Knowledge Management - Essay Example

?Running Head: Knowledge Management Knowledge Management [Institute’s Knowledge Management Introduction Peter F Drucker, an influential management expert, wrote in the year 1995, “There is immense need for systematic efforts on the quality of knowledge and productivity of knowledge. Unfortunately, neither of them even defined so far. If not the very survival of companies and individuals, then at least their performance capacity would be directly impacted by these two factors in the knowledge society” (Mishra, 2009, p. 280). It was indeed, Peter Drucker who first coined the term “knowledge worker” in the year 1959. There are no doubts in the fact that the business environment of this globalised world has been changed radically due to the revolution that the world has witnessed in information technology. The marketplace has become increasingly competitive, competition is becoming cutthroat, suppliers have become intelligent, customers have become more demanding, and substitutes are increasing in number. General Electric is the only corporation which has been able to survive amongst the top 10 companies that appeared on the Dow Jones Index in 1900. Furthermore, only four out of the Fortune 500 companies of 1900 were able to make it to the 21st century (Davenport & Prusak, 2000, pp. 20-21). It appears that the marketplace is now operating on the principle that used to govern the earliest human societies, “survival of the fittest”. Alice Carol once wrote something which perfectly depicts the business environment of today. “Now here, you see, it takes all the running you can do to keep you in the same place. If you want to get somewhere else, you must run at least twice as fast as that” (Rao, 2005, p. 36). In order to ensure that organisations are “running twice as fast”, they have come up with a variety of procedures and techniques to improve their profitability, productivity and exploit all possible opportunities. Knowledge management is amongst one of them. Despite the fact, that during the past few decades, knowledge management has gained much attention from the side of experts, scholars, researchers and the corporate world, the literature reveals that authors have not been able to agree on a single definition of knowledge management (Dixon, 2000, pp. 63-64; Davis, et al., 2005, p. 308). In fact, they have not even able to develop a consensus on the definition of what constitutes knowledge. Simply put, knowledge management is a process or approach through which companies generate mutual value from the collective and individual wisdom of its intellectual knowledge based assets and ensure liberal transfer of knowledge within organisations (McAdam & McCreedy, 1999, p. 9; Davenport & Prusak, 2000, pp. 20-21). Siemens AG is a German based multinational conglomerate, with a history spread over 165 years. The company, along with its subsidiaries employs almost 0.4 million from 190 different countries. It posted revenues of over 71 billion Euros in the year 2011 as the largest Europe based Electronics Company. Amongst many things, Siemens AG is amongst one of those multinational companies which have created exemplary knowledge management systems. This paper is an attempt to explore and analyse the knowledge management processes and approaches used by Siemens AG in light of theory and literature available regarding knowledge management. Discussion In the month of July 1999, Siemens engaged in a rather bizarre exercise, where it sent 60 of its managers from the telecommunications division to south of Munich, on the shore of Lake Starnberger and gave them the task to build rafts. The raw material, which was made available to them, included steel drums, logs, pontoons, and some rope. However, the real catch was that these managers, from different countries, were not allowed to communicate with uttering a single word from their mouth (Voelpel & Han, 2005, pp. 55-56). Therefore, the communication was talking place with the help of diagrams and sentences on the flip charts. The idea of this exercise came from the senior vice president of Siemens, Joachim Doering, who was given the task to find out the solution of the tendency of senior and old age employees of the company of hoarding knowledge. His plan included using the internet to share information amongst employees all across the globe; therefore, people who give up some of their knowledge could get, or at least expect that they would get something in return (Geisler & Wickramasinghe, 2009, p. 109). At the heart of this initiative is the website named as Share Net. It is not only a search engine but at the same time; it also combines the elements of chat rooms, discussion forum and data base (Davis, et al., 2005, p. 308). Employees can continually share information which they believe would be beneficiary for their colleagues around the world. On the other hand, when faced with a problem, an employee can use Share Net to browse for topics and discussions that might provide him or her with an answer (Rollett, 2003, p. 286). Employees can contact each other through email if they believe the other person has some knowledge beneficial for the completion of certain task assigned to someone else (Christensen, 2003, p. 96-98; Davenport & Prusak, 2000, pp. 20-21). It also allowed the managers and observers to