Knowledge management is a system developed to utilize organization’s knowledge assets in order to achieve its objectives. It is the power of an organization to share knowledge of its products. Organization may also create and use the knowledge of people and process to enhance productivity of the enterprise. Here in this report Toyota’s approach to knowledge management has been analyzed along with its major characteristics.
The 2008 article of Toyota is reviewed and on the basis of same article, various benefits of the approach to organization of Toyota are assessed. IBM, an American multinational technology corporation is chosen in the present report whose approach to knowledge management is compared with the approach of Toyota. Challenges that could be faced by IBM in the implementation of knowledge management system (KMS) have also been assessed. The impact of social media on the approach of knowledge management in the organization will also be analyzed in the current report.
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As per the given article “Tapping tacit local knowledge in emerging markets- the Toyota way”, Toyota has changed from simply transferring knowledge to tapping tacit local knowledge by its local staff in foreign markets. Also Toyota had experienced a global lead in automotive industry with its new strategy ‘learn local, act global’ as well as by applying knowledge based approach to marketing. Toyota has adopted tacit knowledge approach for transferring information within its organization (Lehaney, 2004). Tacit knowledge approach is a personal approach which states that circulation of awareness can be accomplished in the best manner by transfer of people from one part of organization to another. Hence Toyota applied this approach, when it had opened new factory and wanted to transfer the knowledge of production system to new employees (Powers, 2006).
The three major characteristics of adopting knowledge based marketing approach which includes creation of strategic knowledge in the organization, lessons learned for global knowledge management and various implications provided by the approach. Toyota’s IMV (Innovative international multi-purpose vehicles) project was one of the innovative strategic decisions taken by the company. This leads to knowledge creation, product development and huge production to Toyota. The emergence of new strategy was also very beneficial for company which stated the following: ‘learn local, act global’. It has reflected outstanding sales performance of Toyota along with increased profits (Eardley and Uden, 2011).
Hence knowledge based marketing connects the customer knowledge to the capacity of Toyota to address their needs. It considers various internal experiences, skills and attitudes of employees. With the help of this management knowledge approach, Toyota has made the necessary customer values and information transparent. This approach has made easy access of information within the organization of Toyota and has opened the ways towards success and profitability. Also Toyota has experienced the benefits of long term profitability and growth for the company along with increased competitiveness.
Also knowledge based approach has helped Toyota at the time of globalization in managing its core competencies. Toyota also brought the concept of front line management and global knowledge creation with the help of its ‘learn local, act global’ strategy. It has overcome various challenges by applying tacit knowledge approach to marketing (Green, Stankosky and Vandergriff, 2010). Hence it was easy for Toyota to identify and reuse the knowledge resources within the global operations of multinational corporations. Toyota has the strong market orientation which leads to its product success. It has also experienced profitability, high market share and sustainable competitive advantage by implementing knowledge based marketing approach within the organization. This approach focuses on the following: exploitation which means sharing and exploration meaning creation. Hence it is beneficial for Toyota to gain sustainable competitive advantage with the help of knowledge based marketing approach.
The major characteristics of tacit knowledge approach that Toyota has applied in its structure are as follows: tacit knowledge is intangible in nature and it has its direct impact on people’s head. Processing of tacit knowledge changes its understanding as well as different contexts affect the meaning of knowledge collected through tacit approach. Under this approach information and knowledge is shared to the employees of the organization to enhance learning. Under this approach information is shared orally as well as employees learn by their observation. Sometimes experts are also interviewed under the approach (Hussain, Lucas and Ali, 2004).
Hence all the above features along with the three characteristics of knowledge based on management approach of Toyota are related with the company’s knowledge system. Hence it is analyzed that the described approach is very much beneficial for the company to make it grow in long run.
