Knowledge Management, Social Networks and Innovation - Coca-Cola Company - Case Study Example

KNOWLEDGE MANAGEMENT, SOCIAL NETWORKS AND INNOVATION By Location Knowledge Management, Social Networks and Innovation Introduction Online social networks since they are made of experts that have varying innovativeness degrees may result in knowledge management collecting new ideas. Companies from almost all sectors are mainly focusing on innovation due to the current global increase of competition. The entire innovation process involves successful gathering and use of new ideas that are from different sources. Many companies have abandoned using the traditional innovation process due to its decreased rates of success and increased cost. With respect to this argument, many companies are currently making use of cyberspace as it has proved to be an environment that is rich in essential information (Darroch 2005, p. 103). The information gathered from cyberspace is interested in the development process of both new services and products. The present paper is a report that analyzes knowledge management in Coca-Cola Company to determine how KM (embedded in social networks) can result in successful innovation. Knowledge management in Coca-Cola Company The advent of the use of the network has promoted a new form of social configuration, which many people refer to as network society. Many companies such as Coca-Cola Company have been influenced by communication and information technologies. Shorter life cycle of products have been imposing complex challenges for many companies. Knowledge management that is embedded in social networking is among the main strategies that have improved the life cycle of the company’s products, thus, allowing it to stay ahead of its competitors (Hedlund2004, p. 89). The company has been using World Wide Web and Internet as a collaboration tool especially social networks. Coca-Cola Company is among the leading companies that have shed light on the essentials of using social networks and influence on successful innovation. The online environment that led to invention of social networks has turned out to be a privileged space that many companies use as a tool for exchanging information and knowledge. This means maintaining and attracting different social actors online. Both marketing and innovation management researches are currently interested in social networks since they are favorable to spreading information from a variety of sources. Social networks enable consumers to make an assumption of various functions, from disclosure or announcer to a company’s criticizer (Montanari&Saberi 2010, p. 54). Participation in social networks enables Coca-Cola to exchange its perceptions and ideas regarding the company’s products and services. This is normally done by positing opinions and comments on the social networks. It is this gathered information, together with the characteristics of personal and network users, which Coca-Cola Company uses to establish sound strategies during launching of new products and services. For this to occur, the innovation and knowledge sectors of Coca-Cola Company ensure that they are able to incorporate the gathered information from social networks. Since the volume of opinions and comments posted daily on the company’s social sites is high, the marketing management prioritizes the acquisition of the gathered information and focus it towards innovation. Innovation and knowledge management Companies that are wishing to increase their sales through increasing market share are enmeshing in several changes. Most of these changes are based on whether a company is able to use information efficiently and effectively. In fact, in order for companies to improve their performances, they should do more than just managing information. In accord to all aspects that are related to knowledge, companies should importantly, develop abilities of managing data, knowledge, and information. Knowledge Management (KM) comprises of activities that are related to acquisition, usage, and sharing of knowledge, both externally and internally. It also involves procedures and methods for establishing connections with other successful companies, whether riots or partners, institutions or customers. Finally, knowledge management involves aspects that are related to recognition of knowledge value (Gray 2006, p. 345). Knowledge management involves various activities within an organization. In addition, it involves external connections and flows that are not within an organization (Vasenska 2013, p. 615). Knowledge management also contemplates attainment of knowledge that is related to competitors, suppliers, and customers. For instance, Coca-Cola’s management is able to establish policies for codification, usage, and sharing of the company’s knowledge. Knowledge allows Coca-Cola Company to stay ahead of its competitors in the market as well as renewing itself. However, knowledge can make a company restrict itself to activities that it thinks it can do well. While the later of knowledge make companies simply improve their products and services, it also opens doors towards successful innovation. Innovation in Coca-Cola Company is always successful as a result of exploring and searching for new know-how and new things from social network sites. The management of this company ensures that there is always a balance between existing knowledge preservation and consideration of the new knowledge. Knowledge management is broadly used in companies that intensively use information and plan to improve their qualifications and abilities. The usage, sharing, and attainment of knowledge is very important for operations of a company (Deng, Su & Wang 2010, p. 56). For instance, Coca-Cola Company ensures that it has suitable system that the management uses to manage knowledge. This enables the company’s management to increase both ability