Knowledge Management of MacDonald Company - Case Study Example

Knowledge Management Most of the organizations in the current world need to strategize on how to maintain their competitiveness in the business environment. Many companies are running out of business because of the increasing competition in the market. Literature reveals that the only way for a company to survive despite the increasing competition in the market is by convincing customers to believe that the company is providing quality services and products (Camison, 2008. p 178). MacDonald is an example of an organization that has survived despite having a stiff competition in the market. The main factor which has enabled MacDonald Company to survive despite the increasing competition in the marketplace is the application of knowledge management in establishing and maintaining its competitive advantage. The company uses knowledge management to integrate intellectual assets internally, implementing new marketing strategies to maintain the competitive advantage of an organization, enabling the entire department in the company to access the right information in a timely manner and using an advanced technology which enables a groupware intranets. MacDonald Company has implemented business strategies which are closely associated with knowledge management such as change management, risk management, benchmarking and other effective and efficient practices. Turban has identified the importance of knowledge management in his book titled “Position Paper on Knowledge Asset Management", that the key primary business factors comprise of early retirement and the employees quitting the company leading to loss of knowledge, frequent changes in the company that can lead to the loss in the knowledge with and competitive pressure that can interfere with the normal process in the company thus leading to a valuable business knowledge (Jennex, 2009. p 98) Researchers such as Voehl have given a strong argument on how organizations apply knowledge management. He also defines it as a range of exercises used in an organization to recognize, generate, represent, allocate and allow implementation of insight and understanding. These insights and understanding comprise of the knowledge, which in most cases comes about as a result of specialization or development in the organization over time, which can best be termed as experience gained by the organization. Knowledge management has become part of the requirements in MacDonald Company in order to handle the growing numbers of customers in the market segments they focus. Also the company has been able to operate in an e-Business environment due to its good command of knowledge in the market which has facilitated the proper handling of customers, production of high quality services and adoption of strong marketing strategies. The company has also improved knowledge management in the organization through the use of the internet. They obtain the most valuable information in the internet which acts as guidelines for managing the resources in the organization. Besides, the company has improved its competitiveness because they perform its duties electronically, seamlessly across the world through the internet and via intranets which has resulted in the explosion of wealth and the reach of information and knowledge, (Turban, 2009. p 679). MacDonald Company uses knowledge management to ensure that value is extracted from knowledge that is both internal and external to the organization. Thus knowledge management is effective when combined with business strategies since its primary aim is to focus in achieving organizational goals and improving its performances, innovating new strategies, continuous improvement of its competitiveness and sharing of lessons learned. This paper will focus on the methods that MacDonald Company has used knowledge management in dealing with the problem of supporting its strategic business goals with the introduction and ongoing management of its knowledge management. In order to achieve its objectives, it will need to consider the strategies and the vision of the company such as the strategic business goals of MacDonald, obstacles that the company faces and finally the strategies which the company has been using when addressing the problems it faces through the application of knowledge management. Because of an increase in application knowledge management in the workplace, McDonald company has adopted e-Business which has aided in gaining the loyalty of its consumers. It provides online services such as placing orders and making advanced payments online. Furthermore, the company markets and sells its products online i.e. the customers just needs to pick whatever they have purchased in the nearest branch of the MacDonald Company. According to Jutta in the Wall Street journal, the mission of MacDonald Company is to be the world's largest fast food organization. These authors further emphasizes the want of MacDonald Company which is at the top priority is to achieve excellent management in the company which can be achieved by applying knowledge management in leadership and management of the company (Voehl, 2007, p 192). The company has been in a position to increase its production capacity so as to meet the increasing demand in the market. This objective can only be achieved if the company adopts the policy of revolutionary merchandizing and proper distribution channels. Furthermore, the company’s success relies on how the company carries out its marketing strategies in the market. The other goal which MacDonald Company looks forward to to achieve is to develop customers’ loyalty. This will create a profile of customers who are willing to pay premium prices for the products and services offered by the company. It will also offer referrals to other customers which will act as a promotional tool of the company. As a result of this, the company will be able to cross sell its products. Knowledge management is also important since it will enable the company to position itself well in the market; thus making it maintain a positive image in the market since they will be having the relevant information concerning the market. MacDonald’s strategy is associated with the goal of building its brand name in the market making it attractive to corporate customers and the suppliers. As a result the company will be in a position to improve its service production because of serving many customers in its market segments. In most cases, this is achieved by improving the quality of the services so as not to create differences with the competitors in the market (Remenyi, 2009. p 110).This is mainly