Knowledge Intensive Firms and Knowledge Workers: A Case of Southern Company - Essay Example

Knowledge Intensive Firms and Knowledge Workers: A Case of Southern Company Table of Contents 3 Introduction 4 An External and Internal Analysis of the Organization 5 An External Analysis of Southern Company 5 Internal Analysis of Southern Company 6 Statement of the Knowledge Management in relation to Southern Company 7 Presentation of the Knowledge Management in relation to Southern Company 8 Explanation of the Knowledge Management in relation to Southern Company 9 Discussion of the Knowledge Management in relation to Southern Company 10 Recommendations 11 References 12 Abstract Today, Southern Company is the leader in South Eastern America, the second largest in U.S. and the eighth largest in the world employing approximately 26,000 employees. Despite the numerous opportunities and strengths presented by the natural monopolistic nature of the Southeastern market, the company experiences numerous challenges particularly those by the regulation of carbon emission and adapting renewable energy sources. The company is also known for its knowledge management prowess given its emphasis on employees training and knowledge transfers through discussions and trainings. Introduction In the United States of America, Southern Company is an electric utility that serves over 4.4 million electricity consumers. The company has four electric utilities in four different states and is a leader in U.S. electricity production. The company also owns an upcoming competitive electricity generation company, and wireless and fiber optic communications. Amongst its competitors, Southern company brands are renowned for their high quality customer services, high reliability, and below average prices for retail electricity (Goldsmith, Carter, & Institute, 2009, p. 242). For nine consecutive years, the company has ranked top in the U.S. electricity service providers, given its unmatched customer satisfactory services as rated by the American Customer Satisfaction Index (ACSI). Today, Southern Company is the leader in South Eastern America, the second largest in U.S. and the eighth largest in the world employing approximately 26,000 employees. The company operates at least 42,000 megawatts of electricity generation capacity distributed to about 4.4 million consumers in four different states that are Mississippi, Alabama, Florida, and Georgia. The company’s main source of electricity is coal and has been in operation for close to nine decades after the formation of the Southeastern Power and Light Company for Alabama’s light and power, and traction. Being a public utility, Southern Company holds stock in the New York Stock Exchange and about 500,000 shareholders. The company’s target market is mostly retail end consumers, while the surplus is sold to wholesale markets within six of U.S. Southeastern states, and is unregulated (Phillips, 2014). In order to get electricity to end consumers, Southern Company uses its transmission and distribution networks, and as of 18th November 2014, Southern Company’s market capitalization amounted to $42.7 billion. The main markets for the company’s electricity is Alabama and Georgia, while the combined market territory is over 120,000 sq. mile including Mississippi, and Florida. An External and Internal Analysis of the Organization An External Analysis of Southern Company While being a company within the US, Southern company operates in a market that characterized by competitors who pose a threat to the company market. The major competitors are Energy Corporation, NextEra Energy, Inc., and Centerpoint Energy, Inc. However, in the midst of such competition, Southern Company has the opportunity to identify and understand the business structure and strategies of competitors so as to try and capitalize on any weaknesses by staying up-to-date with recent developments and trends influencing the electricity industry (The New York Times, 2008). Other threats to the operation of Southern company are environmental regulations, and changing dynamics of energy sources. Southern Company’s major source of energy is coal. However, the global call for companies and nations to reduce their carbon footprint is posing a threat to the company since coal is one of the fossil fuels responsible for high carbon and greenhouse gases emissions. The call by the Federal Energy Regulatory Commission (FERC) for electricity companies to cut down their carbon footprint and adapt renewable energy sources to supplement their non-renewable energy sources. Like any other company producing electricity, such regulations pose a risk because electricity is a regulated product that causes the government to announce a cap and trade system where firms that omit greenhouse should pay that right in coming years. Furthermore, in a market where the government intervenes by introducing a regulated industry, political risks increase causing the government to act against the best interest of citizens. The negative by government regulations, thus cease to protect the consumers and impact environment because they are viewed as reducing the value of the affected companies, thereby increasing costs for the consumers and reduced profits for the manufacturers. Despite the threats surrounding Southern Company, the market is characterized by numerous opportunities for growth. For instance, Southern company is found in the Southeastern area of America and the area has in the recent past experienced a growth in population, thus promising an even greater retail and wholesale electricity market. In addition, Southern company has invested in renewable power generation in the form of wind power and nuclear power. Amongst the growing southeastern population and in America at large, the growing popularity of renewable energy promises even higher profits for the company. In addition, Southeastern Company possesses next generation technology for electric