Knowledge Management and Information Systems - Case Study Example

Knowledge Management Name Course Lecture Date Contents Contents 2 1.0 Introduction 4 2.0 Toyota’s KM Approach 5 2.1 Reverse Knowledge Transfer 5 2.2 Knowledge Co-creation 6 2.3 Emphasis on People 7 3.0 Knowledge Management at BP 8 4.0 Challenges and Solutions to BP Knowledge Management strategy 9 4.1 Employee Resistance 9 4.2 Strategies to overcome employee resistance 10 4.3 Language Barriers 10 4.4 Strategies to overcome Language Barriers 11 4.5 Organizational Culture Barriers 11 4.6 Strategies to overcome Organizational Culture Barriers 12 5.0 Social Media in Knowledge Management 12 6.0 References 14 1.0 Introduction The changing nature of business has changed the value of information and knowledge to the firm and information systems continually open new opportunities for businesses. Information system especially knowledge management systems provide the analytical powers firms need to excel in the global economy. The tacit knowledge that a firm creates in it operations can be an important source of competitive advantage. However, it has to be tapped and applied in relevant areas of an organization’s business. Toyota has excelled at tapping local tacit knowledge and dispersing it for application by other geographical units. This paper analyzes the unique characteristics of Toyota’s approach to knowledge management that underlines the firm’s success in it knowledge management initiative. These unique characteristics include reverse knowledge transfer, knowledge co-creation and emphasis on workers as the core of the knowledge management initiative. The second section of this paper compares and contrasts the Knowledge Management (KM) approaches of BP and Toyota. Both use Knowledge Management Systems (KMS) to tap local knowledge and disperse it across their global operations. However, BP process of transferring knowledge is characterized by lesser control by the organization than that of Toyota. This section also deals with challenges that may lead to the failure of BP knowledge management initiative and the measures taken by both BP and Toyota to diminish the possibility of failure in their respective knowledge management systems. Finally, the paper analyzes how the influence of social media will shape the KM strategies of modern organizations. 2.0 Toyota’s KM Approach The Knowledge management approach of Toyota can be said to be include three unique characteristics. These characteristics are (Ichijo and Kohlbacher 2008): 1. Reverse Knowledge Transfer: knowledge flows from local units to international MNC operations. 2. Knowledge Co-creation: Toyota creates and shares knowledge with external partners and potential competitors 3. Emphasis on people: The inclusion of employee as the main sources of knowledge. 2.1 Reverse Knowledge Transfer Reverse Knowledge transfer (RKT) is a process by which an overseas subsidiary collects local knowledge then utilises it at the parent firm (Yang, Mudambi and Meyer 2008). Conventionally, the parent firm is the source of knowledge for local subsidiaries. This was the original approach used by Japan as it used to employ only Japanese Engineers and designers in foreign units. However, Toyota realized that local knowledge can be sources of competitive advantage as it enables the company react appropriately to the tastes and preferences of local customers (Ichijo and Kohlbacher 2008). In other cases, the knowledge collected in local contexts assist the parent firm in developing competitive advantage in other markets. Toyota collects valuable tacit knowledge from its staff. The tacit knowledge collected is sometimes too context oriented and thus hard to collect (Yang, Mudambi and Meyer 2008). However, the discovered tacit knowledge is very important in securing competitive advantage. Ichijo and Kohlbacher (2008) notes the context-specific knowledge collected from local operation is or little significance to Toyota’s operations if it is not used by the company in other parts of the world. Only through use by people who were not involved creating the knowledge is the captured knowledge useful to Toyota. To reach this end, Toyota disperses knowledge collected from local contexts to its headquarters and other subunits. 2.2 Knowledge Co-creation While most organization avoids sharing knowledge with their competitors, sometimes competitors hold crucial knowledge that can be used for the realization of competitive advantage (Abdul Wahab 2011). Toyota is involved in the co-creation of knowledge in the International Joint Venture (IJV) with Peugeot Citroen named Toyota Peugeot Citroën Automobile Czech (TPCA). Local knowledge is created at the TPCA and later transferred to the parent. Wilhelm and Kohlbacher (2011) stress that knowledge co-creation by Toyota can only occur if both Toyota and the IJV partners are sharing crucial knowledge. According to Kohlbacher (2007), a firm has much to learn from its customers, suppliers, business partners and as in this case its competitors. Ichijo and Kohlbacher (2008) cite the New United Motor Manufacturing, Inc and TPCA IJVs as good examples of successful knowledge sharing and co-creation