Knowledge Management and Information Systems Strategy
Companies practice knowledge management in order to gain competitive advantages. As viewed by Dyer and Obeoka (2009), customer commitment advantage can be improved through a knowledge management system. It improves the efficiency level of the company. In this context, Nonaka (2004) stated that knowledge management system ensures the better efficiency level through innovation and helps the decision making process. Knowledge management system is essential for both the knowledge worker and the expert labour.
Knowledge management system can be treated as the framework of integrated organizational elements that consists of organizational culture, organizational information technology and the organizational store of individual and collective experiences. Organizational goals can be achieved through a knowledge management system and procedures (Earl, 2001). An organization that effectively manages knowledge can be considered as the learning organization. Knowledge dissemination and the responsiveness are considered as one of the most important ways to gain competitive advantages.
Toyota Motor Corporation has attained immense growth from the time of its inception. However, King and Lekse (2006) have mentioned that the company has suffered a lot of problems related to the expansion issue. At the initial stages, the company has started to operate only in Japan and export the cars in some other countries. However, due to the globalization, the company has expanded the operation all around the globe. With the growth of business, the company has adapted many technologies like: lean management, total quality management, etc. All the mentioned approaches have enabled Toyota to capture a significant market share. In addition to that the company has felt the importance of knowledge. It motivated the company to take several knowledge management approaches like development of knowledge sharing networks and the use of tactical knowledge (Nonaka, 2004).
The management of Toyota has understood that the creation of knowledge is not only gathering a pile of information only but also a distinctive process which cannot be imitated or reduced easily. As mentioned by Dyer and Obeoka (2009), the companies need to convert data into information that can be treated as knowledge by collecting, organizing, summarizing, analysing, synthesizing and making the final decision. The management of Toyota practises a knowledge management process that includes knowledge creation, sharing, and security. .
The three stages approaches of Toyota in knowledge management systems:
Toyota provides special attention to transfer the knowledge to its production system to the new employees. For this purpose the organisation selects the core group of employees to the assembly line in any one of the factories of Toyota. After the through study of the production process the employees are sent back to the new factory site. The employees in Toyota acquire information regarding the problems and solutions on the specific matter. In Toyota, employees share information in order to improve the knowledge (King and Lekse, 2006).
Documentation plays one of the most important roles in the knowledge management system of Toyota. As stated by (Earl, 2001), documentations helps to the sequential performance of the tasks. Toyota initiated the IMV project the global manufacturing system needs to be satisfied in the 140 countries.
In the context of knowledge management, knowledge is usually considered as the information handling trouble. It consists of the formation, organization and utilization of knowledge. In order to effectively manage the knowledge management process, Toyota has taken the three steps approaches.
In the first stage, the company acquires information. The information can be procured from the relevant sources (Earl, 2001). In this context, the company has avoided the problem of information overload. To reduce the information overload, the company has taken the help from various industry related websites.
In the second stage, the collected information is sorted out based on the requirements. The information is stored into the database. The relevant data may help the company to have a fair idea about he market and prepare the strategies. The sorted data needs to be structured rationally (Lee and Cole, 2003).
A knowledge management system is considered as the attainment and storage of information in an effective and ready-to-use basis. The advanced technologies and the database management system help the firm to store the data for an infinite period of time. By adopting this method, the company can transform tactic knowledge to explicit knowledge. By storing information in the company databases, the company moves into the third stage.
The third stage is related to the maximisation of delivery and usage of information. As mentioned by Lee and. Cole (2003), significant utilization of information helps the company to achieve the goals. The information utilization can be performed by sharing knowledge among the employees. The information can also be shared through the digital and analogue pattern.
