HRM in Practice: Knowledge Management - Case Study Example

HRM in Practice: Knowledge Management Introduction In any organisation, human resource management plays acritical role in ensuring that organisation’s achieve their ultimate goal. This entails ensuring that organisation use efficient strategies to improve worker engagement. Without the input of skilled and experienced employees, organisations may not achieve success with strategies aimed at improving efficiency, performance and generating revenues. Poor HRM practices often lead to failures with most strategies that organisations implement. This often result from rigidity and the inability to adapt to new changes. An improved performance in any organization is influenced by a number of factors that includes the organisational structure, skill and experience of the employees, incentives and attitude of employees towards work. The organisational structure is important in the sense that, the type of the structure that an organisation embrace, influence the functions of employees within an organisational setting. While some organisations prefer a hierarchical structure, other organisation view heterarchical structure as appropriate to use in a competitive, and a constantly changing business environment that requires innovativeness. Conversely, skill and experience is vital for HRM practices in the sense that, organisations rely on skills and experience of employees to improve performance and revenue. Further, incentives given to employees is a means in which the human resource management can reward employees for their hard work within the organisation. Attitude of employees towards work, means that the human resource management should develop practices that ensure employee’s grievances are resolved. Employee’s attitude has an impact on organisation’s performance because attitude towards work can impact positively or negatively on performance. For example, high employee turnover rate is sometimes associated with the attitude of employees in regard to discontent with how they are treated by the management (Stonehose & Minocha 2008, p.25). This paper explores organisational knowledge management necessary to deal with the contemporary HR issues affecting most organisations. Case Study of Nike’s Knowledge management in its Asia plants in China and Vietnam As a company dealing in the manufacture of sportswear, Nike has branches spread across the globe. This ensures that the company cuts on production expenses and easy accessibility of products by prospective customers. However, the setting up of branches in other parts of the world other than the company’s headquarters means that, the company has to improve knowledge and skills of employees. In branches set up in Asia and Africa, HR issues that Nike faces include inexperience among the workforce and this requires the HRM to come up with strategies to improve worker’s skills. Since Nike set up a factory in China and Vietnam, the major issue that the company’s HRM has to grapple with, involves working with a semi-skilled labour force. In addition, employees are not happy with the working conditions and this impacts on their performance. Since most companies are moving their production to Asia because of cheap labour and availability of raw materials, the labour market in Asia has turned competitive and employees are demanding for an improved work environment. This includes improving their skills through training, sharing of information and greater autonomy for employees. On the other hand, Nike is facing fierce competition from companies such as Adidas and Puma. As such, knowledge and skill is important in the organisation to improve innovation and differentiation strategies (Stonehose & Minocha 2008, p.28). Organisational knowledge as an influencing factor in dealing with HR issues As a result of globalization, many organisations face numerous challenges that is caused by a competitive and complex business environment. Globalization has created a situation where businesses have to review their strategies on frequent basis. The contemporary business environment is more liberal, technology is advanced and more flexible organisational structures have been developed. In order to remain competitive, organisations have to be sharp and adapt to the changing trends in the market (Akbar & Tzokas 2013, p.1592). Customers on the other hand, are more sophisticated and demand for improved products. In addition, employees are asking for more autonomy to practice their skills within the organisational set up. As a result of a fierce competition in the market, it is important for businesses to improve their performance, and knowledge plays an important role in coming up with unique ideas that gives a company the competitive advantage. This involves, coming up with new techniques that can improve the quality of products, and cut on costs while, ensuring the demands of customers is satisfied. With the advent of information technology, the business environment has shifted to knowledge economy where the management can use virtual means to interact with their employees across the globe. This for example, may involve reliance on video conferencing to interact with employees of the company spread across the globe, and to get their views in regard to how quality, performance and change management process can be improved (Akbar & Tzokas 2013, p.1602). The current business environment does not require companies to emphasise more on a hierarchical structure of management. This is because surviving in the market today, require creativity among employees of an organisation. As such, a heterarchical structure makes sense in a competitive business world that continues to witness rapid changes. This structure gives the employees the opportunity to participate in the decision making of the company by contributing their ideas on how to improve performance. The era when the management of organisations were charged with responsibility of coming up with ideas to improve performance seems outdated since sharing of knowledge is now key to improving organisational successes. As a result, organisations today prefer teamwork rather than individual input that seems rigid in terms of creativeness (Harazin & Padar 2013, p.37). Knowledge is a key factor in solving most of the HR issues present in organisations. An understanding of the market trends enable the management to come up with strategies of solving numerous problems that affects performance. As such, it is important for the management to understand what employees and other stakeholders’ need, through sharing of information. This