Strategic Knowledge - Essay Example

Strategic Knowledge Table of Contents Introduction 3 Knowledge Management/Environment 4 Intellectual Capital and Social Capital 8 Intellectual Capital 8 Social Capital 10 Communities of Practice 11 Soft Systems Thinking 14 Conclusion 17 References 19 Introduction In relation to strategic knowledge, the notion of ‘intellectual capital’ is primarily described as the financial value of two segments of intangible assets belonging to a specific organisation that include organisational as well as human capital. In this similar context, organisational capital represents the interrelation with the suppliers as well as the customers and other involved parties in the process of supply chain along with the knowledge that is surrounded within an organisational arrangement. On the other hand, human capital implies the capabilities or competencies, experiences, value features and training of the workforce of the organisations (Petty & et. al., n.d.). With the intention to determine that whether the idea of intellectual capital can be managed at the strategic level or not, it can be affirmed that intellectual capital aids an organisation to generate greater value to the customers and drive success at in the long-run. Contextually, it has been viewed that the success of several foremost organisations including Microsoft, Amazon and Google among others have been typically based upon their respective intellectual capital in terms of managing it in an effective manner (Marr, 2008). Samsung Group, popularly known as Samsung, is one of the biggest Information Technology (IT) based global organisation that deals with various products and services including consumer electronics, medical instruments, mobile phones and telecommunication related equipments (Samsung, 2012). Notably, the vision of the company is to incessantly develop its pioneering technological advancements as well as effectual business procedures with the intention of penetrating into new business markets, enhancing profitability and most significantly accomplishing superior competitive position over its chief business market competitors (Samsung, 2012). Thus, it can be stated that the group can attain its expected business goals within the context of KM by effectively managing its intellectual capital. Based on these considerations, the discussion henceforth will intend to present a comprehensive analysis of the statement concerning the issue that whether the perception of intellectual capital can be managed at the strategic level. Different important aspects that include knowledge management or environment related managerial concerns, intellectual along with social capital, communities of practice and soft systems thinking will also be portrayed in this discussion. Knowledge Management/Environment The conception of Knowledge Management (KM) is fundamentally described as the application of collective knowledge to the complete workforce that supports an organisation to attain its predetermined business targets. It has become one of the key attractions amid every researcher as well as practitioners in the corporate world. The prime objective of KM is to manage the knowledge practiced within an organisation at the time of any discrepancy that arises due to changing business environment as well as introduction of innovative technological advancements (Malhotra, 2000). It has been viewed that most of the business organisations highly prioritises the aspect of KM due to rapid transformation in the business markets and enlarged level of nationalisation along with globalisation. Most significantly, the organisations have been recently been observed to broadly consider the features of KM in order to raise their competitiveness from a long-run perspective in a sustainable way. Moreover, the other crucial reason for considering KM as an important aspect is that it facilitates effectual knowledge flow and sharing which subsequently enhances the effectiveness of the individuals as well as the organisations quite considerably (Singh & Kant, 2008). Thus, it can be stated that the idea of KM is often regarded as a core requisite for the organisations operating throughout the globe, rather than viewing the same as an option. With a critical understanding, the aspect of intellectual capital has been identified as one of the chief strategic assets for determining effective organisational performance where it is believed that better management of intellectual capital can raise organisational competitiveness by a considerable level. In relation to KM, most of the organisations face certain limitations while managing their respective intellectual capital. The limitations may include in the form of ineffective training programs, improper utilisation of valuable resources, unproductive business procedures, adverse interrelation with the customers and most importantly, inefficient distribution channels along with selling. Moreover, shortage of commitment from the top management as well as motivation, deficiency in technology infrastructure along with ownership and staff retirement among others are also certain crucial limitations that are often face by the organisations while managing intellectual capital. These valuable aspects contribute in not managing the intellectual capital at the strategic level as the aforementioned factors are largely recognised as the precious intellectual materials by different business organisations (Eyng & et. al., 2006). It has been noted that there lay certain crucial factors that unfavourably affects the achievement of KM operations within a specific organisation. These factors also contribute in not managing the intellectual capital at the strategic level within the background of KM or environment at large. In this regard, the factors can be identified to comprise the barriers that arise from disorganised organisational cultures as well as arrangements (Singh & Kant, 2008). Contextually, when analysing the implications of KM or environment practiced within the working culture of Samsung, it can viewed that the KM process of the group has been intensely correlated with process innovation. In this similar context, the group emphasises upon the facet of process innovation as an effective KM business procedure with the intention of lessening lead time, improving the effectiveness of the management and diminishing the quality of information search relating to operational functions. Furthermore, it is also