transition system such as smart grids. Investment in renewable energy is timely given that global initiatives now focus on fighting global warming and encouraging nations and companies to take up renewable energy such as wind turbines and other alternatives. In order to effectively produce renewable energy, Southern company has invested in high end technology and economies of scale that ensure that both the distribution and generation of electricity from renewable energy sources will raise revenue and margins for the electricity industry. The production of more power from both renewable and non-renewable sources is promoted by the presence of upcoming electric cars and other devices that increase electricity demand substantially. In the long run, renewable energy sources encourage cleaner electricity generation. Internal Analysis of Southern Company Today, Southern Company prides itself in unrivalled and in-depth knowledge regarding electricity generation and distribution as well as investment in Corporate Social Responsibility such as the response to catastrophes like Hurricane Katrina. In addition, Southern Company enjoys natural monopoly in the Southeastern area and this introduces regional barriers to entry into this region. Consequently, the Southern Company enjoys long-term positive implications on its electricity product by adding its value. Again, being the leader in electricity generation in the Southeastern region introduces a defendable qualitative element that keeps off competing and new entrants into the market since they find it difficult to overcome. In the south, Southern Company holds a strong market position characterized by high customer satisfaction making the company a leader in clean coal technology. A major limitation is that Southern Company depends on subsidiaries to pay dividends. In addition, Southern Company is differences that caused litigation regarding the erstwhile subsidiary Mirant (Phillips, 2014). Southern Company is also limited by the fact that it only has a presence in the Southeastern area of North America and, like itself, the presence of other electricity generating companies makes it difficult to penetrate into such regions. In addition, the growth of Southern company’s market base is due to the southern weather that increases electricity demand both in offices and homes. For instance, in the cold weather, electricity required to heat homes and offices comes from Southern Company, during winter. However, homes and offices in hot summers increase electricity demand for use in cooling (Phillips, 2014). The disadvantage comes from the fact that any weather changes affect electricity demand, while demand itself, within the energy sector, depends on the rise and fall in the economic activity (Phillips, 2014). Statement of the Knowledge Management in relation to Southern Company For Southern Company, knowledge management is the process by which corporate knowledge is utilized for performance improvement (Chilton & Bloodgroup, 2014, p. 285). This is a great advantage to Southern Company given that it seeks to utilize internal knowledge processes and the development of all information required to make efficient organizational department. Besides being an increasingly integral business function for Southern Company, knowledge management is a great tool for promoting competitiveness given that it seeks to facilitate effective intellectual resources management. Today, knowledge management at Southern Company is evident in the way the Hurricane Katrina in 2005 five was managed. Unlike in the previous years, 2005 hurricane Katrina catastrophe introduced challenges that were overcome using Southern Company’s investment in Knowledge management’s sharing and generation; greater accountability and participation; and the establishment of structure and culture of intense learning and communication. In addition, Southern company is characterized by skilled knowledgeable workers with the freedom to own ideas while continuously upgrading their skills, knowledge, and abilities such that they can remain in the forefront of their professional fields. Being in the forefront means that knowledgeable workers are constantly being aware of developments within their professions and disciplines, and embracing opportunities that facilitate further development of their professional growth (Chilton & Bloodgroup, 2014, p. 293). Presentation of the Knowledge Management in relation to Southern Company The investment in knowledge management at Southern company involves numerous methods. The most crucial and strategic is that of developing successors and high potential persons through development moves, job assignments, and special assignments (Goldsmith, Carter, & Institute, 2009, p. 255). Through development assignments, knowledge flow is from succession planning and management reviews supervised at any level including business unit, corporate, or operating firm. In order to develop knowledgeable workers, Southern Company invests in programs such as senior leader development program, and programs for emerging leaders. Through senior leader development programs, the aim is to minimize the development effort gap among high-potential middle managers by preparing them to move to into officer positions. The program commenced in 2008 and was also delivered in 2009 where high-potential middle managers were subjected to content aimed at examining methods of making objective and disciplined decisions; establishing strong networks of relationships; understanding how environmental, regulatory, and global capital challenges impacted the future of energy industry. Middle managers at Southern Company were also subjected to networking opportunities; presentations and discussions with executives from the company and other external leaders; and case studies (Goldsmith, Carter, & Institute, 2009). Explanation of the Knowledge Management in relation to Southern Company For the Southern Company emerging