with competitors. Toyota’s ability to learn from competitors and its suppliers is a crucial aspect of the organizations KM strategy. Ichijo (2007) notes that knowledge co-creation gives rise to knowledge that is difficult for competitors to imitate and is therefore a source of competitive advantage for both Toyota and its partners. Toyota is able to obtain crucial market knowledge by working in the IJV with Peugeot-Citroen (Ichijo and Kohlbacher 2008). With little prior knowledge of local markets, Toyota’s understanding of emerging markets in Europe is dependent on the knowledge that it gets from its IJV partners. Both Toyota and its partners appear to be less protective of their own knowledge and thus they are able to facilitate easier knowledge sharing in the partnership (Abdul Wahab 2011). Toyota has realized that through the IJV it can be able to internalize knowledge from its partner that would be otherwise hard to obtain (Lang 2001). Toyota is able to obtain knowledge which is rooted in product development, design, processes and management practices from its IJV partners (Ichijo and Kohlbacher 2008). 2.3 Emphasis on People Toyota has realized that the success of any knowledge management strategy is dependent on the co-operation of frontline staff (Ichijo and Kohlbacher 2008). The tacit knowledge that motivates companies to undertake knowledge management initiatives is obtained from people. The success of Toyota’s KM strategy can be put down to the realization that knowledge creation is a human process involving conversation, judgment, teaching, and learning has contributed to the success of it knowledge management strategy (Ichijo, 2007). Nonaka (2007) argues that the most critical knowledge in an organization resides in the heads of workers. This knowledge is on the workplace floor, in department that interact directly with customers, with Research and Development staff (Ichijo and Kohlbacher 2008). All these groups of people are frontline employees in any organization. Toyota high regard for local knowledge captured from front-line employees underlines it success in new markets. Toyota realized that local employees were the only ones who could provide knowledge that could assist Toyota satisfy the tastes and preferences of local customers. However, it not always easy to get these groups to share the tacit knowledge they have acquired in their experiences (Schlegelmilch &Penz 2002). By building an enabling environment Toyota has been able to encourage its employee to share important tacit knowledge. Toyota also establishes a knowledge vision for each of its local units which is also enhances the organization local knowledge creation. 3.0 Knowledge Management at BP The BP organization has four main areas: upstream, chemicals, gas and power, and downstream (Echikson 2001). The BP organization in the 1990s was characterised by decentralization and it now comprises of more than 150 independent business units (Echikson 2001). In the late 1990s BP successfully acquired or merged with Amoco, Burma, ACO and Castrol (KM Best Practices n.d). Recently BP has been engaged in an initiative to develop renewable and alternative sources of energy. The main business objectives of BP knowledge management strategy are identified in the next section. The transfer of tacit knowledge that is acquired in local contexts to other units is one of business objectives that led BP to develop a knowledge management system (Echikson 2001). BP felt the need to take advantage of the scope and scale of its operations through the rapid integration of commercial, scientific and technical knowledge (Al-Ali 2003). Similarly, one of Toyota’s knowledge management goals was to acquire and share tacit local knowledge with the parent firm and use it in other local contexts. However, BP knowledge acquired in one context was more easily applicable in other geographical location as BP operations are almost similar in all location (Al-Ali 2003). For example, drilling in the offshore US has no significant difference to drilling elsewhere in the world. BP second objective of its knowledge management systems was the pursuit of operational excellence (KM Best Practices n.d). According to BP CEO, BP is engaged in much the same thing in its operations, every time it does something again it should do it better (Al-Ali 2003). Bp means to store all the knowledge it gains in repetitive tasks like well drilling, refuelling, transportation among others for future use. BP can later use this knowledge in the absence of the people who created it one of the core goals of Knowledge Management Systems. It regards the knowledge gained by its employee as important for achieving operational excellence (Echikson 2001). On the other hand, Toyota uses knowledge that it has gained from local engineers and designers to improve its operations elsewhere. However, BP approach to knowledge management appears to be more market focused than that of Toyota. BP also wanted to promote a culture of knowledge sharing within the organization (KM Best Practices n.d). BP knowledge sharing initiative is highly focused on knowledge sharing among its employees. To this end BP developed an