The Habit of Sharing and Having to Transmit Knowledge to Employees - Essay Example

Knowledge Management Case Study: British Petroleum The main purposes or goals of knowledge management system in any organization are to improve the efficiency, performance, and productivity of both the people and the organization. It is not simple knowledge sharing, exchange, or transmission but also useful outcomes of the business operation, by openly developing and applying systems, systematic models, processes, ideas to enhance decision-making structures, acquire support and conversion of knowledge applicable to decision making. Nowadays, there are a large number of techniques and models to operate an effective business, manage knowledge, evaluate its flow within the organization, enhance opportunities, and overcome challenges. Nowadays, with the support of knowledge management, numerous instruments and models of knowledge management are obtainable to organizations to acquire competitive advantage. Such development provides power to organization to manage and deal with actual business issues without difficulty. Organizations are in the habit of sharing and having to transmit knowledge to employees. However, there are challenges while transmitting important knowledge. Technology can contribute to the creation of knowledge but cannot stimulate or motivate knowledge sharing without the involvement and commitment of people within the organization. Hence, knowledge management can be viewed as either system or a model which will facilitate the development of processes to gather and share knowledge. Oil companies, like British Petroleum, operate according to the capacity and capability of its human resources, technologies, infrastructure, and natural resources. If one of the components changes, it affects the production, planning, and processes of the industry. In the present global setting, based on the technological and social development worldwide, organizations are obliged to adopt knowledge management systems as an important technique to manage the global competition and to enhance their ability to overcome challenges in their operations regardless of the organization’s size. Hence, knowledge management becomes the most important component for the oil industry. Knowledge of the top management and executives within the oil industry probable to retire in the near future, if not efficiently managed, may result in loss of knowledge or produce vast knowledge gap, particularly in the oil industry. In these circumstances, mere knowledge management can offer ways to solve knowledge loss. Oil firms, like British Petroleum, were early implementers of knowledge management and paved the way to the implementation of knowledge management. The oil industry is a global industry. Hence, oil policy in a certain location is not very dissimilar from an oil policy in other location. The challenges or problems in such a manner that the oil firms are thus, having a number of similar problems and solutions have to be transmitted, exchanged, and implemented all over the world. Knowledge management can be an actual approach to this problem in the oil industry. The competition in the oil industry leans toward technology and knowledge use and management. British Petroleum British Petroleum is widely recognized for its remarkable knowledge management system and quite plain and straightforward motto: “learn before, learn during, learn afterwards”. An important illustration of their model is the use of audiovisual to keep people in touch with specialists at the headquarters; for instance, equipment which seems to be on the brink of failing is video recorded. These can afterward be utilized as portion of a video conference carried out with a specialist. This is not only time-efficient, but also knowledge-efficient, since knowledge is mechanically or routinely gathered. This can eventually be used to enhance the equipment and/or to help the individual who encounters the same issue. Knowledge management for British Petroleum implies methodically using knowledge in the firm and using it in every new project. It suggests harnessing the knowledge within the firm to help generate business outcomes anywhere in the globe. The advantages of knowledge management involve not once committing the same error twice, arriving at each decision with regard to the total knowledge base of the company, and reducing the learning curve to the least possible extent. Knowledge management is being integrated into the business operations of British Petroleum, just like safety management and finance management. Every business project requires knowledge as the project begins, and further knowledge will be created as the project goes on. The everyday knowledge has to be taken and shared as the project progresses, and at the conclusion of the work any new knowledge has to be organized and kept for future purposes. All of these will be impossible without a knowledge management system and without individuals assuming responsibility. New functions or roles have to be made that will guarantee the best utilization of knowledge. ‘Exploration’ and ‘production’ are the two main activities of British Petroleum. Exploration requires finding suitable locations for drilling based on seismic analysis. Wells are drilled to determine profitable amounts of hydrocarbons entombed deep down. Since an oil firm is only allowed to drill on its own domain, getting the best possible domain is also critical to its profitability. This is achieved thru licensing negotiations, where the government suggests portions of the continental shelf to the oil and gas industry. Oil firms present bids clarifying what prospect they recognize in these sites and how they plan to carry out exploration and production. License negotiations are very competitive, with approvals rooted in technical expertise, and the innovativeness and reputation of firms. As soon