Cross Site Knowledge Management in Multi National Organizations - Research Paper Example

Cross Site Knowledge Management in Multinational Organizations 1.0 Cross Site Knowledge Management in Multinational Organizations 2 1.1 Description of Concept 2 1.2 History 3 1.3 Relevance to Managers 3 1.4 Cross Site Knowledge Management in Multinational Organizations 5 1.5 Benefits and shortfalls 6 1.6. Conclusion 8 1.7. References 9 1.0 Cross Site Knowledge Management in Multinational Organizations 1.1 Description of Concept According to O’Sullivan (2007) cross site knowledge management in multinational corporations is considered to be the cornerstone of most multinational organizations’ competitive advantage. Knowledge management can be explained as being the problem faced by an organization in developing an effective knowledge marketplace for the members. Mechanisms that enhance the optimum exploitation of the available knowledge as well as support the formation of newer knowledge within the organization should be in place (Al-Hawamdeh, 2002). So as to have knowledge management take effect in an organization, systems that ensure knowledge is integrated into such business processes as interpersonal connections, information technology, document repositories and other organizational norms should also be in place. One other very essential necessity is practitioners skilled in knowledge management. It is proper that a firm’s stock of knowledge is well used, taken good care of and should also be replenished constantly so as to ensure the resources are not wasted away or become obsolete. Innovation within organizations comes depending on the knowledge resources available. Fahey and Prusak (1998) reveal that the management of knowledge within any firm should be considered a strategic activity. The flow of knowledge within an organization is a very important thing. It is knowledge sharing that determines how knowledge is created, acquired, learnt, synthesized and used for the achievement of organizational objectives. There should be platform upon which the interaction of tacit and explicit types of knowledge can take place. Because of their nature, multinationals are in a position to make this work (Leibold, Gibbert and Probst, 2002). 1.2 History According to Fahey and Prusak (1998) multinational Corporations in recent times have become much more conscious about how valuable the coordination of information between their various subsidiaries is. How cross site management of knowledge between the various networks of an organization’s overseas operations is carried out has been discovered to be the source of organizational competitive advantage as far as multinationals are concerned. As daunting as the task of coordinating the subsidiaries in totally diverse geographical, cultural and linguistic regions may be, it is important that knowledge management is coordinated to ensure an organization achieves its full potential and thus success (Kasper et al, 2009). A multinational Corporation’s ability to manage the knowledge scattered all over its country markets as well as capitalizing on the knowledge gathered from the local markets is very strategic in its operations (McDermott, 1999). The efficient and effective transference of knowledge within a multinational organization’s intracorporate network rather than through the use of external market systems and the exploitation of this knowledge is an acknowledged advantage of multinationals (Malhotra, 2003). The basic means upon which innovations are generated and disseminated within multinational organizations depends on how the knowledge resource between the networks of subsidiaries is managed. 1.3 Relevance to Managers In knowledge management, information technology is a very essential component. It is technological advancement that facilitates the process of creating and managing knowledge (McDermott, 1999). Despite its undisputable importance in ensuring a firm establishes a stable market position, information technology is cannot be relied on a hundred percent (Kasper et al, 2009). There has to be human intervention to take into account the knowledge context and how it is embedded within social relationships (Malhotra, 2003). A number of human interventions such as supervisory encouragement, internal mechanisms deployment, corporate training, expatriation and critical thinking that are management practices under the human resource docket are necessary so as to complement information technology. Özsomer and Simonin (2009) assert that a competent human resource management that focuses on the subsidiaries is guaranteed to provide competitive advantage to a multinational organization. The cultivation of knowledge workers’ commitment to organizational objectives and vision by management will go a long way in ensuring an organization’s success (Johnston and Paladino, 2007). It is important that managers embrace knowledge as a component that is a part and parcel of the organization. Managers have a responsibility of ensuring there’s a shared understanding between the people in a particular subsidiary, to provide their workers opportunities to understand more about knowledge. Leibold et al (2002) managers should provide clarifications and make corrections where there are faults in the knowledge held by the workers. In trying to accomplish the organization’s mission and vision, realize changes, solve problems and survive turbulent times, the management is supposed to redefine itself as composed of knowledge leaders who are ready to create a participative system of knowledge sharing (Fahey and Prusak, 1998). Getting the knowledge workers motivated and to cooperate in the realization of organizational goals is vital in ensuring knowledge sharing is core in the effective management of knowledge. Managers should thus use such means as offering rewards and other means of motivating workers. Kasper et al (2009) believe that knowledge workers are so called because of the knowledge they possess. This knowledge is essential in realizing organizational success. If they refuse to share this with others because of demotivation then the organization stands to lose. The managers, who are knowledge leaders, should thus ensure that rewards and compensations meant to motivate the knowledge workers are aligned in line with their needs (McFarlane, 2008). For organizational survival and performance, the knowledge worker should be held in high regard as they are the core determinants of knowledge flow within the whole organization. How this knowledge flow is carried out will as well decide the extent to which managers will effectively manage the knowledge to achieve competitive advantage. The development of effective and integrative knowledge management system within an organization is thus the duty of the knowledge leaders who need to ensure the knowledge workers are effectively coordinated and managed to use their creative and innovative knowledge to become value-adders and providers in the competitive global environment (McDermott, 1999). 