and competitiveness to innovate successfully (Carneiro 2010, p. 87). Web-based tools such as web mining enables the company to facilitate its interaction and relationship with customers. It also enables the company to absorb the new knowledge at low costs comparing with the traditional techniques (Hackney 2005, p. 45). It is known that all frameworks within Coca-Cola Company started as an idea in the employees’ mind. This then followed analysis of data that resulted in the ideas of production(Valente 2006, p. 76). Therefore, Coca Cola Company has grown into a global corporation due to its employees’ tacit knowledge. Knowledge management in the Coca Cola Company has a very wide relationship with its collaborators. Knowledge management within the company not only partakes a system, but also a broad network where everyone within the company communicates with the company’s network, which is based in many countries. This nature helps the company’s managers assess the amount of information that the company requires to improve its endeavors in customer satisfaction and perfection (Mihăescu&Stăniţ2014, p. 78). During execution of the company’s strategies, knowledge management and especially social networks serves as a guide to deem certain areas as fit and in marking areas that need further improvements (Yousif Al-Hakim & Hassan 2013, p. 58). Knowledge management also acts as a center where the company gathers information for expansion of its system. This is the reason why knowledge management in Coca-Cola Company is dependent on how to advance the company’s information technologies such as video conferencing, intranets, and web casting among many others (Obstfeld 2005, p. 100). Knowledge management among the company’s employees has enabled the company to create new and successful products’ innovations. The company not only uses employees’ tacit knowledge but also the information it gathers from social networks to come up with new and successful innovations (Hackney 2005, p. 67). All it does is exhausting the information and ideas gathered from social networks to come with new innovations. However, in order for this information and ideas to be properly organized into new concepts, the company ensures that it has quality inter-personal relationship in order to put the knowledge into conception in an appropriate manner (Chung 2013, p. 78). The output depends on the requirements of customers and employees and therefore, it is the role of employees to decide on the type of technology to use. For the Coca-Cola Company to prosper to where it is today, it took a very aggressive method. Therefore, it is very vital for a company to study things in a detailed manner before making innovation decisions. For example, before the Coca-Cola Company puts up any commissary in a new location, it ensures that extra research is done. This is because the things that the company needs to understand about this new place are very important when it comes to introducing new innovations (Coombs, Hull &Peltu 2008, p. 45). The system of the Coca-Cola Company has for many centuries been improved and founded on a community level. This strategy makes the company’s system a very successful social issue. The company’s system has efficiently and successfully served the company for many years catering not only the local businesses. The strategy that the company uses is based on force and value chain models (Cardinal, Alessandri& Turner 2001, p. 195). These are among the tools that has helped Coca-Cola Company to grow through successful innovations. They also give the company guidance on how to resolve future reverses. Despite the current global competitive world, Coca-Cola Company has still been the leading beverage company due to the use of knowledge management that is embedded in social media that has enabled it to implement a successful innovation (Valente 2005, p. 76). In addition, social media has been a very valuable resource for the Coca-Cola Company. The company uses social media to test its products to identify if they have any weakness. It also uses social media to find solutions to the identified weaknesses (Young 2011, p. 70). Social media is also used by the company to gather new products’ ideas and mainly foster innovations. The strength of social media lies in its ability to enable companies to connect with a diverse population of customers and enable them to gather successful innovative ideas. Social media benefits organizations because it enables them access reliable market research that is used for successful innovation (Collinson 2007, p. 67). Organizations use social networks to engage with diverse audiences; people who have great knowledge and experience about products. Social networks and open innovation Although social networks are primarily used as an entertainment medium, organizations such as Coca-Cola uses it as a powerful tool that helps them innovate successfully and compete in the international marketplace more effectively (Swan, Newell, Scarbrough&Hislop 2009, p. 262). There are two guiding percepts of open innovation, which include; good people are not working in your organization and that your problem can be best solved by another person. Social networks provide organizations with a cost-effective and quick way to access these individuals and ideas (Sivarajah2006, p. 56). The intersection of open innovation and social networks is a very successful step in the process of innovation. However, the alignment of social networks and physical network communities in the current digital world ultimately leads to diverse and faster innovations. Social networks have the power of making a huge difference in any organization if used appropriately. An appropriate social network program significantly increases the population of customers who support your company (Lundvall& Nielsen 2007, p. 207). However, social networking can be both overwhelming