upwards to the managers as well as the CEO. Nucor Steel used this to keep the employees motivated and well inspired. But these were not the only aspects of a positive culture that kept Nucor Steel ahead of the industry with regard to knowledge management. As one of the managers in Nucor was quoted saying, Nucor is mistake tolerant. Workers were encouraged to make mistakes in the process of learning. Nucor encouraged the employees to try new things without fearing that they may fail or make mistakes. These attitudes to learning and mistakes made it possible for Nucor steel to create an environment where employees could learn and create new knowledge (Gupta & Govindarajan, 2000). The result of this was that the firm was able to develop ways to create efficiencies which helped the firm to be ahead of its competitors. Nucor Steel did not encourage its employees to make mistakes; rather, it made mistakes tolerable as long as they are made in the attempt to make the organization better. In this regard, Nucor was one of the firms to have realized the importance of mistakes and their roles in the learning process. Question 2 Traditional Accounting Traditional accounting methods may not be able to provide proper measures of the value of a firm because they were mainly designed to measure the value of physical capital and not the intangible assets such as knowledge capital. The modern firm is way too different from a traditional firm in that most of its assets may not be tangible. For instance most modern firms have intangible assets such as copyrights, patents, trade secrets, designs, formulae, software (Horning, 2007). These assets are not easy to account for in terms of finance. To be able to measure these assets and account for them, the firm has to either modify these accounting methods or get new ones. Balanced Score Card Firms are able to use this management tool to guarantee that every aspect of the firm is addressed. The Balanced Score Card tries to balance all the needs of a firm rather than just focus on the financials. This management tool was designed with the knowledge that for a firm to succeed in the long run, its growth strategy has to go beyond just the financial growth and look for growth in other areas such as customer satisfaction, development of the knowledge base using research etc. Using this kind of accounting for the firm’s assets is a useful way to ensure that the firm is investing in all the areas that matter. In this regard, using better analysis tools such as the Balanced Score Card is more than just a way to measure the worth of the firm, but a way to identify the areas where the firm will need to improve. Such tools are future oriented, as opposed to the traditional accounting tools which are concerned with the past and the present. However, the most important thing about such tools is the fact that they have been developed with the understanding that some assets of the firm are not necessarily tangible and may not have a book value in light of the traditional accounting methods. Balanced score card and other related management tools can be used along the traditional accounting to help a firm have a complete measure of its assets. According to Horning (2007), although the traditional tools are well suited to account for and measure financial milestones of the firm, they are not able to take care of the non-tangible assets or those assets that may not have a book value. By using the balance score card, it will be possible to help the firm to keep track of its intangible assets and at the same time have an idea of what more needs to be done in order to help the firm become better. This is something that all firms should strive to gain in order to have a better grounding in the market. Question 3 The Conceptual Age and Business Strategy Pink (2006) identifies six senses which are going to be essential for businesses to survive and to have strategic edge in the conceptual age. These are as follows; Design Design is the representation of the product and the way it is packaged. What Pink is talking about here is that those firms that are creative in the design and packaging of their products will have a greater advantage. This resonates with the way I look at things because I always seem to like those goods with both good packaging and good design. I also think that many people are looking forward to have well designed goods because they are easier and fun to use. Proper packaging also creates a perceptual value of the product for most people and therefore if a business is able to give its products a good packaging, it might attract more buyers than its competitor, even if the actual quality of the product is just the same as the competitor’s. Story Pink claims that story is part of the way in which information is passed along. He recognizes this as the integration of emotion. While that is true, I personally fail to see how this is applicable to most products and therefore I may not agree with this one. Symphony Here, Pink makes one of the most important claims about how future businesses will survive. He talks about the ability of those individuals who are able to use the skills of one area to excel in another. I personally think that this is crucial because in a modern world, while specialization is important, people are always finding themselves in situations where they have to be versatile. Those who can connect the many bits of knowledge collected all over and use them in a certain area will have an upper hand. Empathy This is quite logical because firms create products for customers without necessarily having to first ask their customers what they want. Being able to know what the needs of the customers are, even before the customers know these needs, is important. A good example of a first what has done this so well is Apple, Inc. Play Pink identifies that modern firms have to include play, humor or fun in their products. I agree with this because the modern life has changed and people are usually too busy. Having products that can give functional usefulness and at the same time offer play is important. This can be seen in most modern advertisements which are funny and amusing. Meaning Right-brainers are more likely to be spiritual and to seek to seek meaning. In this regard, what Pink is talking about when talking about spirituality is not necessarily religion as it is known, but the inner desire for individuals to find the meaning of life. In this regard, right brainers are more likely to develop better products which will also help the consumers to do the same. References Gupta, A.K., & Govindarajan, V. (2000). Knowledge Managements Social Dimension: Lessons From Nucor Steel, Vol. 42, (1). MIT Sloan Management Review , pg. 71. Horning, J. (2007, April 25). Nothing is as simple as we hope it will be . Retrieved February 23, 2014, from Knowledge Accounting: Inventory, Capital, Depreciation: http://horning.blogspot.com/2007/04/knowledge-accounting-inventory-capital.html Pink, D. (2006). A Whole New Mind: Why Right-Brainers Will Rule the Future. London, UK: Penguin Group US. Read More