Organisation Culture and Change Management - Assignment Example

?Organisation Culture and Change Management Table of Contents Introduction 3 Data, Information & Knowledge 4 Organisational Learning 5 Knowledge Management 8 Knowledge Management in an Organisation 10 Relationship Between Knowledge Management & Organizational Learning 10 Organizational Learning and Knowledge Management 10 Exploring the Relationship between Knowledge Management & Organizational Learning 11 Organisational Learning to Achieve Competitive Advantage and Superior Performance 15 Knowledge Management To Achieve Competitive Advantage And Superior Performance 17 Conclusion 21 References 23 Bibliography 27 Introduction In the study, a critical evaluation will be conducted for the statement “organisational learning and knowledge management are the key factors for achieving organisational competitive advantage and superior performance”. Knowledge and learning goes together. It took more than several hundreds of years for the quite advanced nations to proceed from agricultural to information-driven industrial economies. In the previous decade, the field of knowledge management was new and had generated anxiety and excitement and also achieved increased recognition for the potential that it had to influence the freshly recognised asset called knowledge and in the process bootstrapped the effectiveness of organisations. During the same decade, the conception emerged that it was possible for organisations to learn and create competencies from that learning that would eventually lead to agility and competitive advantage (Bennet & Bennet, 2004). The fact is that knowledge management is quite a new field, so still a significant amount of learning in the way of trial and error is happening. Nevertheless, knowledge management has been victorious in developing quite an important number of processes that are successful and established its value to quite a number of firms as they still keep putting efforts to respond and understand the prospects and threats that arise from a tumultuous environment. A few instances of successful knowledge management processes are knowledge sharing, knowledge acquisition and knowledge audit. While organisational and individual learning have been given recognition as an essential factor for substantial period of time in an environment that is always changing, the idea of organisational learning in comparison to knowledge management is relatively new. This study would mainly focus on their relationship. After providing useful definitions for few of the concepts such as knowledge, organisational learning and knowledge management, the discussion will also involve the importance of organisational learning & knowledge management for being the key factors for achieving organisational competitive advantage and superior performance (Bennet & Bennet, 2004). Data, Information & Knowledge To gain a proper understanding about the relationship of knowledge management and organisational learning, at the outset, an explanation of knowledge can be provided. Knowledge can be best explained as the ability to take necessary and effective action, with the identification that ability includes both actual and potential capability. Knowledge can be in the mind of a person and/or implementing it in the correct way that is taken in a desired situation. It signifies that an action is of use when it provides the desired and anticipated results. Most of the thoughts that are considered normally to form knowledge (Information, Predictability, Facts, Experience, Concepts, Truths, Theories, Intuition, Judgement and Insight) help in adding to form the ability and understanding that are essential to take necessary action, they all can possess knowledge. Organisations and teams might possess knowledge in collective form (both actual and potential) and thus, be able to take actions that any individual cannot take. While knowledge lays emphasis on making sense and understanding (the “how and why”), information is about being aware of something (the “what and who”). Information is considered as a message that is intended to communicate and inform a receiver. Information can be manipulated, stored and shared through soft and hard networks. Data is referred as raw numbers, indicators or markers and might provide the “when and where” (Bennet & Bennet, 2004). Organisational Learning The term ‘organisational learning’ signifies learning of an individual within an organisation, learning of the whole organisation as a single combined body or anywhere that lies within these extremes. Although in most of the cases, organisational learning generally refers to organisation or team level learning. For possessing the required knowledge to take necessary actions need learning in small or large groups or individual learning or learning of the organisation as a whole. From the perspective of knowledge management, all the learning levels are significantly important and all the things must be nurtured and should be made a part of the culture naturally. Till date, in knowledge management, most emphasis has been laid in the areas of creating, locating and sharing of knowledge (Bennet, 2006). Owing to this reason organisational learning is considered to be the ability of an organisation of acquiring knowledge that is necessary to compete and survive in today’s environment. However, it should be observed that there is a significant dissimilarity between organisational or team level learning and individual learning. Individual learning refers to a behavioural or cognitive activity between individuals and the environment that they live in whereas organisational learning is a process which collectively depends on individuals’ exchanges and relationships so that the process related to learning happens primarily through interaction among the participants (Bennet & Bennet, 2004). Individual learning can be achieved with the help of experience, observation, study, cognition, development and practice of mental models, organisational learning, and cognitive versus a social activity happens when there is interaction between groups, sharing of knowledge and collective action in a way that would maximise an individual’s collective ability and capacity in comprehending and taking necessary effective actions (Bennet & Bennet, 2004). Organisational learning needs to share a language, objectives, standards and meaning that are notably different in terms of individual learning. When an organisation learns, generation of social synergy happens which helps in creating knowledge that adds value to the knowledge of the workers and to the overall performance of an organisation. When such ability becomes implanted within the culture of an organisation, the organisation is supposed to have core competency. These attributes are unique to each firm and can hardly be imitated by other organisations. The knowledge that is behind the core competency of an organisation is built over time in the course of success and experience and depends more on spirits and relationships amid the knowledge of the workers which is the total sum of knowledge of each individual workers (Bennet & Bennet, 2004). Since an organisation is created by individuals, so, they are the one who sets up the standards, relationships and processes which enables organisational and team learning. However, the phenomenon called ‘organisational learning’ is more popular than ‘individual learning’. For instance, when workers leave an organisation, proper knowledge management will help the organisation in retaining the corporate knowledge which comes from cooperation, experience and employees collaboration (Mountainquestinstitute, 2009). The specific ways through utilisation of which organisations learn comprises of single loop, double loop, strategic learning and deutero (Sampaio & Perin, 2004). The process of single-loop learning happens when faults are detected and rectified and then after that organisations continue carrying on their goals and policies. The process of double-loop learning happens when the organisation changes and enquires regarding the active procedures, objectives, norms and policies in addition to rectification and detection of errors. Double-loop learning process involves change in the base of knowledge of an organisation or organisation-specific routines or competencies. The process of deutero learning happens when organisations gain knowledge of how to carry out double-loop and single-loop learning. Double-loop and deutero learning both mainly deals with how and why to bring changes in an organisation. Whereas, single-loop learning deals with complying with the changes made without raising questions on core beliefs and underlying assumptions. Single-loop learning may at times stop double-loop learning from happening. To promote deeper learning, organisations need to shift away from structures that are mechanistic and assume organic and flexible structures. This would need a new management philosophy, which would encourage self-reflection, openness and accepting uncertainty and error (Holsapple, 2004). Adopting an approach that is participatory or bottoms-up helps to encourage double-loop learning. There is always dissimilarity involving what people practice and what they say (Bennet & Bennet, 2004). It is important for organisational learning to create, relate and disseminate knowledge. An organisation learns through a cycle and this is identified as the “five learning cycles” which drives the process of learning in an organisation and the support of the practices of knowledge management is also important (Sanchez, 2005) The process of learning through the cycles of five learning represents: Individuals are responsible for creating new knowledge in an organisation The groups, with which the individuals interact with, test, reject or accept and share the new knowledge that is formed by individuals The new developed knowledge is shared among the different groups to decide that whether the new knowledge that has been developed by a particular group is accepted within the organisation The newly developed knowledge if accepted by the organisation is afterwards implanted in new culture, system and the processes of the organisation The new knowledge implanted in the process, culture and systems helps in developing new action patterns by individuals and groups (Sanchez, 2005) Knowledge Management Knowledge management is a methodical process to create, nurture and maintain an organisation in order to make optimum use of the collective and individual knowledge for achieving the mission of a corporate, widely viewed as strong competitive advantage to achieve soaring performance. The objective of an organisation is to be aware of the knowledge that it has collectively as well as individually, and to groom itself to make the utmost use of knowledge, can obtain or already has in an efficient and effective way. Management does not denote controlling in terms of strong direction and authority. This kind of management remains always unsuccessful with knowledge as it is impossible for someone to control the other person’s mind, which has knowledge. As an alternative of this, managers should set examples first through management, leadership and personal behaviour (Bennet & Bennet, 2004). Then, they should try to nurture and create an infrastructure and culture which in turn would inspire the workers to contribute to, produce and use their knowledge and also maintains the freedom to effectively act over an ample range of circumstances (Bennet & Bennet, 2004). Organisations live in a world that is full of challenges and turbulence, so, it is necessary for an organisation to continuously go through the process of learning, should possess the ability to handle changes, complexities and doubts. The infrastructure and culture should be such so that individual groups and individuals should raise questions on their beliefs continuously to form and apply the new knowledge so that it helps in achieving required objectives and goals (Bennet & Bennet, 2004). Knowledge Management in an Organisation Source: (King, 2009). Relationship Between Knowledge Management & Organizational Learning There exists a strong relationship between knowledge management and organizational learning. Organizational learning chiefly intend to recognise the underlying factors in the process of learning with the help of clarifying crucial issues for instance the agents, contents and learning levels. Knowledge management undertakes a hands-on responsibility of offering guidelines explicitly for prevailing actively into