3.0 Background on Costa Coffee:
Costa Coffee is a UK based coffee supplier, headquartered at Dunstable. The company was founded by Bruno and Sergio Costa in 1971. Costa Coffee is a wholesaler of roasted coffee beans to caterers. At present, the company is considered as the second largest chain of coffeehouse in the world. Costa Coffee has grown considerably since its inception. Currently, Costa Coffee operates across 30 countries through 2,861 stores. In the UK, the company has 1,755 restaurants, 1,106 outlets, and 3,500 Costa Express. Costa Coffee has recognized the importance of knowledge management and has an established knowledge management system in place.
In the view of Nonaka (2004), the principle aim of knowledge management is to improve organizational performance consistently through the sharing of organizational knowledge.
The key business objectives set by Costa Coffee in respect of the implementation of knowledge management system can be summarized as below:
- To transform knowledge for adding value to the operations and processes of the business
- To increase profit margin and growth rate
- To enhance competitive advantage over business rivals
Other goals of knowledge management as recognized by Costa Coffee are presented below:
- To increase knowledge assets
- To recognize knowledge as an asset and manage accordingly
- To create a repository of knowledge
3.2 Challenges in the implementation of knowledge management system:
Advanced technology in the form of high-end software and hardware enables faster and secured knowledge transfer across the organization. In this context, Van de Ven (2005) mentioned that limited budget is often a major barrier to effective implementation of knowledge management. Software that is used for archiving, communication, information sharing, data interchange, and workflow management facilitates restructuring of knowledge management. However, allocation of inadequate funds often appears as a serious challenge to the success of knowledge management in Costa Coffee. A solution to this problem is free software available for download. However, free software lacks the proper hardware, bandwidth, and IT literacy. This result in increased costs compared to ‘pay’ software. Security is yet another concern in respect of free software. Cyber crime is a common concern associated with free downloaded software.
Gathering of information to create knowledge inventory is a complicated and difficult task. In this context, O’Dell and Grayson (2010) expressed that creativity and special skills are required for transformation of implicit knowledge into explicit information. Describing certain content could also be difficult or illegal in certain cases. Informal meetings or data exchange through software that are not permitted by Costa Coffee are some of the examples of content barrier. The content that is delivered to a particular recipient might not be understood or properly interpreted by the receiver of the content. King et al. (2002) observed that the use of audio and video files can help in reducing content barriers.
Routines and procedural barriers:
Routines, work processes, and procedure are often conducted as a part of organizational policy and rules. The key purpose of routines, work processes, and procedures is to disclose the actual picture of business operations. However, these routines and procedures often fail to reflect the actual business position of Costa Coffee. As mentioned by King and D.-G (2007), an established standard of procedures can help a firm in overcoming challenges related to work procedures and routines.
Workforce diversity is often considered as a barrier to the effective implementation of knowledge management. Difference in gender, caste, religion, culture, and experience constitutes organizational barriers. In contrast, Huber (2008) observed that effective management of workforce diversity can enhance innovation and creativity in an organization. In addition, psychological difference is yet another challenge to a firm for the implementation of knowledge management. Senior managers of Costa Coffee often consider junior employees to be less important. Senior executives are often reluctant in sharing information with lower level employees. This has a negative impact on the motivation and job satisfaction level of junior employees. Junior level staffs of Costa Coffee might often get influenced by the behaviour and attitude of senior managers.
Human resource is considered as one of the vital assets of an organization. However, improper management of personnel or the workforce is itself a bigger challenge to the success of knowledge management in Costa Coffee. In this context, Hansen et al. (2006) stated that lack of awareness among employees reduces the effectiveness of knowledge management. In addition, lack of proper motivation is yet another challenge faced by the organization while implementing knowledge management. Team members often do not recognize the importance or benefits of cooperation on knowledge management. It is a common perception among employees of Costa Coffee that maintaining secrecy of information helps in higher security of the job.
Proper allocation of organizational resources:
The management of Costa Coffee needs to recognize the importance of knowledge management across the organization. The company needs to allocate sufficient financial resources to the implementation and development of knowledge management system across the organization. Accurate forecasting of future costs is essential for this. Availability of adequate funds would motivate managers and employees towards the effective execution of knowledge management across the organization.