Intranet system known as the Common Operating Environment (COE) which enables its employees to share knowledge regardless of their geographical location (KM Best Practices n.d). BP employees also use the organizations other Information Systems tool like web conferencing and video conferencing to share knowledge through high technological. BP discussion forums also answer about 98 per cent question that are asked by fellow employees (KM Best Practices n.d). In contrast, Toyota’s approach to knowledge seems to neglect independent knowledge sharing through its internal Information System. On the contrary, Toyota seems to prefer a closer control on the knowledge that is shared between its various units. The knowledge that is acquired in local contexts has to be processed at Toyota headquarters before it is dispersed to other location across the globe (Hemsley and Mason 2013). BP employee on the other hand can get immediate assistance from employees working in other units through the technological platforms provided by BP. 4.0 Challenges and Solutions to BP Knowledge Management strategy 4.1 Employee Resistance BP knowledge management initiative could face the challenge of employee’s resistance towards sharing knowledge. Some employees believe that the knowledge they have acquired in the work is their own personal asset (Syed-Ikhsan and Rowland 2004). According to Nonaka (2007) some employee believe their knowledge us a source of personal pride and strength and thus are reluctant to share this knowledge. Some organizations report that it took them years to convince their employee to contribute their knowledge to their KM initiatives. Lack of trust, poor understanding of the objectives of KM systems, low tolerance of mistakes by management and disregard of employees ideas are some of the common reasons employee contribute poorly to Knowledge management systems (Nonaka 2007). 4.2 Strategies to overcome employee resistance BP has the hard task of convincing its employee’s to share knowledge. However, BP already has many strategies in place to collect knowledge gathered in various activities. Retrospect is one of those initiatives that encourage people to outline how they completed a particular activity (KM Best Practices n.d). After Action Review is another tool used by BP to assess performance and to collect operational knowledge used in completing a particular task. Furthermore, most of BP employees would have already used the knowledge management system by the time a request for their assistance comes through. Therefore, assisting other employees would be regarded as an act of giving back to the BP community. In comparison, Toyota has approached this problem by making frontline staff the core of their knowledge management strategy (Ichijo and Kohlbacher 2011). By empowering these workers they are able to share their knowledge much more easily. 4.3 Language Barriers BP knowledge sharing initiative may also face the challenge of language barriers. BP operates across nations that speak different languages. Therefore, unmediated sharing of knowledge among people who speak different languages may be difficult (Buckley et al 2005). Toyota seems to have dealt with this communication problem by first transferring the knowledge that is retrieved from its international operation to its headquarters. From the headquarters this knowledge is transferred to other geographical units in a language that locals in these locations are able to understand. 4.4 Strategies to overcome Language Barriers On the other hand, BP offers English language training in countries like Mexico where English is not used as the official language (KM Best Practices n.d). However, Buckley et al (2005) argue that language alone cannot ensure effective knowledge transfer between employees from various nations. Stahl, Björkman and Vaara (2007) suggests international staff rotation, international work teams and use of expatriates as strategies that can assist organizations like BP overcome the problem of knowledge sharing betwee employees who speak different languages. Codification of knowledge that is to be shared is also one of the strategies that can be used to overcome the language barrier problem to knowledge transfer (Javidan et al 2005). 4.5 Organizational Culture Barriers Organizational culture is a potential challenge to knowledge creation and knowledge sharing. According to Minbaeva (2007) organizational culture is a major enabler of knowledge transfer in the organizations. According Goh (2002) organizations that have a culture of collaboration and co-operation are better at sharing knowledge externally and internally. BP needs to build a culture of co-operation between its globally distributed units to enable effective knowledge sharing among these units. According to Al-Ali (2003), positive corporate socialization among Multinational Corporation units is one of the enabler of knowledge transfer among the units. However, if BP fails to ensure that it various units and employees are socializing positively its KM initiative could fail due to poor levels of knowledge sharing. Organizational culture plays an even more critical role in the knowledge