the knowledge base of the organisation. It can be said that knowledge management provides a framework of a manager for developing the learning potential of the organisation (Buchel & Probst, 2000). Organizational Learning and Knowledge Management Source: (King, 2009). Exploring the Relationship between Knowledge Management & Organizational Learning An organisation where the skill to take necessary actions and understanding pose a major challenge due to the nature of work or environment of the organisation, both organisational learning and knowledge management become factors of critical importance for its long-term sustenance. As a matter of fact, these fields are of such immense importance that they should be implanted within the culture and philosophy of an organisation in a way where they are mostly visible, continuous and widely spread. To a considerable extent, organisational learning and knowledge management will be inseparable and inter-reliant but should not be indistinguishable. To understand such a relationship few characteristics of knowledge management and organisational learning will be explored to understand the way they harmonise each other to achieve organisational competitive advantage and superior performance (King, 2009). In the present and future business environment, the challenges most faced relate to creating, finding or developing meaning and understanding of the multifaceted situations and events that arise from quick, complicated and uncertain world that is continuously changing. When major shifts in paradigm take place in the environment of an organisation or within the organisation’s own vision or strategy, the organisation faces the ultimate challenge to find a fresh self-image, give up the present doctrine and replace the beliefs that are firmly held with those ones that represents the recent reality more accurately. It has been noted that organisations face great difficulty when encountered with the want of rethinking the basic beliefs and assumptions due to speedy shifts in the landscape of the organisation. This is exactly at this point when the organisational learning is put under the utmost test and where the need of existence of knowledge management arises. Sharing knowledge is not easy but to discontinue old beliefs and practices that had worked quite well previously is way harder. As mentioned in the above study, this would need double-loop learning which is mainly difficult for senior workers with knowledge. Focusing on the strategy, vision and mission of the organisation, knowledge management should be capable of detecting changes and differences in the world outside. Organisational learning is then faced with the challenge to identify the fresh learning that would succeed to replace old with new knowledge (King, 2009). To be precise, global organisations that are quite large encounter the challenge of gathering and collecting the combined knowledge in certain manners that are process-oriented and elastic instead of being determined centrally. For this reason, few companies have systems of knowledge management that are formalised that create roles in case of knowledge management and enhances databanks, which includes the development of electronic ways to share stories of knowledge all through the company. For instance, IBM has prepared story telling web pages to encourage knowledge sharing which in turn would encourage organisational learning as well (Tietze & Et. Al., 2003). Another instance is the company 3M. The company’s objective is to lead in the field of innovation. For this reason, the company makes use of a varied range of systems of knowledge management. The company 3M focuses on “tacit to tacit” area believing that if this functions properly then the other features of knowledge management would fit into places more freely. The eagerness of sharing knowledge among the individuals is affected directly by the company’s culture (Brand, 1998). It would be ideal to implant organisational learning within a program of knowledge management. For achieving this, there would be a requirement of workers with knowledge network, leaders and managers who needs to be supported by a sound infrastructure of processes and technology, with the help of a structure within the organisation to collaborate teams along with sharing and learning culture. This combination will for sure improve the ability of an organisation to bring changes in the rate of learning and unlearning. The goal should be providing quick internal dexterity, adjustment and valuable external influence on the environment (Bennet & Bennet, 2004). Organisations are more and more focusing on the idea of organisational learning in ensuring increase in their innovation, competitive advantage and effectiveness. Through the process of sharing knowledge, knowledge management, influence both organisational as well as individual learning. By the process of improving the speed and quality of communication and by understanding the changes and problems that surrounds an organisation, knowledge management and organisational learning together enhance the quality and value of decisions taken by the organisation and also the effective impact of implementing them. Organisations know it well to increase their efficiency and adaptability during changing times. Learning is said to be a continuous process which confirms itself with the continuous nature of changes in the organisation, as cited by high morale, collaboration, innovation and cultural shifts, especially through the times of external challenge and uncertainty. Both organisational learning and knowledge management use generation of knowledge and sharing of knowledge as elements of foundation. In order to achieve success, these capabilities calls for great extent of concentration towards human factors such as responsibilities along with roles, motivation, understanding, trust and respect, self-image, integrity and honesty and the value of relationships which are interpersonal throughout the organisation. Organisational learning is reliant on a few factors such as culture, leadership, technology, strategy, structure and environment. Knowledge management helps in nurturing and creating these crucial factors to make the best use of the knowledge of the organisation (Bennet & Bennet, 2004). Organisational