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Management of Knowledge or storing information to its full content and utilizing it for the benefit of the business has become a vital part of corporatetactics today. Modern organizations today give priority to effective knowledge management. It has become a controversial issue that change management and strategic practices are best applied only under well-organized corporate knowledge management. Moreover, it has been led to believe that effective knowledge management can undoubtedly assist in achieving corporate objectives and goals, whether it is to increase revenue, gain market dominance or for various promotional purposes.
"Through KM, organizations seek to acquire or create potentiallyuseful knowledge and to make it available to those who can use it at a time and place that is appropriate for them to achieve maximum effective usage in order to positively influence organizational performance."(King, 2009)
According to Mullins (as cited in Bonanno, 2003), "Knowledge management encompasses management strategies, methods, and technology for leveraging intellectual capital and know-how to achieve gains in human performance and competitiveness."
While the accelerating number of publications indicates the importance organizations are giving to KM, literature and media also remain abound with stories of situations where knowledge has been mismanaged when expanding its business.
For the purpose of this assignment, Dell Company has been chosen. This paper will explore KM implementation at Dell Inc. in the two different situations - Dell's success with PC's versus the repeated failures it faced in the mobile phone market also how knowledge is created and transferred within the organization.
Gaining marketable advantages has become a vital aspect of corporate objective. Professor Davenport states that as free natural resources and cheap labor are exhausted, the last untapped source of commercial advantage is the knowledge of people in organizations, thus the knowledge of their employees. (Davenport, 1996).
Therefore it can be stated that knowledge management promotes on creating and building knowledge repositories and a knowledge based environment within the organization itself. Dell believes in building a diverse workforce globally and isone of the few companies that govern the asset of knowledge at a wider scale to build a learning culture within the organization itself. Dell achieves this by thinking outside the box to go beyond its limitations to create an online community accessible through the internet which allows users to interact and contribute their ideas and opinions on Dell products.
Dell has already acknowledged more than 50,000of these ideas, and also rewarded them. Therefore Dell is one such company that administers the idea one champion is not enough.
Consequently, it would be safe to say that Dell has succeeded in building a knowledge based environment where knowledge is one of the vital assets to the well-being of the company. Though Dell is not a declared company, they have traits that fall under Knowledge management practices because they encourage in building a learning environment where they offer various benefits for their employees and also to any ideas contributed externally. This allows them to develop a self-declared culture where knowledge and learning goes hand in hand to ensure professional advancements and development for both the company and its employees.
Dell has gained a competitive advantage in the Personal computer market by delivering customized products to each customers liking. Their method of acquiring knowledge on their customer base is mostly online based, where their website itself acts as a platform for identifying and determining the customer needs and wants. And the belief of branching out their workforce has enabled them to understand and cater to the needs of various cultures more competently wvia observation and research.
Their unique selling point in the PC world would be their cheap prices and good quality in comparison to other global giants in the PC market.
Regardless, the same cannot be said to the mobile products they launched into the market in August 2010. Dell claimed that the mobile products had run its course after failing terribly in the US market. Regardless, the failure has not kept the multinational company at bay, and still thrives on succeeding even after the huge failure due to this huge mismanagement.
Nonetheless, Dell has advanced into the world with the brand slogan, "The power to do more".Also, they have built the image as a company that listens, learn and deliver to build a customer centric-approach to empower communities of various backgrounds to achieve the technological solutions that best suits them.(Dell).
Concept of knowledge and learning in organization
Dell is one of the companies renowned all over the world for its direct information collection method from its web based clientele network. They constantly supervise and collect information on customer requirements and are constantly adapting to the changes in market demand.
Dell is one company that understands that if they fail to gather enough information on their market, they would fail. And Dell has experienced this the hard way when they had a huge downfall trying to penetrate the mobile market.
Types of Knowledge and knowledge transfer in Dell
In 2007, twenty three years after it began operations the first news of Dell's plans to venture into Mobile market surfaced (Lester, 2007) and by 2009 Dell Streak, a smart phone/tablet hybrid and then Aero, its first mobile/android phone were launched. KM was not a new phenomenon to Dell by 2007.
In fact KM initiated at Dell has been documented in literature from as early as 1999. Two research works - one in 1999 by Dr.Pearlson and Dr.Yeh of the University of Austin and another by Gajic and Ribbon in 2010, were particularly useful in understanding what knowledge management was like in years when Dell PC's became a remarkable success and what it was like a decade later when Dell mobiles disastrously failed.
Dr.Pearlson and Dr.Yeh wrote in 1999, that a major contribution to Dell's success continued to be from the way the company managed information and knowledge. They elaborated on the fact that Dell had a great capacity to continuously learn, create knowledge and convert it into customer value, making Dell an organization where people were the key asset and managing knowledge a corporate imperative (Yen, 1999).
With the help of available literature, we will explore the knowledge management strategies, methods, and technology used at Dell for leveraging intellectual capital and know-how to achieve gains in human performance and competitiveness.
Knowledge transfer in the internal and external corporate world can raise various ethical issues. Various matters should be taken into consideration especially when there is a knowledge transfer between corporations, customers and within the organization itself.