as firms obtain domain, knowledge of the process of exploration begin to surface. The geophysicists and geologists apply their knowledge of the types of rocks that can be found beneath the ocean, and the movement of oil and gas into those rocks. Likewise, the drilling experts apply their knowledge of planning wells for the best possible outcome, and drillers apply their knowledge to drill swiftly, competently, and securely. In the production phase, when oil is discovered in profitable amounts, a huge amount of cash, effort, and time is spent in building the infrastructure to obtain and harness the resources. This is the stage when huge solid platforms and steel may have to be constructed that can stand strongly in the subterranean waters and endure natural forces. Maybe pipelines are required, as well as an onshore station. All of these require massive amount of resources, which cannot be reimbursed until the oil begins to move onto dry land. The platform engineers have to have knowledge of how to lessen costs and reinforce the competence of the platform, and the building firm has to have the knowledge of how to provide promptly to price and requirement. Once more, knowledge of the process of production is crucial. The project managers have to tap into the firm’s knowledge of how to structure and construct economical platforms in the least possible time. The drillers’ operational knowledge remains very important, and the petroleum engineers and the geologists have to know how to create knowledge of the movement of oil from a narrow range of information. British Petroleum knew that there was enormous gain to be acquired through the methodical management of this varied and massive set of knowledge. The business advantages of using a sound model of knowledge management have been essential. The management of British Petroleum argued that the huge added value in terms of profitability is a direct outcome of applying this model. A concrete case in point has been in the cost drop in the building of European retail spots: At the beginning of 1998 a challenge is set of reducing the build costs of retail sites in Europe by 10%. The Alliance (a joint venture between BP and Bovis) is responsible for the management of these activities in Europe. The Alliance was engaged in the benefits of knowledge management and invited the BP KM Team Europe. The Alliance was engaged in the benefits of knowledge management and invited the BP KM Team to help them achieve this outcome. Step change in costs was delivered in 1998 (savings of $74 million) due to the harvesting and sharing of knowledge between the project engineers in Europe. This gave BP Downstream Retail competitive advantage in the Mature European Marketplace. This knowledge is now also being leveraged on a global scale by project engineers in Venezuela, China, Poland, and Japan. Comparable cases of enhanced performance have been brought about by the British Petroleum’s use of knowledge management in expediting business streamlining, quickening entry to new retail market, boosting plant efficiency, and cultivating new oil and gas acreages. In 1997, British Petroleum established a core knowledge management team (KMT) with a vision, goals, and budget and with an interest in creating a knowledge management strategy for the company. The KMT formed a three-phase execution framework: ‘(1) to raise awareness, (2) demonstrate success through pilots, and (3) embed the methodology in the organization.’ The tenure and effectiveness of the KMT were established by their achievement against these goals and were assessed yearly by the managing heads. In 1990, the company realized that a system of both drastic and constant transformation was needed in order for the firm to endure in the competitive oil and gas industry. The core objective was to the transform how teams and individuals in British Petroleum acted or behaved so as to boost performance and differentiate from competitors. The principle for executing this system was not to inform anybody how to transform, but rather to encourage every leading business to create its own method of executing a constant change system. British Petroleum employed countless instruments to gain knowledge of effective change management. Just like any committed learning organization, British Petroleum has formulated its own methods of acquiring, retaining, and sharing knowledge. Knowledge generation or acquisition implies the knowledge gained by a company as well as that created inside it. British Petroleum grants a ‘Thief of the Year’ prize to the individual who has taken the most excellent information, knowledge, or insights in application development. The company believes that, with regard to corporate knowledge, innovation or uniqueness is less essential than practicality or value. BP exploration (BPX) was restructured into 42 independent business divisions. Afterward, British Petroleum formed the Virtual Teamwork Project (VTP), its early key knowledge management program. The objective of VTP was to promote knowledge acquisition and sharing and to encourage the business divisions to use IT instruments to boost their enterprise. The VTP was formed to allow employees to exchange or share expert knowledge and create a sense of teamwork with the workers of other divisions. Subsequently the firm implemented a chain of knowledge management programs, which produced remarkable financial outcomes for its business activities. After the effective execution of VTP, British Petroleum formed a variety of knowledge management instruments like BP Connect, After Action Review, and Peer Assist. British Petroleum was one of the first organizations to adopt knowledge management as an independent field when it formed KMT in 1997. The company formed KMT to promote and enhance the advantages of organizational learning and intellectual capital both across and within its flat hierarchical structure. Read More