Learning to Achieve Competitive Advantage and Superior Performance Academicians and executives provide organisational learning a lot of importance and consider it as a part of theoretical prolegomenon and social technology. The reason behind the interest of business executives can be credited to organisational learning as a means that is provided for fighting the competitive behaviour of sophisticated level that is observed in most industrial marketplaces and consumer goods. A firm should work hard and struggle for characteristics that are unique so that it can be easily distinguished from their competitors by the consumers. Therefore, competitive advantage is the capability of offering customer value of superior nature in a continuous basis. The situation should be made such so that it becomes tough for the competitors to emulate the capacity of the firm for creating value. Competitive advantage is achieved when the resources of an organisation are appropriate, valuable, cannot be imitated easily and rare. Achieving better-quality performance and competitive advantage are functions of the capabilities and resources that are introduced in the competition. These capabilities and knowledge resources that comes out as a result of the processes of learning indicates an improvement in the responding capacity by developing a sense of understanding of the environment in a broader sense (Njuguna, 2009). The process of organisational learning helps people in discovering that why the problems are looked at from the viewpoint of a single dimensional framework and poses question regarding the present systems and challenges paradoxes as and when they occur. A superior ability to learn is keeping in mind the accelerating markets and due to the changes in technologies, flaring of the market data that is available and the significance of action which is anticipatory. It is thus a precious foundation of competitive advantage due to its difficulty, usefulness and complexity to imitate. The foundations of competencies that are unique are internal and not external which are taken from the method an organisation employs its resources in terms of its competition. In compliance with the following concerns, learning through developing a sense of better understanding eases change in behaviour that eventually leads to better and improved performance (Njuguna, 2009). Whereas, the view associated with knowledge-base, portrays organisations as stockroom of competencies and knowledge. In accordance to the view, transferring and creating knowledge from their capabilities of superior nature provides more organisational advantage to the firms than markets. Through this way, the firms progress their perceived and real market values. Thus, accumulating knowledge through the process of learning composes a driving force towards the growth and development of firms, because acquiring knowledge augments the ability of the firm to attain a position that is competitive compared to its competitors. This further adds to the reality that the faster learning ability than its competitors and management of knowledge might be the sole competitive advantage which would make organisational learning and knowledge management a competence that should be developed by all the organisations in today’s competitive and fast changing environment. Therefore, it can be said that performance that is above average can be achieved by a firm only with the pursuance of strategies that are related to organisational learning which provides competitive advantage that are tough to emulate. Human, organisational and social capital along with effective systems of knowledge management enhances knowledge transfer across the borders units, individuals, departments and organisations which lead to competitive advantage (Njuguna, 2009). Knowledge Management To Achieve Competitive Advantage And Superior Performance Knowledge is withheld between the employees of an organisation and so interaction among the employees is needed in order to get access to the knowledge to improve the process of organisation further and achieve competitive advantage. Knowledge is held amid collectives and individuals within the systems and processes of organisation leading to consideration of the sociological and personal needs of the collectives and individuals in knowledge learning and genesis. Knowledge according to “Knowledge Creation Theory” is categorised as tactic knowledge and explicit knowledge. Tactic knowledge includes technical skills, beliefs, point of views and know-how and it also involves individual activities for instant new product development, solving of technical problems and customer interactions that could be shared and augmented through well-built and caring relationships and interpersonal interaction between the members of the organisation. The mode of deriving tactic knowledge from tactic factors is a significant source of knowledge that is effective. An instance of tactic knowledge approach is Philips, the electronics company that is famous globally. The company created “yellow pages” which has a list of all the experts with knowledge of different kinds within the business units of the company (Sanchez, 2004). Whereas, explicit knowledge relates to activities such as production designs that are computer aided are performed by applying technologies, inbound logistics, procedures of formal standard and supply ordering are easily artificially captured through manuals and can be shared through taught courses or books among others. Deriving explicit knowledge from explicit factors is a significant resource of technical knowledge. To successfully implement knowledge management in an organisation which would provide competitive advantage, it is first important to know the elements of infrastructure: Technology, People and Process which are essential to provide support to the acquisition, transfer and management of explicit and tactic knowledge. Both communities of academy and business believe that competitive knowledge can be achieved by knowledge leveraging. Workers with knowledge play a significant role in leveraging knowledge by distributing knowledge in the organisation. Competitive advantage is not achievable if the worker with knowledge is not accurately mobile and also if the understanding and