sharing of information plays an important role when it comes to decision making that impacts on an organisation’s performance. Knowledge management further plays a role in ensuring that every employee participates in fulfilling the goals of the company. This is because, employees are given chance to contribute ideas that help to shape how an organisation is managed or operates. The management on their part, should participate actively in information sharing within the organisation in the sense that this enhances the understanding of employees in regard to the changes that are made to improve performance. Through knowledge management, the managers of an organisation can understand the skills of their employees and these skills can be integrated in the organisation’s plan to improve performance. Knowledge management also related to improving the skills of workers within an organisation. This is possible through in service training or working in teams (Harazin & Padar 2013, p.42). For instance, Nike extended its manufacturing plant to China and Vietnam where most of the workers are semi-skilled. However, to improve knowledge management, it is important for the company to transfer some of her experienced employees to the new plants in Asia to help the other employees improve on their skills. The company can also conduct workshops aimed at improving employee’s skills. Investing on R&D is also important in the sense that this improves a company’s knowledge in terms of improving a company’s production and sales. For example, investment in R& D by Nike branches in China and Vietnam ensures that the firm is up to date with the latest technology and designs in the sportswear market. This also is a key factor for Nike to maintain an advantage over competitors in the sportswear market (Harazin & Padar 2013, p.47). Improving knowledge also means that firms have to take care of their employees needs since, a demoralized workforce may not utilize their capabilities. As such, organisations need to reward employees because, it improves employee engagement. This is a matter that Nike branches in China and Vietnam needs to consider because the labour market in Asia at the present is competitive and disgruntled employees may move to other companies offering better packages. In essence the result of a demoralized workforce is poor performance and high employee turnover which in turn, affects a firm’s productivity (Lara & Palacios-Marques 2012, p.1859). Concepts related to knowledge conversion According to Nonaka (1994, p.16), two contrasting forms of knowledge exists, and this includes tacit knowledge on one hand, and explicit knowledge on the other hand. Further, the two knowledge according to Nonaka can be converted through four process that include socialization, externalization, combination and internalization. In this regard, tacit knowledge that is considered to be context specific is transferrable through socialization. This process in a practical sense may involve the knowledge captured by interacting with an organisation’s stakeholders that include for example, customers and suppliers or employees of an organisation. This tacit knowledge turns to explicit knowledge through, externalization. This involves making knowledge explicit by articulating one’s own ideas or sharing opinions to develop a deductive thinking. This process is common when employees are working in teams (Nonaka 1994, p.18). When knowledge has been made explicit within an organisation, this knowledge is then transferred through a process termed by Nonaka (1994, p.18) as combination, this may involve the reliance on information technology since explicit knowledge is presented in different forms for example, databases or documents. Combination is important in the transfer of knowledge among employees working in groups within the organisation. On the other hand, understanding of explicit knowledge and transferring this knowledge to tacit knowledge, is possible through the process known as internalization. Internalization enables each member of a group in an organisation to actualise concepts from an individual point of view (Nonaka 1994, p.26). Within an organisational setting knowledge can be created in the office space, teleconferencing, sharing ideas or opinions and subscribing to common goals or objectives. In addition, Nonaka (1994, p.32) has suggested five enablers that are associated with knowledge creation, this includes vision, strategy, structure, system and the staff or employees. Vision in essence, sets organisations towards the goal that they intend to achieve. This sets members of an organisation in exploring ideas that resonates with the organisation’s vision. Strategy as an enabler for knowledge creation drives organisations in identifying the ideal knowledge to move the organisation forward. A focus on knowledge strategy rather than product strategy ensures that organisations embrace concepts that are geared towards improving performance in a competitive market (Marley 2012, p.6). Such knowledge may revolve around sharing information on how to improve efficiency and innovation. System on its part, and as explained by Nonaka (1994, p.32), relate to the networks that can be used to manage knowledge. This may involve establishing sections within the organisation that mainly deal with identifying the potentials available in the market. This may also involve creating teams to come up with development projects, and look at how the organisation can improve its operations by planning. The establishment of networks within the organisation also plays a role in improving R&D capabilities (Marley 2012, p.5). The structure of an organisation is also an important factor in enhancing knowledge; however, this depends on the type of organisation structure that is used by a firm. In the contemporary business world, two structures are common and this incudes hierarchy and heterarchical structure. On the same note, while a hierarchy structure restricts employee’s capabilities in an organisational setting as a result of being autocratic, a heterachical structure on the other hand fosters employee autonomy within an organisational setting (Rapert & Wren 1998, p.287). As such, knowledge is better enhanced by adopting a structure that is democratic. This is because, such a structure allows employees to take part in the decision making process. Consequently, this is important in creating knowledge because, employees use their learned skills to improve the performance of the organisation. A heterarchical structure further promotes teamwork, which is also important in improving knowledge creation. This