apparent that the group strongly believes these vital factors to ultimately support the overall improvement of competitiveness in its long-run. It is worth mentioning in this regard that from the very beginning, the group had introduced and adopted pioneering technological advancements in order to handle and manage overall organisational knowledge. The group, instead of innovating its constructed business procedures and systems, can be observed to concentrate upon following the innovation process in order to accomplish its predetermined business goals (Jang & et. al., 2000). Samsung views the perception of innovation process as one of the intellectual capitals that supports it to enhance as well as to raise competitiveness at large. In this connection, the group manages intellectual capital at the strategic level by analysing effectual strategies concerning enterprise management and knowledge requests of the employees as well as planning different valuable programs relating to KM. Moreover, the group also attempts to prepare as well as operate effectual knowledge contents and perform interconnected improvement activities as another way of managing intellectual capital at the strategic level. In this similar context, the group focuses upon managing knowledge in accordance with knowledge lifecycle that fundamentally includes knowledge registration, knowledge execution, knowledge authentication and knowledge valuation. Besides, Samsung can also be observed to pay due consideration towards the effective management of its one of the valuable intellectual capitals, i.e. process innovation, within the context of KM or environment by efficiently dealing with its knowledge asset performances. The group handles this particular function by forming standards as well as principles relating to onsite KM actions. Additionally, it has been viewed that the group focuses upon conducting collaboration activities with different KM experts with the intention of operating knowledge assets efficiently within the organisation (Samsung SDS, 2012). By considering the aforementioned case, it can be affirmed that intellectual capital can be managed at the strategic level. The management of intellectual capital as a form of process innovation, in relation to the notion of KM or environment of Samsung, has been graphically represented below. Intellectual Capital and Social Capital Intellectual Capital The significant aspect of intellectual capital is typically regarded as praising aptitudes of competence as well as commitment that tends to create superior value to the customers and most importantly generate wealth not only for the company but also for the community (Nerdrum & Erikson, 2001). The various constituents of intellectual capital include relational capital, human capital and structural capital. In this regard, human capital represents the skills as well as the competencies of the employees of a particular organisation. This imperative fetaure, i.e. competence of the employees, possesses the ability to act accordingly for generating both tangible along with intangible assets in an organisation. Moreover, the effectiveness of the employees also contribute in generating effectual ideas as well as knowledge that eventually assists the organisatins to improve and raise their competitiveness over their chief business market contenders by a significant level. On the other hand, structural capital denotes practicing arrangements through the proper utilisation of available resources that further tend to facilitate an organisation to make proper and adequate use of its intellectual capital. Finally, relational capital comprises the external revenue creating factors of different organisations such as branding, business reputations, stategic allinaces and interrelations with the suppliers as well as the ultimate customers (Seetharaman & et. al., 2004). Based on the above explanation. a pictorial representataion of the differnet elements of intellectual capital is provided hereunder. The perception of intellectual capital is recognised to be a chief asset for most of the business organisations in today’s modern day context. This is owing to the reaosn that intellectual capitals has often bee examined to support the organisations in enhnacing along with raising their effectiveness by a considerbale level by generating wealth and greater value to the targeted customers. Thus, it can be stated that the management of intellectual capital is quite important for the organisations. In this similar context, it can be affirmed that intellectual capital can be managed at the strategic level. By recognising major value drivers, visualising as well as measuring value creation, intellectual capitals can be managed. This can better be understood with the help of the following pictorial presentation. Source: (Marr & et. al., 2003) However, intellectual capitals are seldom managed at the strategic level subjected to certain conditions. The conditions include disorganised organisational arrangememts, unstructured organisational culture and inappropriate utilisation of available resources (Petty & et. al., n.d.). In this regard, it has been viewed that Samsung considers its intellectual capital as one of the key business market starategies for aattaining higher profitable growth. Fostering top-quality talents has been recognised to be one of the important intellectual capitals and an effective policy of the group that has significantly led it towards success since its initiation. In order to comply with the recent market challenges due to increased level of nationalisation as well as globalisation, the group has further been focused upon delivering quality products to the customers by employing top talents across the globe. In this connection, the group tends to perform two imperative responsibilities that include generating an organised or structured orgaisational culture and motivating its entire workforce (Samsung, n.d.). Social Capital Social Capital is principally described as a major institutional system that encompasses different aspects of societal arrangements such as norms, information channels and social obligations which further facilitates an organisation to improve its capabilities to utilise vaubale resources efficiently. Besides, the notion of social capital has also been identified to be a precious system by which the organisations can accomplish improved and greater financial growth. The significance of social capital