knowledge of the knowledge worker is distributed asymmetrically within the organisation. To have consultants as outside workers of knowledge take out a standpoint which is different related to the issues that are faced in sharing and maintaining knowledge in the organisation. Knowledge workers make a decision on how vast their knowledge yield will be and what needs to be contributed in terms of knowledge in the organisation (Ibrahim, 2011). For few, knowledge management is regarded as a strategy of putting and sharing information into deeds to improve the performance in an organisation with the help of communicating the correct knowledge to the correct people at the correct point of time and to achieve superior performance both empirical and tactic knowledge needs to simultaneously be maintained. Knowledge management, according to Kalling (2003), has three divisions namely utilisation, capitalisation and development relating to the assumptions that use of knowledge does not always happen and the utilised knowledge always does not help in superior performance (Kalling, 2003). It was observed that transferring knowledge among units within a corporation does result in improved productivity and the connection between performance and knowledge often results in non-financial performance because of less interest in utilising knowledge by the employees and managers in an organisation. It was found in a research conducted by Zack & Et. Al. (2009) that knowledge management’s potential for creating competitive advantage was correlated positively to superior performance but no direct relationship between financial performances and knowledge management, was observed (Zack & Et. Al., 2009). Employing of capabilities and assets that are related to knowledge in the operations of the organisation could be used for attainment of competitive advantage which would subsequently lead to superior performance. It should be noted that achieving superior performance is only possible by utilising knowledge in an organisation. According to Darroch (2005), knowledge management has an important function of offering to synchronise mechanism in order to enhance the process of converting resources into competence (Darroch, 2005). Hence, it can be derived that organisational learning is the key attribute behind achieving competitive advantage. With the help of organisational learning, new knowledge is developed by the people working in an organisation individually, which are then distributed among the groups through sharing. The organisation benefits from this as new information is gained on a whole which helps forming new strategies or modifying the existing ones according to the need of the changing market which makes the organisation stronger than its competitors. Organisational learning is a process that is continuous in nature, so, the organisation should keep itself updated regarding any information that would be beneficial for the organisation. Proper information should be collected about the market, products, technology and the competitors to keep pace with the environment. In the earlier days, managers were considered to be the only person to possess information about everything related to the business and they dictated the employees of the organisation. However, the picture is lot more different today as there is a lot more competition and things keep changing every moment and it has been observed that competitive advantage and superior performance can only be achieved through group effort. For this reason interaction among employees in organisations are encouraged a lot these days because this is the way by which information gets shared. Organisations are today much more open to the recommendations and suggestions of the employees and they are treated with importance. For instance, Cadbury is known for its products and innovations. At Cadbury, employees are encouraged to come up with new product ideas that could be beneficial for the company or suggest changes. Every year the new product ideas are screened and the ideas that get shortlisted are sent for feasibility test and after that the best option is chosen and the employee is rewarded. This is how Cadbury keeps innovating products and attains competitive advantage over others and is considered to be the best in its sector (Woodgrange Technologies Ltd, 2000). Conclusion From the above study, it is quite apparent that organisational learning and knowledge management plays a significant role in attaining competitive advantage and superior performance. Knowledge management is related to organisational learning to a great extent. Organisational learning means the process of learning of an organisation through external as well as internal information or knowledge. However, learning alone cannot help to achieve competitive advantage and superior performance. This is where knowledge management comes into reality. Managing the collected information or knowledge is the most important job. Knowledge management helps to manage the knowledge that facilitates the organisation to access them and use them at times of need. It is not possible to apply every information and knowledge in every situation. Knowledge management helps to differentiate between them and ensures proper application of them in the needed field. Knowledge management communicates the correct information to the correct people at the appropriate time. This also helps the organisation to gain competitive advantage as proper exploitation of information will surely provide an edge to the organisation. Competitive advantage is an outcome of superior performance because when the performance in an organisation is superior, the organisation is bound to gain competitive advantage over other organisations. Therefore, in a way both competitive advantage and superior performance are interrelated. Competitive advantage is gained by exploiting all the available information properly in an effective way. Unless this is done competitive advantage cannot be achieved and exploiting the information would need superior performance. Knowledge management ensures that the resources in an organisation are employed to the optimum level. Competitive advantage and superior performance is a result of such a process. 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