achieved through offering of quality goods and services. MacDonald utilizes internet to market its products in the market. It has designed a website on which it uses to market its products, indicating that it sells the services and the benefits obtained in purchasing from the company. Human capital theory: the theoretical foundation of knowledge management In MacDonald Company, human capital plays a crucial role. In most cases, it is divided into intellectual capital and intellectual property that helps the management of the company to focus on knowledge management and to make the company to be knowledge-driven so as to satisfy the customers completely. (Gorelick, 2008, p 151)These concepts enable the company to acquire and train the employees so as to be competitive and offer specialized services in the organization. There are various forms of intellectual capital which are commonly used by the MacDonald company and they comprise of customer capital, tacit knowledge, intellectual asset, information technology, innovation, and research and development. All these concepts are very important because they enable the company to improve its competitiveness in the company. Team-work, social and intellectual capital The combination of team-work, social and intellectual capital is very important in every organization and can only be achieved through a network of human relationship. This also encompasses knowledge management since employees in this category recognize the importance of the component sof social capital theory. All these help and boost efficiency and effectiveness in an organization. Furthermore, MacDonald Company has used the theory of social and intellectual capital to improve on the way it deals with its clients, a manner which allows them to feel free to share with them on what other people feel about their products. The key factor in the company is the communication which has enabled the company to create positive relationships between itself and the customers. MacDonald company practices two various forms of knowledge management when handling its customers. These forms comprise of implicit and tacit knowledge management. The human resource ensures that customer care persons are equipped with this knowledge so that they can handle the customers’ complaints promptly without having to refer to the seniors (Jutta, 2009. p 93) The company has also used these forms of knowledge to establish personal relations departments with people aho are equipped with necessary skills to handle every individual who visits the company either through their website or physically visiting the premises. When a client feels like he could give a contribution over the internet, the customer relations department answers these questions promptly. Customer knowledge management This is very important for every organization as it helps the management of the company to make sound decisions. McDonald Company also uses the customer capital that is made up of different forms of knowledge to facilitate positive relationships between the company and the customers. This will help the company to increase the number of customers retained, satisfy the needs of the customers and increase the annual growth of new customers in the company. The company can also use the customer knowledge to produce products which will attract more customers in the market. This is also important because it will help the company to know exactly the buying process of the customers in the market. Knowledge competencies and their principles Human resource managers direct its employees in an appropriate manner so as to ensure that they work as per the required standards and maintain the company’s principles. This human resource manager uses some competencies such as monitoring the employees, making decisions concerning issues affecting employees and developing positive relationship between the employees and the management (Terje, 2009, p 181). These competencies are very important because they will develop a spirit of corporation within the organization. Organizations such as MacDonald Company operate under these principles so as to run their business in the market. Further impact on information technology McDonald Company has embraced the use of technology in its operations in the market. This is the key evidence of the knowledge age in the companies of today. Technology has shaped the life of many people since it makes everything to look simpler. Some of the factors which have been improved by technology in the companies include the ease of paying employees, faster and simpler processes of paying the company’s bills and the means of conducting shopping (Wang, 2010, p 160). Other factors which have improved the knowledge base in MacDonald Company is the ease in billing, increase in sales made per day, improvement in workflow policy, effective customer service because of the use of technological equipments such as receiving emails and giving feedbacks without the need of a customer visiting the company and the advance inventory systems used in the company. These are the factors which have increased the changes and influences that affect nature and improve the functioning of the company in the market place. Knowledge: a bundle resource Knowledge has been a useful resource for MacDonald Company because the bundles of knowledge which it contains comprises of knowledge embedded in products, systems and processes, knowledge of employees of the company, knowledge of customers, and other parties such as suppliers and partners. The company has been able to maintain its leadership position because they are able to contain the above elements. Knowledge: the source of value Knowledge has become the reason for MacDonald’s survival in the highly competitive market. The company uses knowledge as an agent in their creation of value. They use knowledge to coordinate the activities in the company, when planning for future actions and during the management of the duties and when delegating obligations. Conclusion In conclusion, it is evident that for any organization to attain competitive advantage in the market, they have to embrace knowledge management in relation to its strategic business goals. This has been the key strategy for MacDonald Company which applies the use knowledge management strategies to design strategies that lead to attainment of the company’s goals and objectives. They also use knowledge management strategies to familiarize themselves with the market situation and the kind of promotional tools they will be competently and effectivelyused in the market. Bibliography Wang, K. 2010. 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