BBA Emphasis Knowledge Management Study Material Notes
Table of Contents
BBA Emphasis Knowledge Management Study Material Notes: Results of Knowledge Management Characteristics of Knowledge Intensive Organisations Implementing knowledge management Programme Defining Knowledge management Strategy Mergers and Acguistrions Changing Workforce Profile Increasing role of women employees Newer Organisational designs Approaches to meet Environmental Challenges :
MCom I Semester Foundation Group Behavior Study Material Notes
EMPHASIS ON KNOWLEDGE MANAGEMENT
In recent years, more emphasis has been put on knowledge management so that any knowledge created at any place of an organisation is shared by all relevant organisational members and duplication of effort to create the similar knowledge is avoided. Throughout the world, it has been recognised that the fundamental sources of wealth creation are no longer natural resources and physical labour but it is the knowledge that has become the pre-eminent resource and has come to play a dominant role in any type of organisation. Therefore, there is increasing emphasis on practising knowledge management in all types of organisations, whether operating in information technology or traditional industries such as manufacturing, health care, civic services, and so on.
Before understanding the concept of knowledge management, let us go through the concept of knowledge. In defining knowledge, there is a basic problem in that there is no common definition that captures the essence of knowledge. Dictionary meaning of knowledge is that which is known, information, enlightenment, practical skill, acquaintance, etc.” Different words that have been equated to knowledge have different connotations. However, from the point of view of knowledge management, knowledge may be defined as actionable wisdom that results facts, information, and techniques in a particular field. Thus, knowledge is more concerned about how an action’ rather than concerning merely with what and why an action”.
White hill has categorised different types of knowledge: encoded knowledge (know what). habitual knowledge (know how), scientific knowledge (know why), collaboration knowledge (know who), process knowledge (know when and where), and communal knowledge (care why).11
Blackler has categorised knowledge that can be embrained (conceptual skills and cognitive abilities), embodied (action oriented), encultured (shared understanding), embedded (systemic routines), and encoded (signs and symbols transmitted through information technologies).12 Based on the above concept of knowledge, knowledge management can be conceptualised. In a simple way, knowledge management is creation, sharing, and use of knowledge organisation-wide. In a more formal way, knowledge management may be defined as follows:
Knowledge management is creation, distribution, and utilisation of knowledge at the individual, group, organisational, and community level through harnessing of people. process, and technology for the benefits of those involved and affected by it.
Thus, in knowledge management, there are three basic elements: knowledge creation. knowledge sharing, and knowledge utilisation. Let us discuss these elements.
1 Knowledge Creation. Knowledge creation involves generating facts, information, and techniques that are relevant to an organisation and those associated with it. Knowledge creation uncovers new knowledge through several avenues-research and development, experimentation, creative thinking and automated knowledge discovery, benchmarking best-in-class practices, process improvement projects, feedback from customers, observing customers, and so on. A basic feature of knowledge creation is that it is a never-ending process; it keeps accumulating (but discarding the obsolete one), changing, and regenerating to suit the times.
Individuals and groups can possess both explicit and tacit (implicit) knowledge. Explicit knowledge follows tacit knowledge in a natural way. While explicit knowledge that is embedded in organisational policies, procedures, routines, roles, etc. can be relatively harnessed through information technologies and other mechanisms, there is a challenge in tapping tacit knowledge because sometimes individuals who possess it are not aware about it. For example, Polanyi, an early proponent of tacit knowledge, has observed that “human beings know more than what they can tell or have a power to know more than they can tell.” For example, if a singer who sings well is asked the question “how do you sing well ?”, the reply may be “I do not know, it just happens.” In spite of this problem, there is a need for tapping tacit knowledge and share it, as explicit knowledge is dependent on tacit knowledge. In fact, tacit knowledge or skills can have varying degree of being explicit. Ambrosini and Bowman have suggested the use of ‘causal mapping’ as a technique to surface tacit knowledge. 13 Causal mapping focuses on action that is context specific by ordering and analysing something that is fuzzy. The tacit knowledge process can include focus groups, semi-structured interviews, story-telling, and metaphors to peel layer after layer of hidden knowledge. In fact, successful Japanese companies are operationalising tacit knowledge and often highly subjective insights, intuitions, and ideas of their employees for improvement and innovation.