and time consuming. For Coca-Cola Company to be more successful, there is need of creating social network strategies and specific goals and objectives that are realistic, measurable, and actionable (Burt 2009, p. 52). The company also needs to stay connected and updated about the ever-changing social network platforms and tools as well as choosing the appropriate ones for the company’s strategies. With the venture of new technologies storming almost all businesses, the most aggressive type of technology is social media. Traditionally, customers were not given platforms to express their voices over products and services (Majchrzak & Cooper 2004, p. 174). Fortunately, social media networks have organized sentiments of customers, creating an active community around experience and interest (Cantner, Joel & Schmidt 2009, p. 187). Companies are widely optimizing the web in this new digital era. Indeed, this new strategy of connected consumerism has enabled many companies to implement successful innovations. Perhaps, and more importantly, organizations are able to acquire the gift of feedback from different social networks such as Facebook and Twitter (Breschi&Malerba 2005, p. 41). Social networks represent a bridging between business assumptions and customer expectations. The analysis of Coca-Cola usage of social media network shows that organizational crowdsourcing events support innovation, change, creating different and new awareness about innovation, allowing internal innovation processes, empowering workers, supporting collaboration and knowledge work across a company and enabling companies overcome the traditional costly innovation processes (Freeman 2009, p. 215). Coca-Cola has greatly benefited from knowledge management that is embedded in social media, but there are some improvements that the company should focus on in order to maintain its competitive power (Gloet&Terziovski 2004, p. 403). Organizational learning Organizational learning is broadly defined as the change in an organization’s knowledge result from function of experience. This knowledge manifests itself in behavior or cognition changes and includes both tacit and explicit knowledge (Brand 2008, p. 18). Organizational knowledge is embedded in various repositories one of them being social networks. One of the aspects of organizational learning is social media. The use of social networks is not simply important, social networks are currently becoming homogeneous (Argote &Miron-Spektor 2011, p. 45). However, what most organizations fail to understand is that social networking is an array of several channels that bring a more individual-to-individual connection form through a two-way engagement. Competence and knowledge are highly termed as the most essential resources of an organization’s innovation. Most recent researches are focusing particularly on the significance of tacit knowledge that sustains an organization’s competitiveness, as well as its role in organizational learning and technological innovation (Boudourides 2001, p. 67). The degree to which tacit knowledge forms an organizational knowledge base, and how organizations use and form it is greatly shaped by a broader institutional and social context. It builds the premise on which the knowledge of an organization is socially embedded. In addition, it is founded on organizational coordination routines and mechanisms, which are highly subjective to societal institutions (Leal-Rodríguez et al 2013, p. 67). Lastly, products and services are becoming more complex and therefore, there is need of organizations to do investments to overcome this complexity (Phromket& Ussahawanitchakit2009, p. 78). For companies to ensure they engage in successful innovations are highly focused on social networks because the information they gather from social media sites come from customers with interesting profiles. Most of this information is based on analyses and review of products or services of a company (Du Plessis 2007, p. 26). It is this information that many organizations rely on for successful innovation. Organizations gather, process, and analyze information about social networks to assist managers in business dealings (Akram et al 2011, p. 576). The quantity of web-based information has significantly grown in the past years and many organizations use this universe to find innovation opportunities. The information collected is useful and significant for innovation-oriented knowledge (Mehta, Mehta&Sharma 2011, p. 16). Innovation that is based on social networking is always successful because the sources are an organization’s customer themselves. An organization benefits from social networks because it learns from the consumers of its goods and services, thus retaining knowledge (Lai & Chu 2002, p. 26). In addition, participation in social networks allows the users to exchange new ideas leading competitiveness and successful innovation. Also the content that consumers generate is essential for knowledge management and organization’s innovation (Hull, Coombs &Peltu 2000, p. 634). Conclusion In conclusion, online social networks since they are made of experts that have varying innovativeness degrees may result in knowledge management collecting new ideas (Nonaka&Yonekura 2005, p. 53).The advent of the use of network has promoted a new form of social configuration, which many people refer to as network society.Despite the current global competitive world, companies like Coca-Cola Company are still being the leading due to use of knowledge management that is embedded in social media that has enabled them to implement a successful innovation.Companies are widely optimizing the web in this new digital era. Indeed, this new strategy of connected consumerism has enabled many companies to implement successful innovations (Newell, Robertson, Scarbrough& Swan 2009, p. 67). 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