is because employees are given space to articulate their ideas on the way forward to improve performance. In addition, since knowledge is enhanced through sharing of opinions or ideas, heterarchical structure embraces teamwork, which is essential in sharing information among employees (Rapert & Wren 1998, p.302). The staff can also act as enablers of knowledge creation in particular, when managers support the sharing of knowledge within the organisation. This is possible where the middle managers in an organisation provide autonomy to the junior staff to articulate their ideas. This, further helps in the flow of information from the top management to the junior staff concerning knowledge necessary to improve performance (Ponis & Koronis 2012, p.148). How Nike can improve knowledge in its branches in China and Vietnam Since Nike is a company that deals in the manufacture of sportswear, it means that the company has to evaluate its functions on a frequent basis. This is because the sportswear market is always changing with new products introduced in the market annually. Nike’s move to the Far East is influenced by the need to cut on production costs and improve efficiency; however, there is still the need to come up with measures to manage knowledge in the new branches. This is because, most countries in Asia are developing economies, their labour market is still semi-skilled and most companies suffer losses by hiring the services of expatriates. However, the firm can spend less by improving skills among its employees in China and Vietnam (Kammani & Hundewale 2013, p.298). An ideal strategy in this sense involves organizing workshops for employees to improve their knowledge. The other alternative involves establishing an organisational structure that encourages the transfer of knowledge among employees. This while improving the knowledge base of workers, the firm also benefits in terms of improved performance. In essence, Nike should also encourage employees in the manufacturing plants in China and Vietnam to consider working in groups with a leadership behaviour that is democratic. This allows workers to improve their skills through a participatory process. In this light, the firm can identify employees with special skills, while those struggling can be taken for training to improve their skills (Kammani & Hundewale 2013, p.306). Conversely, since the company also faces a fierce competition from Adidas and Puma, it is important for its branches to focus on improving R&D capabilities. This would ensure that Nike improves on latest designs that resonates with customers. In the sportswear market, customers are now more sophisticated and demand for products that can improve their performance. In improving knowledge regarding the needs of customers, Nike should engage in conducting a market research to assist the company understand the customer’s taste and preference. This would help the company generate more revenue as a result of manufacturing products that conform to current fashions in sports. On another note, Nike can exploit technological advancement in terms of improving the presentation and sharing of information necessary to create knowledge (Sharma 2013, p.58). For instance, the American and Asian branches of the firm can share important information with each other through video conferencing. In addition, the firm can also cut expenses used to take employees for further training by using experienced staff members from Nike’s headquarter to train their counterparts in Asia through video conferencing(Sharma 2013, p.60). Under the current circumstances in the global market, supporting employees by improving their knowledge is becoming important. This is mainly contributed by the advancements in technology and the changing trends in the business environment. A continuous training and education is important to enable employees to improve skills in areas of specialisation. The improvement of any organisation depends on learning new events so as to keep updated with the latest market trends. While improving knowledge within an organisational setting, managers need also to take into consideration the needs of their employees. The morale of employees to learn new information depends on how they are satisfied with work roles. As such, managers need to relate with employees in order to understand their grievances. The employees morale can improve when they are provided with incentives are allowed to practice their skills and included in the firm’s decision-making process. Nike is still a leader in sportswear manufacture globally, but as a result of spreading its production to other parts of the world, it is important for the company to improve its knowledge management process. This ensures the company stays on top in terms of innovativeness and meeting customer demands (Linstead, Fullop & Lilley 2009, p.45). Conclusion Because of globalization, the business environment has changed significantly with more emphasis changing business thinking and adapting new technologies. As such, organisations are left with no option, but to adapt to the changing trends in the business world. In this regard, knowledge management process is vital in enabling organisations to survive a competitive and complex market. Organisations now have to established systems that can improve the transfer of knowledge to all levels of the organisation. This transfer of knowledge is important in improving performance. In essence, a firm such as Nike that is facing competition from the likes of Adidas and Puma, needs to focus on knowledge that improve worker’s skills and marketing strategy. References Akbar, H &Tzokas, N 2013, ‘Charting the organisational knowledge-creation process: An innovation-process perspective,’ Journal of Marketing Management, Vol. 29, no. 13, pp. 1592-1608. 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(1994) A dynamic theory of organisation knowledge creation, Organization Science, Vol.5, no.1, pp.14-37. Ponis, S & Koronis, E 2012, ‘A Knowledge Management Process-Based Approach to Support Corporate Crisis Management’, Knowledge & Process Management, Vol. 19, no. 3, pp. 148-149. Rapert, M & Wren, B 1998, ‘Reconsidering Organizational Structure: A Dual Perspective of Frameworks and Processes’, Journal of Managerial Issues, Vol. 10, no. 3, pp. 287-302. Sharma, K 2013, ‘Knowledge Management and its Impact on Organisations: An Assesment of Initiatives in the Industry’, Journal of Technology Management for Growing Economies, Vol. 4, no. 2, pp. 51-66. Stonehose, G & Minocha, S 2008, ‘Knowledge and Process Management’, Vol. 15, no. 1, pp. 24-31. Read More