2 Knowledge Sharing. Knowledge sharing involves communication and distribution of knowledge organisation-wide. When a new knowledge is created in the organisation, it is stored in organisation’s database for its wider dissemination. The primary tools applied in knowledge sharing are information technology, process engineering, and organisational dynamics. These three work in concert to streamline and enhance the capture and flow of an organisation’s knowledge to deliver it to individuals and groups for whom a given knowledge is relevant.
Information technology makes it possible to capture, store, and transfer knowledge from one point to another. With extensive use of Internet and Intranet, knowledge sharing has become easier even at the global level. Process engineering involves how organisational workforce works and how it learns. Thus, personnel rotation, education and training programmes, standardisation programmes, and site visits are good methods for knowledge sharing. Organisational dynamics shows the pattern of personnel interaction. In interaction process, knowledge can be shared. Thus, individuals and groups share knowledge through meetings, either of formal nature or of informal nature.
3. Knowledge Utilisation. The third element in knowledge management is knowledge utilisation, that is, using knowledge to solve problem for which it has been acquired. Unlike other resources that deplete when used, knowledge can be shared and used and grows through this process. “Knowledge perishes when it is not used; it increases when it is used, knowledge is essentially ‘self-regenerative’ and ‘feeds on itself’, such that the identification of a new piece of knowledge immediately creates both the demand and conditions for the production of subsequent pieces.”
Results of Knowledge Management
Knowledge management leads to create and sustain competitive advantage for an organisation by:
1 Prevention of re-inventing the wheels at different places, that is, doing a work that has already been completed by someone else. This saves time, money, and effort of the organisation.
2. Stimulating and enabling creation of new knowledge organisation-wide. This practice helps in improved way of working resulting in better quality products/services with lower cost.
3. Organisation-wide unity of thinking together with higher employee motivation. This results in better work coordination, better work and environment, and better employee commitment. All these result in higher employee productivity.
Characteristics of Knowledge-intensive Organisations
Nowadays, more and more organisations are involved in practising knowledge management. Such organisations are known as knowledge-intensive organisations. Such an organisation is one which is skilled in creating, acquiring, and transferring knowledge and modifying its behaviour to reflect new knowledge and insights. The basic characteristics of a knowledgeintensive organisation are as follows:
1 It has a shared vision which can stem from varied places but is nurtured by the top management.
2. It understands that knowledge is dynamic and that it adds value when it is in motion and in use.
3. It values creativity, flexibility, adaptability, dialogue, and learning.
4. It becomes receptive to new ideas and overcomes the desire to closely control operations.
5. It believes in generating new knowledge, sharing meaning, and using language as tools.
Measuring the Knower: Towards a Theory of Knowledge Equity,” California Management Review uses empowerment and charismatic leadership to build a shared vision, empowe people, generate commitment, and stimulate effective decision-making throughout the organisation. focuses on customer intimacy, market intelligence, and effective feedback.
Thus, a knowledge-intensive organisation is capable of systematic problem solving experimentation, learning from past experience, learning from others, and transforming knowledge quickly by adopting systems approach. It sees information technology as a medium to lacintate relationships, encourage continuous learning, and sharing knowledge. It believes that things have to be reinvented, innovation is competitive advantage, adaptivity is survival, learning is the key, and knowledge is tomorrow’s product.
Emphasis Knowledge Management
Implementing knowledge Management Programme
Knowledge management is a continuous process: knowledge creation, sharing and use are not one-shot action. However, for making an organisation knowledge intensive and imbibing it in its day-to-day practices require a specific programme. Once this programme becomes operational and maintained, creation, sharing, and use of knowledge may become a continuous process. A knowledge management programme has the following elements:
1 Defining knowledge management strategy,
2. Organising knowledge management programme, and
3. Reinforcement for knowledge management.
Defining Knowledge Management Strategy. Before the knowledge management programme is put into action, it is desirable to define knowledge management strategy so that a systematic approach is followed. It is better that such a strategy is defined with the active involvement of top management so that its commitment and support are ensured. Knowledge management strategy contains why, what, whom, and how of knowledge sharing. The contents of each of these are as follows:
1 Why to share knowledge. The first issue that should be clearly specified is: why to share knowledge. In fact, knowledge for the sake of knowledge has no relevance; it must be used for organisational betterment in some way. Knowledge management strategy should specify the way in which the organisation will be better off through practising knowledge management. In this globalised economy, knowledge management enhances organisational position through enhancing creativity and innovation, providing perception of opportunities, increasing speed and quality for product delivery, lowering operation cost by avoiding redoing of the same work, and enhancing satisfaction level of employees.