within the periphery of KM or environment lies in the fact that it binds together numerous important sociological concepts like social cohesion, incorporation and support (Ballet & et. al., 2007). In this similar concern, the social capital of Samsung can be identified by emphasising upon its conduct of business. Notably, the group is intending to enhance its overall business procedure by gathering the valuable ideas of the stakeholders and involving the most potential personnel while making any major decision. Moreover, it has been noted that the group regards its every employee as an imperative corporate asset and fosters them to perform efficient operational functions. Apart from creating a sort of social interrelation with the stakeholders as well as the employees, the group has formed a compliance system with the intention of preventing as well as lessening business risks and issues concerning the breach of intellectual property rights and organisational regulations among others. It is worth mentioning in this regard that the compliance system of Samsung, in general, comprised different activities such as prevention, monitoring and follow-up. The prevention activity relating to compliance system of the group generally includes the education of the employees and the allocation of compliance manuals. The monitoring activity of the group further represents the observance of the relevant organisational units or individuals on regular and non-regular basis. Finally, the follow-up activity recognises the reasons concerning a particular issue and analysing the detailed improvement activities as well as outcomes (Samsung, 2013). Communities of Practice The term, ‘Communities of Practice (CoP)’ is usually defined as a cluster of people who are bound mutually with shared knowledge as well as practices in order to create a joint enterprise structure in an efficient manner. It has been apparently observed that CoP adds superior value to an organisation by various means that include commencing new business lines, devising effectual business strategies, raising operational effectiveness and accomplishing superior competitiveness (Cox, 2005). Moreover, CoPs are often observed within an organisation as the significant positions of identity, meaning, negotiation and learning. This particular strategic process is recognised to be unstable in nature and change over time due to recruitment and termination of organisational members (Roberts, 2006). In relation to the process of determining the CoPs, Samsung, as a global IT organisation, remains much committed towards obeying the local regulations as well as laws along with applying stern codes of conduct to its workforce, globally. In this connection, the group strongly realised that the facet of ethical management not only contributes in responding towards rapid transformations in the worldwide business market, but also builds faith with different stakeholders that encompass the investors, shareholders, local communities, customers and employees. It is in this context that the prime objective of the group is to become a global business leader by developing its three major strengths, i.e. products, technology and creative solutions. The code of conduct that has been established by the group comprises the eradication of gender discrimination practices, clear disclosure of valuable business information, partner collaboration and customer information among others. Moreover, it has been identified that the group introduced as well as followed certain important principles with the intention of accomplishing its expected business targets. These include maintenance of neutrality amid the employees, protection of the information relating to business partners along with individuals, disclosure of precise accounting transactions and compliance with the legal guidelines as well as ethical standards enacted by the group (Samsung Electronics, 2009). With regard to determine that intellectual capital cannot be managed at the strategic level, it can be stated that Samsung effectively manages human capital as a form of intellectual capital by planning as well as implementing different effective measures. In this connection, the group endeavours to construct an inventive organisational culture that would certainly impose a considerable impact upon its competitiveness. Within the context of CoP and managing human capital as one of the constituents of intellectual capital, Samsung can be observed to dynamically foster a flexible organisational culture that enables the entire workforce of the organisation to pursue a vigorous work-life balance. It has been viewed that the group has not only contributed towards facilitating a better balancing of work and life of the employees, but has also improved their operational efficiencies by adopting flexible working arrangements along with following effectual time management procedure. Moreover, it has also been observed that the group incessantly intends to train its personnel by establishing efficient training programs and adopting transparent corporate management system with the motive of becoming the foremost ethically sound organisation in the global platform (Samsung Electronics, 2012). In respect to the management of human capital as a form of intellectual capital, Samsung established a dynamic work culture that fosters learning and development of the employees of the group by a considerable level. In this concern, the group had formed a Creative Development Research Institute System in order to deliver its entire workforce with the opportunities to generate new ideas as well as concepts. Additionally, the group has been noted to develop different significant activities in order to generate such an atmosphere wherein the employees of the group can flourish incessantly. It is still continuing towards making deliberate efforts in encouraging the employees to work effectively by investing substantially in infrastructures, increasing awareness in working jointly and embracing diversity. Most significantly, the group focuses upon offering safe working conditions for every personnel by developing new technological infrastructures, materials along with production techniques (Samsung Electronics, 2012). Thus, on the basis of the above discussion, it can be affirmed that Samsung conducts several practices and makes deliberate efforts in order to manage its human capital as a form of intellectual capital by a greater extent. Soft