1.4 Cross Site Knowledge Management in Multinational Organizations According to Leibold et al (2002) the concept of knowledge management in multinational corporations takes the form of the contributions by the several subsidiaries to the main multinational corporation as regards the generation of knowledge, the use of knowledge and the sharing of this knowledge with the other subsidiaries within the organization. Linking such an organization’s various parts, each of which either has complementary or specialized knowledge together so that they can share knowledge and learn from each other is thus the challenge facing multinationals (Johnston and Paladino, 2007). There should be mechanisms to enable effective open learning between such an organization’s various subsidiaries and thus enable innovations and knowledge management take place. There should be clear and frequent communication channels across the network to ensure learning and information exchange takes place. According to Wenger (2004) there are a number of multinational organizations in the world today. There are those pursuing multi-domestic strategies, those with transnational strategies and those with global strategies. Of these, the multinational organizations pursuing transnational strategies are known to engage so much in cross-site knowledge exchange (Malhotra, 2003). What thus determine the level of knowledge sharing between the various subsidiaries within a single multinational organization are the firm’s knowledge management system and the integrative construct that exists between the various organizational units. So that both the headquarter of a transnational multinational organization and the different parts making up the organization participate in the crisscross coordination and communication, all these units ought to interact as integrated units (Özsomer and Simonin , 2009). Within global multinationals, the organization’s headquarters is viewed as the global innovator whereas the subsidiary units are seen as the global implementors. As for the multi-domestic multinationals both the subsidiary units and the organization’s headquarters are seen to be local innovators. This is simply because of the greater autonomy enjoyed by the subsidiaries. It is therefore possible for the orchestration of knowledge sharing between the various units by the headquarters (McFarlane, 2008). 1.5 Benefits and shortfalls The ability of multinationals to be in various parts of the world in itself gives them a chance to exploit global opportunities, gain knowledge from domestic markets and also induces creativity and thus innovations (Malhotra, 2003). If not for effective knowledge management in the coordination of the various units of such an organization such opportunities would not have been tapped. A firm’s sustained competitive advantage is as a result of the existence of an intricate web linking knowledge, innovation and learning together. This in short points at how multinational organizations manage cross-site knowledge among their many subsidiary units. When errors in the knowledge management system of a given organization, leave alone multinationals are not detected early enough the strategy of having a knowledge management system is doomed to fail and this will result in massive losses to the organization. The presence of errors inhibits the leveraging and development of genuine knowledge and this impedes knowledge management thus a management fad (Kasper et al, 2009). In case the knowledge management system in place is not aligned while considering the business environment’s changing dynamics what would result is the failure of the system due to gaps in the value created by the firm and the value being demanded by the dynamic conditions in the market, competition, change in the industry’s structure, change in consumer preferences and business models (Hitt, Ireland, and Hoskisson, 2010). 1.6. Conclusion It is evident how the success of a multinational corporation heavily depends on cross site knowledge management. This concept assists a company to have a competitive edge over the others. It is therefore wise and advisable for upcoming multinationals to take up the challenge and incorporate this concept into their various organizations. However, more research should be done in order to enhance maximum utilization of the concept’s benefits as opposed to its weaknesses. 1.7. References Al-Hawamdeh, S. (2002). Knowledge management: re-thinking information management and facing the challenge of managing tacit knowledge. Information Research, Vol. 8 (1), paper no. 143. Retrieved on November 10, 2011 from http://informationr.net/ir/8-1/paper143. Fahey, L. and Prusak, L. (1998). The Eleven Deadliest Sins of Knowledge Management. California Management Review, Vol. 40, No. 3. Johnston, S. and Paladino, A. (2007). Knowledge Management and Involvement in Innovations in MNC Subsidiaries. Management International Review, Vol. 47, No. 2. Gabler Verlag. Kasper, H. et al (2009). Integration-responsiveness and knowledge-management perspectives on the MNC: a typology and field study of cross site knowledge-sharing practices. Journal of Leadership and Organizational Studies, Vol. 15, No. 3. Baker College System. Leibold, M, Gibbert, M. and Probst, G. (2002). Five Styles of Customer Knowledge Management, and How Smart Companies Use Them to Create Value. European Management Journal, Vol. 20, No. 5. Malhotra, Y. (2003). Why Knowledge Management Systems Fail? Enablers and Constraints of Knowledge Management in Human Enterprises. New York: School of Management, Syracuse University McDermott, R. (1999). Why Information Technology Inspired but Cannot Deliver Knowledge Management. California Management Review, Vol. 41, No. 4. McFarlane, D. (2008). Effectively Managing the 21st Century Knowledge Worker. Journal of Knowledge Management Practice, Vol. 9, No. 1. Retrieved on November 10, 2011 from http://www.tlainc.com/articl150.htm. Özsomer, A. and Simonin, B. (2009). Knowledge Processes and Learning Outcomes in MNCs: An Empirical Investigation of the Role of HRM Practices in Foreign Subsidiaries. Human Resource Management, Vol. 48, No. 4. Wiley Periodicals. Wenger, E. (2004). Knowledge management as a doughnut: Shaping your knowledge strategy through communities of practice. Ivey Business Journal. Retrieved on November 10, 2011 from www.iveybusinessjournal.com. O’Sullivan, K. (2007). Strategic Knowledge Management in Multinational Organizations. New York: Idea Group Reference. Hitt, M., Ireland, D., and Hoskisson, W. (2010). 9th Ed. Strategic Management: Competitiveness & Globalization, Concepts. Boston: South-Western College Pub. Read More