2. What to share. What to share aspect of knowledge management is derived from its why to share aspect, that is, that aspect of knowledge should be shared with others which meets the organisational objectives of practising knowledge management. Various aspects of knowledge that can be shared are technical know-how, managerial know-how.competitive intelligence, operational processes, etc. Sharing of all these has its cost and benefit. Along with issues involved in sharing, issues related to quality and authentication of what is being shared should also be addressed.
3. With whom to share. After defining why and what to share, it is important to define with whom to share knowledge. There are different types of people and organisations with whom knowledge can be shared. They are internal employees at various levels, customers and suppliers, shareholders and financiers, research organisations, collaborators, etc. Choosing with whom knowledge is to be shared should be decided in the light of why and what to share because everything cannot be shared with everyone. This is true for personal life as well as work life.
4. How to share. Decision about how to share knowledge with others is the last aspect of knowledge management strategy. At this stage, the decision about mechanism of knowledge sharing is made. There may be different channels for knowledge sharing such as personal face-to-face contact, deputing personnel to the sharing parties, computer networks internally and externally, etc. Depending on the nature of parties, a particular channel may be chosen. Organismg Knowledge Management Programme. After defining knowledge management strategy, steps should be taken to organise knowledge management programme, For organising knowledge management programme. a knowledge management unit should be established. This unit may be located either as independent or may function as a part of any other department of the organisation, preferably with information systems department. Irrespective of its location, the functions of knowledge management unit are as follows:
5. Personnel allocated to the unit have overall coordination and facilitation responsivebility
6. Operational managers in the knowledge networks and the regions are responsible for implementing the knowledge sharing programme.
7. Governing body in the form of knowledge management committee is responsible at the corporate level for the overall knowledge management policy formulation. Besides constituting knowledge management unit, the organisation should undertake the following steps to implement knowledge management programmes:
8. Providing budget for knowledge sharing. Knowledge management programme involves cost in the form of outlay on physical facilities, information technology, personnel involved, etc. Therefore, a budget should be prepared in advance of launching knowledge management programme. It is better that this budget has the approval of top management of the organisation
9. Choosing technology for knowledge sharing. Knowledge can be shared by using a channel which is provided by the technology chosen for this purpose. Generally, information technology, consisting of computer hardware, computer software, database, and telecommunications, is the most suitable for knowledge sharing throughout the organisation and its various constituents. The technology chosen should match the requirements of knowledge management among the organisation and its various constituents.
10. Communicating the value of knowledge sharing. Before the knowledge is shared among various constituents, it is essential that they are communicated about the value of knowledge sharing, how it will be useful to them and the organisation, and what processes can be adopted for knowledge sharing. If necessary, knowledge sharing workshops, fairs, etc. can be organised for the purpose. Once various constituents are convinced about knowledge management, knowledge sharing becomes easy dopting methods of knowledge sharing. At this stage, various methods of knowledge should be adopted. Knowledge in an organisation can be shared in the following! forms:
Reinforcement for Knowledge Management. Reinforcement for knowledge management is necessary to make it a part of organisational processes and practices. Reinforcement is anything that increases the strength of a new behaviour and tends to induce repetition of that behaviour. Sharing knowledge is a kind of new behaviour. If it is reinforced, it tends to continue. If it is not reinforced, it tends to become extinct. Therefore, reinforcement should be provided so long as knowledge sharing does not get imbibed into personnel. To provide reinforcement for knowledge management, the organisation can do the following things:
1 Introducing new incentives. For practising knowledge management organisation-wide, it! is necessary that new incentives are introduced. Incentives are those objects that are perceived by people as being important to satisfy their needs. Incentives may be in financial or non-financial forms. Both these incentives can be applied at the same time. When knowledge sharing is introduced in an organisation, employees tend to put question as to how they are going to be benefitted by this process. If they feel that they will derive benefits (satisfy their needs), they will accept it willingly otherwise not. Therefore, there is a need for providing suitable incentives to employees.