get a comprehensive picture of all the functions, tasks and responsibilities of the employees all over the world. Furthermore, it allowed employees to develop a sense of trust, teamwork, ownership, community and engagement within the company. Quite understandably, when employees felt a sense of ownership and engagement, their productivity increased significantly (Stary & Al-Hawamdeh, 2007, p. 83). In fact, the project has gone on to show direct and tangible benefits. For example in Switzerland, the company was able to win a contract worth 0.46 million US dollars for building two telecommunications networks for a hospital. The fascinating part is that its bid was 30 percent higher than one of its competitor (Dixon, 2000, pp. 63-64). The project team working on creating the proposal for this contract used Share Net to access a team of employees in Netherlands, which allowed them to convince the hospital that their proposal was more reliable than everyone else (McAdam & McCreedy, 1999, p. 99). Furthermore, training and development managers from different regions started keeping in touch with all the developments on Share Net, which allowed them to possible training needs of their employees and further enhance and improve on their training programs (Wallace, 2007, p. 30-31). In fact, in every local establishment of Siemens, regardless of their geographical location, there is “Share Net manager” whose main responsibility is to address any problems regarding the system and ensure that employees considered Share Net as an integral part of their network (Stankosky, 2006, p. 98). The Share Net manager, along with the HR department also remains responsible for Share Net Quality Assurance and Reward System through which employees are rewarded for their contribution to the Share Net system. The rewards not only include bonuses, but also include discounted or free consumer electronics products and holiday trips to other countries (Keyes, 2006, p. 89). Surprisingly enough, Siemens went a step further with its Share Net system after opening it for the internal employees it went on to even engaged selected external customers to access the discussions and data present on the website so that they could gather the insights about the technicality or products and make recommendations or suggestions. However, the real issue here is to draw a line between accessible information and confidential information, something which has held back the opening of Share Net for all external customers of Siemens (Khalilpour, 2011, p. 154). Important here to note is that this development of knowledge management came at a time, when Siemens’s problems were compounding primarily because of the slowing growth and shrinking profitability. The outlook of the global economy, due to the Asian financial crisis of 1997, appeared uncertain, and many predicted that the company would eventually have to sell significant chunks of its empire, to focus on its core business related to that of electronics and IT (Davis, et al., 2005, p. 308). One of the prime reasons for the success of Share Net is the fact that right from the start, the senior management and executives have supported all knowledge management initiatives and have put their entire support behind these activities (Mertins, 2003, p. 40). The real challenge for Siemens here would be to link employees from different parts of the world with acknowledging their cultural differences. There is a vast amount of literature available which reveals that how people from different cultures and societies perceive things differently (Coakes, 2003, p. 52; Wenger, et al., 2002, p. 96-98). Therefore, a better strategy would be to create clusters of employees which belong to similar cultures and allow them to share their insights and restrict the movement of knowledge across cultures or filter the same. The other way would be to focus on the strengthening of organisational culture because the literature reveals that when the internal culture of the company is strong, it becomes less likely for the national culture to define the behaviour of employees (Becerra-Fernandez & Sabherwal, 2010, p. 327). Nevertheless, credit should go the senior management of the company that have made great strides for ensuring that Share Net and knowledge management could become a part of the organisational culture. Recent research reveals that the same has contributed greatly towards the financial success of the company. Furthermore, with appropriate reward management techniques, employees now feel even more motivated to engage in knowledge management. However, like other organisations that have championed knowledge management systems, Siemens will have to ensure that motivation of employees to share their knowledge is not purely financial but intrinsic motivation is also at work in this regard (Mishra, 2009, p. 280; Dixon, 2000, pp. 63-64). This is important because the organisation can suffer from tough economic times where it might have to cut back on these rewards. As mentioned earlier, if knowledge management truly becomes a part of Siemens’s organisational culture then it would be the intrinsic motivational factors which would be forcing employees to engage in knowledge management (Voelpel & Han, 2005, pp. 55-56; Davenport & Prusak, 2000, pp. 20-21). 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