The case of Accenture has been chosen for analyzing various challenges that can be faced by an organization at the time of implementing knowledge management system. Accenture has made effective efforts and used different approaches to establish successful knowledge management practices, as it was one of the first organizations to make investment in knowledge management on a global scale for collecting past experiences and knowledge of consultants. It considers knowledge as a core capability to achieve competitive advantages. The firm has spent more than $500 million on IT and people to support its knowledge management strategy in 1990s.
Further it has conducted a research in year 2002 to obtain practical lessons on global knowledge transfer by assessing its experience. The knowledge management efforts of Accenture was a sophisticated electronic repository system called the knowledge exchange and these ware managed by 500 staff members around the world. Most of the new client projects started with a search of the knowledge exchange for past experience on similar projects. It helped the company to reduce planning time, minimize risk and improve quality of services so that knowledge exchange was the single most important capturing and delivering approach at Accenture.
In the current business scenario, there is a high requirement of developing an effective knowledge management system in the business organizations like Accenture to achieve their main organizational objectives. There are various business objectives of Accenture which lead to development of knowledge management system in the company (Peña, 2002). It wants to achieve competitive advantages over its competitors like IBM, McKinsey, etc to lead in the competitive market. It is very important for the company to have adequate knowledge and information about its customers and competitors to fulfill its objective (Faucher, Everett and Lawson, 2008). Along with this the objectives of Accenture are to provide high quality services and solutions to their clients in timely manner. Knowledge management will help the company to properly collect information about the customers, competitors and market as well as to manage customer relationships by providing good quality services on time. Further knowledge is believed a core capability to achieve competitive advantages so this business objective helps to enterprise to develop an effective knowledge management system.
Further achieving organizational efficiency is also one of the main objectives in Accenture and its fulfillment also needs an effective knowledge management. With the help of getting adequate information, knowledge and experiences Accenture will be able to perform in better way and improve its efficiency and capability in the tough competition of the globalized market (Herrmann, 2011). Along with this Accenture wants to achieve its objectives of long term sustainability and maintaining good position in the market which can also be achieved through effective knowledge management.
Managing information may also provide accurate and useful information and with the help this information the company will lead to long term growth by improving its operational efficiency and continuously providing better and innovative customer services (Kreiner, 2002). Knowledge management is very useful in maximizing company’s potential, which in turn leads to help in resisting the effects of staff turnover in Accenture. The most economic task for the company is to manage its intellectual capital which can also be performed in better way with the help of adequate and accurate knowledge and information. In this way, all of above discussed objectives lead towards the development of knowledge management system in Accenture.
Accenture can be unable to truly harness and transfer management knowledge across its international organization, as a variety of challenges could be faced by the enterprise in implementation of its knowledge management system i.e. knowledge exchange (Seidler-de Alwis and Hartmann, 2008). Such as the knowledge management strategy of Accenture is based on its vision of ‘One Global Firm’. Hence the strategy is not making sufficient consideration for local or regional challenges and there is only one sided flow of information. Further there are a variety of cultural challenges in the global environment but Accenture have not provided adequate support for addressing various cross-cultural challenges (Gao, Li and Clarke, 2008). There is an important role of various local challenges and cultural factors along with global factors so that avoidance of these factors could present issues in implementing knowledge management in Accenture.
Company’s focus on a standardized global KM practice made inadequate allowances for its local offices to address their own needs. It could lead to create hindrance in implementing knowledge management in the company. Further usage of various technologies such as integrated databases and various technological tools in Accenture may create issues in the organization related to implementation of knowledge management (Green, A. Stankosky, M. and Vandergriff, 2010). Along with this, failure in coordinating knowledge management efforts with organization’s strategic objectives, creation of repositories without considering content management issues, etc could also present challenges in implementing knowledge exchange in Accenture.
The management of Accenture can make use of a variety of measures to diminish the possibility of failure for knowledge management system in the company. Some of these measures are as follows:
Balancing Global Integration and Local Responsiveness: For the purpose of developing a successful global knowledge management practice, Accenture can make a balance between various activates of global integration and local responsiveness (Kreiner, 2002). It will help in getting effective support from the local factors as well as in dealing with various local challenges along with global issues for successful implementation of knowledge exchange in Accenture.