2. Providing support for knowledge sharing. An organisation should provide support to employees for knowledge sharing. This support not only facilitates knowledge sharing but employees also feel that top management cares for them. Such a feeling works as a strong motivator for employees to engage in knowledge sharing. Support for knowledge sharing does not mean mere providing physical facilities but providing psychological support which Is much more important for employees.
Emphasis Knowledge Management
Making Knowledge Management Effective
In the present competitive scenario where human resources are being used as means for developing competitive advantage, organisations should take suitable steps to make knowledge management practices effective. Steps given below can be used to make knowledge management effective:
1 The organization should create a culture that stimulates knowledge sharing and learning.
2. It ensures that the users’ need matches the type of knowledge and the type of systems used to transfer knowledge.
3. It must ensure that the users believe that knowledge sharing is useful for them and support knowledge management programmes.
4. Users must be motivated to be willing to travel and share knowledge with others.
5. Experts must be made available and help teams to solve tough and unusual problems.
6. It is better to have different knowledge-sharing systems for different groups of employees
7. There should be the integration of knowledge and organizational practices. In practicing knowledge management, managers face challenges of the following types:
8. In many situations, the knowledge creator is not in a position to describe fully how he has created knowledge. This happens mostly in the case of tacit knowledge which is not explicit. For example, a person who sings very well may. perhaps, not be able to explain how he sings so well. In such a situation, it becomes difficult to share knowledge which is prerequisite for knowledge management.
1 People who create knowledge may be unwilling to share it with others as they perceive that this is one of the important bases of power. It may be mentioned that information or knowledge has been a source of power through ages. In such a situation, practicing knowledge management becomes difficult.
2. For practicing knowledge management, a learning organization is required. A learning organisation is one which is competent in creating, acquiring, sharing knowledge. and modifying its behaviour to reflect new knowledge and insights. The culture of such an organisation has mutual trust and respect, mutual cooperation, openness, and empathy. The question is: can managers create such a culture?
Emphasis Knowledge Management
MERGERS AND ACQUISITIONS
Every organization strives for growth which may come either through grassroots projector mergers and acquisitions acquisitions, and many companies h example, Hindustan Lever, ICI India. RP many overseas companies are acqui companies; many Indian IT companies are While mergers and acquisitions have bu they create the challenge of integra of proper integration between the two which have been shown by various case Post-merder and acquisition, integration involves three phases cleaning up and building the foundation through change in top management, protection of existing management at the next layer, financial reporting system, and functional discipline: strategic and organisational revitalisation, through vision and values, structural reorganisation, workforce rationalisation, and skill updating: and integration of people and operations through functional integration, systems integration, strategic investment and market expansion, and two-way flow of people at different levels. 15 While integration of non-human dimensions is easier, problems come in people integration because of two reasons: people attrition and difference in management practices.
People Attrition. In many cases of mergers and acquisitions, rate of people attrition is very high. This happens in those cases where the work culture of acquiring company is not perceived to be positive as compared to that of acquired company. If key personnel of the acquired company leave it, the merger and acquisition becomes meaningless. This problem is similar in industrial companies as well as in knowledge-based companies.
the difference in Management Practices. Management practices in acquiring company and acquired company may differ. Such differences may be on the following aspects:
Emphasis Knowledge Management
1 Matching jobs and individuals-high matching versus low matching.
2. Development of people-high concern versus low concern.
3. Performance appraisal-modern versus traditional.
4. Compensation-competence-based versus job-based.
5. Promotion-merit-based versus senority-based.
6. Participation-high versus low or nil.
7. Work culture-high performing versus low performing.
Emphasis Knowledge Management
In these situations, managers have a big challenge to integrate the people of acquired company with the working pattern of company as people of the acquired company tend to develop the following feelings:
1 Initial anxiety and stress in the mind of people.
2. Fear of loss of jobs.
3. Transfer to new locations.
4. Job changes including new roles and assignments.
5. Change in remuneration and benefits.
6. Change in career paths.
7. Change in power, status, and prestige.
8. Problems of adjustment with new organizational culture and work practices.
Managers have the prime responsibility of overcoming these feelings of personnel of the acquired company as they are primarily concerned with integrating individuals and organisations. Since mergers and acquisitions have become quite common these days. managers have to devise suitable strategies for proper integration of people.