Training and development programs:
Costa Coffee can conduct training and development sessions at regular intervals to enhance understanding capabilities of the workforce. In this context, Cross and Baird (2000) expressed that a combination of soft and hard skills training enhances the effectiveness of training sessions. Hard skills trainings are aimed at increasing job related knowledge and understanding of employees whereas soft skills training sessions improve communication skills of employees.
Costa Coffee needs to ensure meetings and discussions that are accompanied by quantitative data to facilitate proper measurement and evaluation of past performance. B Ell et al. (2002) observed that use of variance analysis helps in identifying gaps between pre-determined and actual results. The key objective of variance analysis is to minimize gap between actual performances of individuals and organization against pre-determined targets. Variance analyses are expected to enhance the quality of knowledge management across the organization. In addition, use of actual facts and figures reduces scope for ambiguity and biasness in communication process.
Proper delegation of authority and responsibility:
In the view of Davenport and Glaser (2002), success of knowledge management highly depends on the delegation of authority and responsibility in the organization. Proper delegation of authority and responsibility reduces organizational conflicts and enhances effectiveness of knowledge management in the organization. Costa Coffee needs to ensure that one subordinate reports to only one superior. This would ensure clarity in the communication process and knowledge management. In addition, psychological differences are brought down through proper delegation of authority and responsibility. Chrolrs and Otler (2009) viewed that organizational conflicts often become hindrances to effective communication process. Therefore, the management team of Costa Coffee needs to focus on designing appropriate authority and responsibility structure.
Employee awareness programs:
It is hard to derive complete benefit of knowledge management without proper awareness among the workforce (Hmadjian and Inchon, 2011). Hence, Costa Coffee needs to conduct sessions to create awareness among employees on the importance of knowledge management. Employees often ignore long-run consequences while focusing on short-term benefits. This often reduces the effectiveness of knowledge management system. Employee awareness programs at regular intervals would also enhance the motivation level of workers. Workers would be more motivated in participating in the knowledge management process. This would eliminate or reduce interruptions in the knowledge management process.
Social media has a major impact on the organisation, specifically in knowledge management systems. In this context, Galbreath (2009) observed that in the shade of the current business environment, knowledge sharing has become one of the key focus to enrich the intellectual property of the organisation. Supporting to this statement, Sharma et al. (2011) acknowledged that social media is most potential media to channelize the knowledge among the stakes of the organisation. In other word, social media being the collection of online services, supports the social interaction among the users that could enable the same in creating and sharing information repository trough virtual media. The basic four social media services, used by most of the organisations are blogging services, social networking services, mobile services and corporate discussion forum services.
On the other side, the social media platforms are often used by the organisations for sharing information regarding experiences and other knowledge about the firm and businesses. In this context, Martinez-Fernandez et al. (2011) found that the knowledge of the organisation could be enhanced through sharing with the other components of the industry.
The social media of Costa Coffee streams automatically feed into the applications that is periodically updated. In that case, it has been observed that the Google Buzz is integrated with the news and press releases that allows the firm to serve knowledge and information to the users. The foursquare check-in capabilities and dedicated YouTube channel features how to videos, which are potential examples of the social media strategies to manage organisational knowledge for its betterment in terms of productivity and customer base.
The Facebook pages could be improved to engage more number of customers and users to share views and knowledge that in turn could enable the firm to improve its productivity. Costa Coffee uses Twitter to post pictures, messages, in order to provide knowledge for customers while promoting the brand as well. Therefore, twitter helps Costa Coffee to gather customers’ knowledge to gather likes and dislikes about the organisation. On the other side, FaceBook pages of Costa Coffee serves a wider array of knowledge for its customers and other stakes regarding the products, services, locations and cultures while gathering knowledge about the changing preferences of customers.
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