Training and development: Proper training should be provided to the employees for reducing chances of failure of knowledge management in the business organization (Gavrilova and Andreeva, 2012). With the help of effective training and development of employees, they will be able to easily adopt the changes implied through knowledge management and solve various issues in related to technologies at the time of implementing knowledge management system.
Effective and continuous monitoring of the system: The management of Accenture can monitor the system from time to time after its implementation (Hicks, Dattero and Galup, 2006). It will help in effectively indentifying minor and major shortfalls in implementation so that these short falls can be address properly on time. Further it can also be analyzed that whether the company is getting advantage from the implemented system or there will be any need for implementing any other new strategy to get benefit from the system (Man, 2008).
Effective coordination: The management can maintain effective coordination between knowledge management system and strategic objectives within the organization (Kreiner, 2002). It will help in easy understanding and accessibility of knowledge management system as well as will reduce the chances of failure of the system in Accenture.
In this way Accenture could reduce the possibility of failure in implementation of knowledge management system and it can also win trust of the people working there (Mårtensson, 2000). Hence overall efficiency can be achieved along with sustainable growth of the company.
It has been well known that knowledge management is very much useful in identification, retention and effective utilization of knowledge for achieving goals of the organization. But arrival of social media has forced the enterprise to rethink about knowledge management and create various challenges (Eardley and Uden, 2011). There are some behavioral and technical issues with the existing knowledge management approaches. These issues are described below:
Behavioral issues: Employee must keep the current knowledge on a regular basis to have valuable knowledge management system. But there is problem in this behavior by many employees as they think they are reducing their value by sharing knowledge.
Technical issues: Technical issues are related with information provided on the organizations’ website is not easy to search. People prefer local search engines and feel that they are much easy for finding information.
Social media is emerging with high speed now days. Social media may act as a boon for knowledge in long run (Lehaney, 2004). It may provide effective searching, availability of unstructured data in an organized group as well as relevant content is provided by social media. For e.g. if IBM or any organization want to know about its staff member than their corporate information will only provide precise data relating to their role, timings, department etc but accessing on social networks may provide additional information related with his hobbies, photos or previous job details. Various companies are moving towards social media driven knowledge management as it requires less management.
Many new employees and juniors require large experience in short time. Social networking may provide them a good source of learning. They may get benefit and can easily interact with higher level. Social media may also lead to harassment for highly knowledgeable people as they will not get any recognition by sharing knowledge on social media (Haerifar, 2013).
According to IBM, knowledge management is a tool for innovation, competency and efficiency by using knowledge effectively. Also it is helpful in designing policies and procedures for the organization which are being used to manage intellectual capital. Some of the similarities and differences in social media and knowledge management are:
Social media may deal with technical and behavioral issues effectively and hence it is beneficial in long run. Social media also removes various barriers to learning such as age, gender etc. Hence enterprises are being forced by this media to reconsider their approaches to knowledge management (Gottschalk, 2007).
It is being concluded from the report that knowledge management is an essential tool for every organization to manage its knowledgeable resources for easy accomplishment of their objectives. Major characteristics of tacit knowledge approach are being assessed from the article of Toyota. An analysis has been done on the various objectives of IBM Corporation in relation to its knowledge management system. From the current study, number of factors has been found out which are affecting the implementation of knowledge based marketing approach in the present organization. Various challenges have been assessed within IBM at the time of implementation of KMS.
It has been concluded that Toyota has applied knowledge based marketing approach within its organization for managing information with the long term objective of overall growth and sustainable competitive advantage. Several measures have also been found out to diminish the possibility of failure of KMS. It is also concluded that emergence of social media has led the organization to rethink on the approaches to knowledge management.
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