Emphasis Knowledge Management
CHANGING WORKFORCE PROFILE
Over the period of time, there has been a tremendous change in Indian workforce profile Earlier, our labour force was considered to be literate and all human resource activities to be feared to meet job demand and expectations based on that illiteracy. Now the Paratively younger, and have high expectations. This is true with managerial personnel 00. Exhibit 4.1 presents the workforce profile in Reliance Industries to show the type of personnel employed by it.
Today’s workforce is comparatively younger than their predecessors. With the increasing facilities for acquiring skills in management and technical field, the average age of executives has dropped considerably. For example, in Infosys Technologies, the average age of employees is 25 years. At the level of CEOs, “in the last five years, the age of the CEO has dropped from 47 to 40 years,” says Ronesh Puri, Head of Executive Access, a personnel search firm. He further asserts that either you make it to the top by 45 or you don’t. After 50. It is death. Even we have stopped accepting bio-data of people above that age because you can’t sell them unless they are brilliant or looking for non-executive positions With the changing profile of people, their expectations have also changed, both in terms of financial compensation and working conditions. While these expectations are relevant for the entire workforce, the increasing role of knowledge workers and woman employees has posed additional challenge to managers.
Emphasis Knowledge Management
Increasing Role of Knowledge Workers
The profile of knowledge workers is completely different from that of other types of workforce. With increasing use of knowledge in economy, the economy has been divided into two broad groups: old or industrial economy and new or knowledge economy. Knowldege economy derives its strengths from use of knowledge of its human resources. Human resources in knowledge economy are known as knowledge workers. Though the concept of knowledge workers may include all human resources who are primarily engaged in getting things done through the use of knowledge, from management point of view, knowledge workers are those individuals whose jobs are designed around the acquisition and application of formation, for instance, jobs in IT or IT-enabled services organisations. Knowledge workers d to be different from other workers; they have certain unique personality and upational characteristics.” Because of unique characteristics of knowledge workers.
Emphasis Knowledge Management
1 Challenging Jobs. Knowledge workers want to have change ODS. Knowledge workers want to have challenging jobs which require the biology and practice. While this is a welcome feature from organisation’s view, it poses practical problems. No organisation can provide latest technology in totany as it also requires people for work that is routine and maintenance-oriented.
2. Autonomy. Knowledge workers are quite creative and innovative, and creativity and innovation cannot flourish in tightly-controlled work environment. With the result, knowledge workers need more autonomy and work culture characterised by decentralised decisions making, open communication, facilitative leadership, and debureaucratised structure.
3. Immediate Feedback and Rewards. Knowledge workers tend to consider themselves as high achievers; a high achiever looks for immediate feedback about his performance. Knowledge workers want immediate and frequent feedback from their peers, team members, and leaders. When they think of a breakthrough idea, they want someone around to talk about it. Similarly, they require and expect immediate and frequent rewards in recognition of their good work.
4. Professional Commitment. Knowledge workers show more commitment to their profession as compared to the organisations they serve. While professional commitment is a welcome sign as it enables knowledge workers to continuously update their knowledge and skills, but this is a dangerous sign from employing organisation’s point of view. Knowledge workers tend to seek positions that facilitate life-long learning. In this process, they switch from one organisation to another. It may be mentioned that turnover rate of knowledge workers is significantly higher as compared to other workers.
5. Lifestyle. In general, in today’s context, every employee prefers a lifestyle which suits him most. This is happening because of environmental pressure which tends to create stress. However, knowledge workers tend to give very high importance to lifestyle. That is why they prefer those employers whose employment practices promote work-life balance through measures such as flexi-time, telecommuting, job sharing, health promotion, and on-the-job child care.
Based on the above characteristics of knowledge workers, managers have to: (1) Recruit and select those knowledge workers who fit with overall job requirements. Only technical competence of knowledge workers should not be taken into consideration. The findings of a recent research on IT professionals reveal that technical skills play a smaller role as compared to soft skills: managerial and leadership competencies are most wanted by IT professional followed by competencies relating to business domain, self/role/organizational issues. knowledge management, customers, and project and process management. 18 (2) Develop behavioural competencies in knowledge workers to support their technical competencies. (3) Create an environment in which knowledge workers can work up to their full potential.