leaders, there are programs within business units and operating companies aimed at offering development programs and activities to such leaders. The aim is to elevate business leadership’s skills and acumen, elevate exposure to senior managers, and leverage opportunities for networking (Chilton & Bloodgroup, 2014). Through these programs, potential leaders are exposed to competencies such as critical thinking, planning and organizing, networking and relating, and influencing and persuading. To acquire these skills and competencies, emerging leaders are subjected to group mentoring sessions, action learning, group discussions, common education, and forums. In order to emphasis these leadership competencies, and for career development, Southern Company’s group mentoring sessions engage every employee through small groups each paired to an executive. The executive’s main role is to mentor the group while ensuring that each member seeks leadership knowledge and lessons, career growth, attainment of business knowledge and setting their own agenda. Besides promoting group sessions, common education is also common such that participants participate in a defined set of activities aimed at establishing key competencies. Action learning also allows employees to participate in projects with the intention of acquiring business leadership qualities and knowledge (Goldsmith, Carter, & Institute, 2009, p. 256). Besides being an energy producing utility, Southern company efficiently manages to invest in the power of managing smart energy by focusing on energy efficiency. Southern Company, being a utility company heavily dependent content management systems has a large IT department that utilizes large data amounts of the power it produces (Blalock, 2008, p. 22). However, the IT department at the company has invested in efficient energy use and went on to combine its two data processing centers into one, a move that seeks to lead in going green. Owing to the consolidation, Southern company minimized its square footage, utilizes lesser equipment, and depends on smaller and more efficient systems for cooling and lighting. This reduction contributed immensely in the reduction of power utilization resulting in 78% energy savings in the first year of its implementation (Blalock, 2008, p. 21). Today, Southern Company’s IT infrastructure constitutes of 1,100 staff situated in 667 locations and a budget of $330 million. Additionally, the electricity consumption at the company has reduced to a monthly consumption of 500, 000 Kilowatt each hour. Another contributing factor into the effective reduction of energy consumption is virtualization where Windows environment is used to virtualize 190 servers using 8 Dell servers and conserving about 300,000kilowatts hour while reducing carbon dioxide emissions by approximately 180 tons each three months. Discussion of the Knowledge Management in relation to Southern Company At Southern Company, it is evidently clear that the company values a knowledge management scheme where content, people, technology, and routines. For instance, the company employees provide information and receive content pieces making each person responsible for explicit management of knowledge within the organization. However, since knowledge or content to be used within any organization must be proven and standardized, Southern Company’s experts analyze what is given in the knowledge inventory. In order to get information into the knowledge management or inventory, expert analysis is followed by participatory analysis, proposal interventions, and conducting selected interferences. Content is the real pieces that hold information that can create knowledge and that require the presence of creativity and special skills to transform implicit information into explicit information. At Southern Company, high end technological tools are used to create, store, exchange, and present content pieces that hold information. For instance, it was technological tools, content, people, and routines that made it possible for Southern company to effectively manage Hurricane Katrina catastrophe in 2005, by having every affected person. Some of the company’s experts used in post-Katrina recovery included engineers whose expertise in and enterprise content management ensured that design plans for electricity substations were present when needed, resulting in the restoration of service within 12 days unlike the estimated 28 days. Recommendations I would recommend that senior executive commitment to knowledge management emphasizes their functions as role models for developing employees by emphasizing that line managers consider development as a priority (Rodgers, 2013, p. 89). In addition, the senior management should also seek to reinforce organizational development based on organizational strategy, such that managers are held more accountable for development in performance reviews. In addition, managers’ promotions must be tied to employee’s development such that each potential manager demonstrates the capacity to manage huge groups of people, launch novel initiatives, businesses, or programs, and demonstrate strong decision making (Rodgers, 2013, p. 90). References Blalock, B. (2008). On Life in Information. United States: EMC2. Chilton, M., & Bloodgroup, J. (2014). Knowledge management and competitive advantage : issues and potential solutions. Hershey: Information Science Reference. Goldsmith, M., Carter, L., & Institute, T. B. (2009). Best Practices in Talent Management: How the Worlds Leading Corporations. United States: John Willey & Sons. Phillips, M. (2014, December 5). Introducing Southern Company, An American Energy titan. Retrieved March 30, 2015 Rodgers, M. (2013). Nuclear energy leadership : lessons learned from U.S. operators. Oklahoma: Pennwell Corporation. The New York Times. (2008, May). Southern Company. Retrieved from http://topics.nytimes.com/top/news/business/companies/southern_company/index.html Read More