This is because the market advancement, demand and mandate will differ from market to market and individual to individual. Knowledge transfer modes must be taken into deliberation when introducing a new product into the market or when penetrating a completely new market.
Dell has successfully retained corporate knowledge via the company website maintaining an efficient and effective transfer mode of corporate understanding. Furthermore, Dell believes in diversifying their workforce by hiring individuals who belong to different cultures, countries and ethnicities. The primary purpose of building a diversified workforce is to build close customer relationships with a varying global audience.
Nonaka (1994) argued that, "knowledge can be created and shared, improved and justified via collaborative, social processes and individual's cognitive processes such as reflections"
According to his theories, tacit knowledge can take place through socialization. The SECI model is applicable to Dell at various levels of knowledge transfer and acquisition. Dell developed an online interface where users can interact and exchange knowledge in real time. Creating a social media throughout the organization has ensured Dell to be fully aware of its internal and external customer needs. Dell thrives in acquiring knowledge via countless means. They have succeeded in generating new knowledge constantly from both inside and outside the firm, building a platform where effective communication can take place.
The main set of tools used for knowledge management at Dell includes face-to-face meetings, teleconference meetings, live meetings, sessions, shadowing, mentoring, templates, share point, ad hoc phone calls, e-mails, Corporate Messenger and intranet. The choice of tools is influenced by organizational factors such as culture, managerial strategies, size of company, geographical dispersion and IT infrastructure. The tools utilised are also related to type of knowledge conveyed (explicit or tacit) and whether personalization or codification is the better knowledge transfer mechanism.
Therefore it can be concluded that Dell is in-fact a good example of a learning organization, as they inspires their people to be proactive, creative and challenging when it comes to beholding the title of a learning organization.
Furthermore, through internalization, Dell encourages users to contribute their ideas and opinions which create a knowledge transfer medium where explicit knowledge is changed to tacit knowledge. Dell Company has developed various such proposed perspectives and concepts into tangible designs throughout its history.
The company's intranet is a basic source of highly codified and explicit knowledge. Share-point is another tool which is used when knowledge is transformed from tacit into explicit knowledge. Share-point is a web-based storage template that is used especially for activities directly related to project management methodology;italso acts as a memory within a department which facilitates learning from past experiences. Informal written information is created and shared through electronic messages and corporate messenger, in this case, the Microsoft Communicator.
These tools allow the communication of both explicit and tacit knowledge. Although knowledge must be codified in written form to be transmitted through these means, they also accept some level of personalization as they allow a more spontaneous conversation, enabling a smooth flow of information back and forth (Robbon, 2010).
In addition, Dell inspires its employees to contribute and participate actively in developing its product designs and concepts. The ordinary day-to-day tasks are converted into challenging leaning opportunities which can also help them to advance in their career. No matter to which level of the organizational hierarchy the employeebelongs to, Dell motivates its employees to partake and challenge their own ideas and skills, thus continuously facilitating a learning environment to improve the organizations framework efficiently.This notion can be stated as externalization where tacit knowledge is converted to explicit knowledge, thus enabling employees to communicate their standpoints effectively within the organization itself.
Moreover, Dell uses various personalization strategies such as web based tele-conferencing for explaining or teaching complex topics such as reports or applications. Mentoring and Shadowing are resources that this team uses in order to transfer tacit knowledge. Sessions, face-to-face meetings and ad-hoc phone calls are also a widely used practice in Dell to transfer tacit knowledge between team members as well as with other departments (Robbon, 2010). The main four enablers that act as a base for effective knowledge management at Dell are people, organisational structure, organisational culture, Information technology and Change Management.
Regardless of their research and wide database of knowledge, unlike the PC products, Dell mobiles failed in the market. Dell took a triple loop decision when they decided to penetrate the mobile market as they targeted a completely different sector and customer base. And the question remains if they had effectively operated change management and market penetration when they launched their mobile products.
Learning Characteristicsand Dell
Maintaining a huge database of corporate knowledge is not an easy task. This information can be easily mismanaged and neglected if not handled effectively. Sorting and managing the existing knowledge within the organization should be the first priority.
Dell incorporates learning traits such as leadership, employee advancement, and creativity to empower their employees to develop their skills and career. Improvement of employee performance will inevitably improve the overall performance of the company. And Dell constantly finds ways to enhance learning within the environment through various trainings and employee development programs.
Dell has eliminated the limitations arising from geographical barriers by diversifying their workforce. Furthermore; they encourage a teamwork environment when it comes to achieving organizational goals and objectives. This enables them to develop a multiple learning atmospherewhich is designed to cater to the needs of different individualsencouraging them to act independently and to foster to the needs of the corporate goals in return.
Dell Computers is a matrix organization, with project teams assigned for particular tasks. Its flat organizational structure complemented by the open-doors culture results in a positive feeling employees who feel free to approach people from all hierarchical levels of the company to seek knowledge (Ribbon et al., 2010).
Regardless, the question remains if Dell was and is able to convert this knowledge into effective and profitable actions.