Realising the importance of knowledge economy and the role of knowledge workers therein. many companies in knowledge economy have changed the name of their HR department to knowledge management department.
Emphasis Knowledge Management
Increasing Role of Woman Employees
Throughout the world, there is increasing role of woman employees, both in managerial cadre and non-managerial cadres. In India, there are several companies which have launched special recruitment programmers for woman employees. For example, Dadiseth. former Chairman of Hindustan Lever, comments “We are making a significant commitment to recruiting women. Our vision is that in five years, 20 per cent of our managers will be women. We understand the dilemma facing many talented women-how best to balance the needs of a professional career and the family. While we have not figured out all the answers, we will now support flexible work timings and careers, and sensitive to the constraints of dual career families, among several other things that we are committed to doing. 20 Employment of women presents several challenges which managers have to face. These are in the form of balancing career and family life, prevention of sexual harassment. and prejudices against women.
A woman employee faces the problem of maintaining her career and family life. The responsibility of woman employees is more for managing home as compared to their counterparts because of the traditions developed and practised through ages. Therefore, how to manage these dual roles is a big question for them. Though this problem cannot be avoided altogether, this can be overcome to some extent by providing job opportunity to spouse in the same organisation or in the same city, by adopting flexible timing, etc. Sexual harassment is another problem faced by woman employees. Equal Employment Opportunity Commission (EEOC), USA has defined sexual harassment as unwelcome sexual advances, requests for sexual favours, and other verbal or physical conduct of a sexual nature constitute sexual harassment when:
Emphasis Knowledge Management
1 Submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment;
2. Submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual; or
3. Such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment.ai
Sexual harassment is not very uncommon practice particularly in those organizations which are male-dominated and lack a conducive environment for women employees. Such harassment may be at any level, from executive offices to assembly lines. Therefore, if a company wants to recruit woman employees, it must create a conducive climate in which the responsibility of top management and other managers is quite high.
Another kind of problem that woman employees have to face is in the form of prejudices against women. Though our Constitution provides that there will not be any discrimination on the basis of caste, creed, sex, or birth place, prejudices against women exist in the society as well as at workplaces. This is because of masculine or male-dominated society. A masculine society defines gender roles in more traditional and stereotypical ways. As against this, a feminine society has broader viewpoints on the great variety of roles that both males and females can play in the society as well as in workplace. Further, a masculine society values assertive behaviour and the acquisition of wealth whereas a feminine society emphasises relationships among people, caring for others, and a greater balance between family and work life. Avoiding prejudices against women depends on the culture that an organisation develops over the period of time. If the favourable organisational culture can be developed, the degree of prejudices against woman employees can be reduced to a very great extent.
Emphasis Knowledge Management
NEWER ORGANISATIONAL DESIGNS
Over the period of time, not only workforce profile has changed requiring more dynam organisation structure, but the job profile has also changed and is still in the process o change. For example, Verespej has observed that in twenty-five years or so, it is possible that very few people will have jobs as we have come to know them. In place of jobs, there will be part-time and temporary work situations. Organisations will be transformed from a structure built out of jobs into a field of work needing to be done. And these organisations will be essentially made up of hired guns-contingent employees (temporaries, part-timers, consultants, and contract workers) who join project teams created to complete a specific task. When that is finished, the team disbands. People will work on more than one team at a time, keeping irregular hours and may be never meeting their co-workers face-to-face. Computers, cellular phones, modems, and the likes will allow people to work for multiple employers at the same time in locations throughout the world.22
With the change in profiles of workforce and jobs, organisational designs based on classical approach of division of labour, departmentation, scalar-functional processes, and span of control are not suitable. These have to be moved from bureaucratic to adaptive structure, from mechanistic to organic structure, and from tall to flat structure. For example, Charles Savage, president and mentor, Knowledge Era Enterprises 23 has observed that organisations are focusing on the shift from steep hierarchy of the industrial era to flatter network organisations based on dynamic teaming and virtual enterprising in the knowledge era. Departments have become centres of excellence and the hierarchy is now perhaps three levels of best. Marketing department has been renamed as the listening team. engineering to product and service creation team, human resources to knowledge resources, information system to knowledge system, and so on. The training department no longer exists, but learning has not stopped but even more learning happens within and between teams. Finance is now called capital and knowledge assets because it has understood that the company’s real assets-knowledge, talent, experience, and vision-are four to twenty times the amount of investments in capital letters.