creation process. Organizational factors are a contributor to employee attitudes that may impede or aid the creation of knowledge (Goh 2002). Organizational culture results in an environment where creativity and innovation thrives. Through organizational culture good attitudes towards knowledge sharing develop which assist greatly in the success of KM initiatives 4.6 Strategies to overcome Organizational Culture Barriers Organizational leadership is crucial in the developing a knowledge sharing culture in MNCs (Goh 2002). In BP, the top management encourages employees to ask questions, seek assistance and contribute ideas that could ease their work and that of others (KM BestPractice n.d). BP management has strived to create a culture of co-operative problem sharing, knowledge exchange and collaboration. According to Goh (2002) leaders who treat employee fairly and avoid assigning blame for failed projects are at the forefront of developing an organizational culture that enables knowledge sharing. 5.0 Social Media in Knowledge Management The use of social media is changing the way organization approach knowledge sharing. Social media is changing knowledge management from a centralized process to a dynamic continuous online conversation (Hemsley and Mason 2013). The use of social media in knowledge management can thus be characterized as an increase in knowledge sharing interactions, loss of organizational control over knowledge sharing, availability of updated knowledge and availability of knowledge in a highly uncondensed form. While centralized organizational knowledge management system provide information in a highly condensed and well organized format this is not the case with social media (Reichental 2011). Social media is likely to offer highly unstructured information that will frustrate users. KMS that are reliant on social media may see employee result to old habits of obtaining knowledge which may see old mistakes repeated. Some employee will obviously result to improvisation if they fail to find immediate help from KMS (Reichental 2011). Social media will also see organizations increasingly lose control over organizational knowledge (Hemsley and Mason 2013). While in centralized KMS organizational policies decide who can access knowledge the situation is different in social media driven knowledge management systems. In these systems any employee can gain knowledge from others even though such knowledge does not pertain to their line of work. The highly interactive nature of social media could also sees information that is provided change meaning as the number of contributors is not limited (Reichental 2011). Asking employees to contribute ideas on social media is not a guarantee that they will do so. As seen earlier some employees feel that the knowledge contributed to the organizational KMS reduces their value to the organization. The nature of social media is highly commercialized and organizations might have to offer monetary incentives to motivate employee to contribute to social media based KMS (Reichental 2011). This strategy is already in use by blogging and micro blogging organizations that offer contributors a stipend for contributions. Organization may not have a choice a knowledge management system needs to contain relevant and up to date content on various organizational knowledge areas. 6.0 References Abdul Wahab, S 2011, The Effects of Partner Protectiveness and Transfer Capacity on Degree of Inter-Firm Technology Transfer in International Joint Ventures, Int. Journal of Economics and Management vol. 4(2): 334 – 349 (2010) Al-Ali, N 2003, Comprehensive intellectual capital management: Step-by-step, John Wiley & Sons, New York Björkman, I, Stahl, G, & Vaara, E 2007, Cultural differences and capability transfer in cross-border acquisitions: The mediating roles of capability complementarity, absorptive capacity, and social integration, Journal of International Business Studies, vol 38(4), pp, 658-672. Buckley, PJ, Carter, M. J, Clegg, J, & Tan, H 2005, Language and social knowledge in foreign-knowledge transfer to China, International Studies of Management and Organization, 35 (2), pp, 47-65. Echikson, W 2001, When oil gets connected, BusinessWeek, December, 3. Goh SC 2002, Managing effective knowledge transfer: an integrative framework and some practice implications Journal of Knowledge Management 6(Reichental 2011), 23-30. Hemsley, J & Mason, RM 2013, Knowledge and knowledge management in the social media age. Journal of Organizational Computing and Electronic Commerce, vol. 23(1-2), pp. 138-167. Ichijo K 2007, The strategic management of knowledge. In Knowledge Creation and Management: New Challenges for Managers (Ichijo K and Nonaka I, Eds), pp 121-145, Oxford University Press, New York. Ichijo, K, & Kohlbacher, F2008, Tapping tacit local knowledge in emerging markets–the Toyota way. Knowledge Management Research & Practice, vol 6(3), pp. 173-186. Javidan, M, Stahl, GK, Brodbeck, F, & Wilderom, CP 2005, Cross-border transfer of knowledge: Cultural lessons from Project GLOBE, The Academy of Management Executive, vol. 19(2), pp. 59-76. 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