Systems Thinking The perception of soft systems thinking or methodology is fundamentally described as a set of valuable resources that include materials, workforces and information among others that are arranged to carry out designated functions with the motive of attaining desired results in terms of profitability (Reisman & Oral, 2005). It can deliver the business managers with a precious addition to management approaches in complex situations through pioneering organisational change that eventually can lead towards enhanced efficiency in KM within an organisation. It has been apparently observed that the idea of soft systems thinking or methodology plays an imperative role in the process of strategic planning. This is owing to the reason that it identifies the composite business or working environment in which the human systems perform their respective operational functions. Moreover, soft systems thinking can also be observed to execute certain major steps in the procedure of strategic planning. Initially, it attempts to define a structure for efficiently conducting the process of strategic planning. Secondly, it tends to depict the current position relating to the organisational structure. Thirdly, it predicts the future conditions linked with corporate culture and ultimately, focuses on developing effective strategies for smooth performing of the process of strategic planning. All these steps that are followed in accordance with the notion of soft systems thinking or methodology ultimately attempt to support the business managers of diverse organisations to ensure an effectual strategic process, particularly in complex situations. It is worth mentioning in this context that the authentic application of this particular approach, i.e. soft systems thinking, might vary in accordance with the guidelines that have been formulated by the organisations as well as the situations in which the approach is being employed. Additionally, the approach possesses the capability to solve all the difficulties that are involved in the procedure of strategic planning. Thus, it can be stated that the approach of soft systems thinking can contribute largely to one of the imperative fields of management, i.e. strategic planning procedure in the current day context (Presley & Meade, 2002). With regard to the determination of the soft systems thinking concept as a form of strategic planning procedure of Samsung, it has been viewed that the group emphasises more upon two significant aspects that include collaboration and innovative thinking. Another important procedure relating to strategic planning of the group has been observed as its active concentration upon the management of supply chain. In this similar context, it has been observed that the group involves extensively in collaborating with different suppliers with the intention of accomplishing superior competitive position over its chief business market contenders. The group has also established the Partner Collaboration & Enhancement Office in order to deliver dynamic support to the suppliers by providing both financial as well as technical assistances. From a critical point of view, it can be further observed that within the context of soft systems thinking, Samsung attempts to manage its human capital as one of the components of intellectual capital by recognising its employees as precious assets. Hence, the group strongly regards human capital as one of the major driving forces behind its success in the business markets, both nationally as well as internationally. Consequently, in order to deliver world’s most persuasive customer care, the group also focused on introducing a Quality Charter which was especially designed for one of its valuable assets i.e. the employees. The Charter that has been designed by the group exhibits certain important facets which comprise performing customer-centric behaviours, demonstrating professionalism and offering quality workmanship among others. Apart from introducing the concept of Quality Charter, the group has also been identified to make substantial investments in different areas which fundamentally include enhancing the process relating to quality management, supporting specialised skills especially at contact points and most importantly, standardising the system associated with global customer response. Correspondingly, the group strongly realised that the aforementioned business or operational practices would ultimately support them to enhance its competitiveness by a greater extent (Hudson, 2011). Conclusion Strategic Knowledge is quite essential for a specific business organisation in order to recognise, formulate, plan and execute effective business strategies with the purpose of improving its competitiveness and accomplishing predetermined business goals (Zack, 1999). With regard to critically analyse the assertion that intellectual capital cannot be managed at the strategic level, it has been viewed that most of the business organisations prioritises managing their respective intellectual capitals for attaining their expected business targets. In this connection, intellectual capital, which is described as the financial value of different groups of intangible assets belonging to a particular organisation, intends to deliver greater value to the customers. Within the context of strategic knowledge and KM, it can further be affirmed that intellectual capitals are seldom managed by organisations at strategic level due to several challenges and limitations. These limitations primarily include inefficient distribution channels, adverse interrelation with the suppliers, ineffective business procedures and inappropriate utilisation of valuable resources. Moreover, the other imperative factors include staff retirement, shortage of motivation, and deficiency in technological infrastructures along with ownership among others. In relation to the effective management of intellectual capital, Samsung attempts to follow as well as implement several significant measures. These measures can be identified in relation to the organisation’s concentration upon product innovation process, fostering inventive organisational culture, establishing Quality Charter and effectual training programs among others. The group has also strongly realised that by managing its intellectual capital, it can attain superior value from the customers and enhance its competitiveness at large. 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