Three newer organisational designs that have emerged recently are team-based organisation, virtual organisation and boundaryless organisation. In a team-based organisation, teams are created to perform various tasks. When the task of a team is completed, it is adjourned and a new team is created either with the same members or with different members. Even the team leader is changed. This practice is followed by many Indian IT companies. For example, HCL Perot Systems, an information technology company based at NOIDA and the youngest company in the world to receive SEI CMM level 5 accredition, follows the practice of flexible structure devoid of hierarchical structure. Everyone from the level of vice presidents to management trainees is called as associates which generates the sense of belongingness. The company constitutes teams on project basis. While constituting the teams, people at a higher level in the previous teams may be placed below those at a lower level in the new team.24
A virtual organisation is a temporary network of independent companies-suppliers, customers, and even erstwhile competitors-linked by communication technology to share skills, costs, and access to one another’s markets. It has no central office, no hierarchy. and no organisation chart. People work from their respective offices and they do not meet their co-workers face-to-face. In managing a boundaryless organisation, patterns of a virtual organisation are followed though both differ in other aspects. In such a situation, managers have to cope with the implications of networked relations more and more, in place of the more comfortable hierarchical relations.
Approaches to Meet Environmental Challenges
In order to face various challenges that have been posed or that are likely to be posed by the dynamic environment, managers have to change their practices which they have used to adopt in pre-liberalised era. Table 4.2 shows the pre-liberalised and post-liberalised business situations and management practices.
In post-liberalised era, organisations should take some definite actions through which they can meet environmental challenges effectively. These are emphasis on core competence, reorganisation, and developing high-performing culture. Let us have a look at these actions.
Emphasis Knowledge Management
1 Emphasis on Core Competence. Post-liberalisation, many organisations have started focusing on their core competence and businesses are being organised around that. A core competence is unique strength of an organisation which may not be shared by others. This may be in the form of unique financial resources (finance available at a much lower cost), manpower resources, marketing capability, or technological capability. If the business is organised on the basis of core competence, it is likely to generate competitive advantage. Because of this reason, many organisations have restructured their business-divesting those businesses which do not match core competence such as Tata Group divesting many businesses and acquiring Tetley, a UK tea processing company, divestment of business by Voltas, Birla Group, etc. or acquiring those businesses which fit core competence such as Reliance acquiring four yarn/fibre manufacturing companies, Gujarat Ambuja acquiring cement companies, and so on. The organisation of business around core competence has changed the mind set and in this change, more emphasis has been given to human factor.
2. Reorganisation. Along with restructuring, there has been emphasis on reorganisation too. Many companies are restructuring their organisation structure by thinning their management levels and expanding span of control. Thus, there is emphasis on flat structure against tall structure as followed earlier. The old concept of “seven layers in the pyramid even direct subordinates under each boss”, which has been the historic hom many large companies in the past, is becoming extinct. Further departmentation based on functional lines is being changed to strategic business unit departmentation to focus more sharply on products or services. This reorganisation has created need for additional si on the part of the organisational human resources which can be met by appointing new managerial talents or by developing the existing human resources. The latter course on action is preferable because of the increasing competition for human talents.
3. Developing High-performing Culture. Every organisation develops its culture, known as organisational culture. This culture makes an organisation a distinct entity, that is. different from others. Organisational culture is a set of assumptions, beliefs, values, and norms that are shared by an organisation’s members. Organisational culture has enduring effect on the behaviour of the organisation’s members. Therefore, the organisation should develop sound organisational culture which induces its members for high performance. In an era where facing keen competition is a way of business life, a low-performing culture will not work. The organisation has to develop a high-performing culture in alignment with its members’ culture and the societal culture of which it is a part. Based on researches, Collins and Porras have provided following guidelines for developing high-performing culture:25
(a) Preserve core ideologies while allowing for change.
(b) Stimulate progress through challenging objectives, purposeful evolution, and continuous self-improvement.
(c) Encourage experimentation and accept mistakes.
(d) Accept paradox while rejecting either or thinking’.
(e) Create alignment by translating core values into goals, strategies, and practices.
(f) Grow new managers internally by promotion from within