"Learning companies create knowledge by reviewing their successes andfailures, subjecting them to systematic assessment and transferring and recording what is learned in a way that will be ofmaximum benefit to the organization" (Marquardt, 2002, p. 151).
Strategic importance of Knowledge Management
External and internal factors of an organization can enhance the creativity and individual thinking to stimulate organizational performance. In this competitive era of corporate world, it is important to contemplate the strategic importance of knowledge management in order to gain competitive advantages over the competitors.
Dell identified the importance and potential of the internet to grow and expand when they launched their website. Initially, at the time, the internet did not have many users; however, the world has become a global village that has allowed Dell to branch out to form a multinational corporate network throughout the world.
The Dell website has allowed users to interact and leave feedback and also browse through the products of their liking without any traffic, enabling them to provide the users with a huge amount of content within a small timeframe in comparison to the traditional method of shopping.
Strategically, a web based online system works to Dell's advantage in terms of acquiring knowledge, as various means of getting feedback are put forth to retrieve information on customer requirements.
Moreover, the learning culture developed by the company itself acts as a platform to enable both the internal and external users to understand, develop and create innovation for Dell.
On the other hand, despite the fact that the world isinterconnected, there are still under developed third world countries that do not have access to the internet or to the same technology, and thus remains an untouched market to Dell.
Regardless, the world is developing so fast that the internet and technology has become a vital aspect of everyday life, especially in the corporate world. Therefore Dell has the benefit of expanding to form a wider network of business to conduct business to business and business to consumer transactions at a universal level.
The ultimate outcome of KM is the improvement of organizational performance. Predicted improvements and developments are the principal basis that organizations use to judge the value of Knowledge management initiatives. However, many KM efforts are neglected because companies often fail to assess and forecast the possible impact on the organizations goal to improve revenue and productivity in the long run.
Dell has always been a successful company in the PC market. They did their research and marketing well when they penetrated the PC market in 1984. Therefore initially, the knowledge acquired was managed well as they met their customer demands and worked well in delivering to customized consumer needs.
However, the same cannot be said about Dell when they penetrated the mobile market. They did not allocate enough resources and research when penetrating a completely different sector; the mobile segment. Unlike the global leaders like Apple and Samsung, Dell was new to this market. And thus they did not utilize and asses enough knowledge when they dashed in head on against these competitors. As a result their mobile products failed.
The company's brand image were suddenly pulled down,internet news headings such as "Dell only speaks PC" and "Doomsday for Dell, "Will continued failure outside of PC's spell its demise" (Van Camp, 2012) came forward. Dell's failed attempts to enter mobile phone market with products such as "Dell Aero" and "Streak Tablet" also raised several questions about KM execution at Dell Inc. at the time.
Dell had already built a high brand image in the PC market, thus the expectation of customers were comparatively high towards Dell mobile. These mobile products were described as having bad reception and no uniqueness when it came to any other mobile product. It can be evaluated that Dell did not do their "homework" on the mobile sector when they launched their products. They did not assess the fierceness of the competition and no productive market research was done to successfully penetrate the market. Thus when they took this triple loop decision without much regard for the market demand, their products failed terribly, especially in the US.
There was also a time when Dell PC was in the danger being pulled down. In 1993 and 2006, they had to recall 4.4 million laptop adapters for fear that they could over heat and cause fire. A huge customer portion would have been lost, however, pulling back of these products worked in their favor and their brand image remained intact.
Regardless, they did lose a huge market share of PC to HP in 2006 when they launched their HP laptops. Dell was not prepared for the competition and thus once again had failed to assess the competition.
In the PC market however, Dell did manage to maintain the knowledge they acquired and became one of the renowned PC suppliers in the world. Therefore, knowledge management on PC market has been maintained and assessed well in the last years. This is because they managed change management and also understood the importance of strategies when taking decisions and improving organizational performance unlike the mobile products. Regardless, the PC growth for Dell has been comparatively low.
This is because Dell did not administer innovation unlike the other PC market dominators. Since 1999, Dell PC revenues had been good, but many of the competitors have surpassed Dell and had become from good to great, becoming the market leaders within a short period of time.
Dell has spent only 1% on research and development while other competitors such as Apple are spending more than 3% on research and development. Thus all in all, it can be argued that Dell had not enough to reap the required knowledge to compete when it came to innovation and also when penetrating the mobile market.
"Dell is moving the needle on R&D, but it will take time to garner returns and change the perception that the company doesn't innovate. Dell's R&D spending-more in nine months of fiscal 2012 than entire years before-is a good start, but it's just a beginning"(Dignan, 2011)
The primary reason for Dells inability to dominate the PC market is easily their lack for adaptation and innovation. In this vital and fierce market today, to get the upper hand, Dell needs to manage change and adapt to various changes that develop from technological advancements and innovations constantly.
From Dells solid niche market PC provider, Dell has been struggling to deliver its customers with a wider range of PC products over the years. Even though Dell is doing well in the PC market, the market is still dominated by companies like Apple, Oracle, IBM and Hewlett-Packard.
"Dell won't be destroyed, but it needs to take more aggressive steps or remain a small player that doesn't grow that much," says Shaw Wu, an analyst at Sterne Agee.