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In the background of twenty first century, the firms are competing with each other in this challenging and complex environment. It is transformed by numerous factors such as diffusion of technologies, technological development, and information technology along with the use of right knowledge (Hitt, Keats, & DeMarie, 1998). This landscape requires every firm to act differently to flourish and survive. For that they have look for new resources of the competitive advantage and some new forms of competition. This it requires the proper understanding of information, knowledge and the proper communication process for gaining competitive advantage. Information is required and it acts as the back bone of the today's business and vital part of large business firms. The massive storage of data needs the purposes from the decision making processes to risk management process.
Ernst & Young have adopted the combination of information, knowledge and communication ties strategic themes on the basis of globalization such as operational excellence, clients, financial stability and people. This firm confines and takes action on the knowledge within their organization. Information, knowledge and communication process describes their strategies to ensure that they are acting upon to gaining competitive advantage. This large firm uses ERP for their work so that they have achieved higher operational excellence in their work. They use internet and intranet within their organization and its all offices are interconnected with each other. For carrying out the communication process, they held regular meetings for transferring information form one department to other departments. Thus makes it easy for them to gain competitive advantage by adding strategies to their business growth.
The large scale business is globally distributed and having reliable as well as stable infrastructure along with the network administration. Its applications handle and run the fast processing. The information technology has enabled the business firm to offer services well. The business communication process has become very vital for managing business growth as well its success. The Ernst & Young Company has achieved efficiency with network-based communications such as email and web presence. These tools have supported the customer support that has grown the companies to compete in the larger markets.
Some communication applications have made it easier for the firm to communicate and collaborate efficiently with their clients and customers. Thus there is a strong need of the combination of information, knowledge and communication process in the organization. The firm has gained competitive advantage by establishing and providing professional services. This company has provided a broad collection of services for capturing growth and managing risk just by adopting proper communication process.
The information, knowledge and communication plays an important role for gaining competitive advantage and it is a better meaning of providing competitive advantage. They all are required in the tangible form to meet the needs of the company. The companies fail due to its inability for managing these points to meet internal as well as external requirements (Hodgson, 1999). As it s discussed in the previous section, E&Y has adopted information system for communicating with their clients and customers. The company has achieved efficiency with network-based communications. These tools have supported the customer support that has grown the companies to compete in the larger markets. Thus it helps them to grow in the global market. The company has gained the competitive advantage by achieving excellence at the firm's level.
What managers are doing to improve decision making by using information and knowledge internally and externally to improve decision making and taking?
Generally managers make decision on the basis of their perception, understanding, events and people around them. They can experience some instances where their perception is taken as mistakes. The perception along with the right information and knowledge plays an important role in decision making. But it has suggested that managers may get into some problems that result from wrong perceptions, and are considered as rare and they are often negligible. For any decision to be effective, it should make use of relevant, timely and accurate use of information (Ajayi et al., 2007).
Managers work on knowledge based activities while decision making. Broadly these activities are divided into two categories such as process and practice oriented practices. The managers use process oriented approach by getting the tactic knowledge. This knowledge can be taken from formal interviews and meetings. The requirements of knowledge and information are known as an outline of the decisions that are to be proved as effective in decision making. The importance of information has not only been at present, but had played quite an important role even in earlier days as Mudrick & Rose (1971) suggested that for an organization to survive, information plays supreme role. Managers gather the knowledge and information from some internal and external sources. On the basis of the available data, they implement it for the decision making.
The managers in Ernst & Young firm play an important role in decision making and they are having good decision making capabilities. The managers take decision on the basis of collected information and gathered knowledge from internal and external sources. They conduct meeting with their peers, their juniors and with their other executives for better decision making process. By doing this, they can get the information at internal level. Also they collect information from the external sources. They communicate with their clients and customers for getting feedback and for knowing about the needs.
In addition to these, the time in today's scenario makes use of various ERPs for information handling. Big giants like Ernst & Young make use of these information handling techniques for better decision making process. Even the organizations today make use of software tools such as SAP, which has its own intelligence techniques to recommend for better performance and growth of an organization. Managers use these tools for their decision making and various strategic decisions too. Therefore, the time has changed and the approach of managing situations too has changed. Thus, MIS has been in use increasingly at present times. The technique helps in finding the disturbances that are there within the system to help the management take a step for getting against the problem (Obi, 2003).
The first step of any decision making process involves the process to define the problem. Managers need to define the problem that exists within their organization. For this purpose, they arrange meetings with their colleagues to know about the exact situation. Based on the analysis made from the meetings, strategic level of management finds out the exact problem statement within an organization. This problem is then taken as the main factor to collect the information related to it there within the organization (and that existing outside the organization as well). From the information collected, various conclusions are drawn that help in exploration of ways to sort out the situation. The management then makes use of the information along with the problem statement to process the information. This processed information is further made use of to come to the final conclusion by making decisions.
What are the strategies to increase personal networking to widen Employees' Involvement in the decision-making process?
Involvement of employee in decision making process creates the basic need of today's marketplace. Managers make an effort to increase the involvement of employees in the organization. Therefore, the well integrated organization results in better outcomes. There are a number of ways by which an organization makes an effort to increase the employee involvement in decision making process using the personal networking approach. The increased rights given to employee to raise his voice and involve in decision making process helps him attain outcomes (Macleod & Bradey, 2004).
The strategic management department makes an effort to arrange regular get together there within the organization to raise the number of communication of employees. This raises the strength of relationship of members with each other. This also helps them feel comfortable in working with each other. The employees make an effort to communicate with each other at such instances and get rid of any personal distances. This helps in creation of better relations of employees, which raises the opportunity of better performance. The employees work with each other in a better manner using the personal network (Robinson et al., 2004). Therefore, the importance of personal network cannot be ignored. The personal networking helps in establishing better relations there within the organization. The employee feels comfortable working with the organization, thus acts in favour of the organization. Increased power provided to the employee is the root cause of this change in behaviour.
The management shall increasingly favour creative and innovative ideas in the meetings and give the employees an opportunity to represent these ideas in meetings. This would help in better opportunities among employees to participate in organizational activities. Therefore, the decision making opportunities are increased. This would further result in motivation among individuals due to increased importance provided to them. Therefore, the operational activities are improved of individuals. The management enjoys benefits due to this act, as the innovation and creativity gives an opportunity of accomplishment and new insights among individuals.
The very common cause of employee leaving an organization to join the other is due to lack of importance provided to the employee. Other factors besides this include promotion and rewards (CIPD, 2007). If an organization gives the individuals an opportunity to participate in decision making process, this helps them motivate to work for the organization. Therefore, the management shall incorporate such a kind of strategy at work place that there are improved personal relations of employees there within the organization, and therefore, results in improved performance for the success and growth.
Employees shall give the employees an opportunity to discuss directly with the top management in case of any problem. The problems shall be duly heard by the managers. This would further help in improved personal relations of employees. This would act in favour of individuals as well as organization. The staff would be increasingly active to participate in decision making process. This would act as a strong motivating factor for individuals.
In addition to this, the employees shall be given an opportunity to discuss their experience with others. There should not be stiff restrictions at place for the management process. This would ensure better flow of information transfer and communication process. Therefore, would help in betterment of the organizational objectives. One should remember that the retention of top performers is of supreme importance for an organization. Therefore, personal networking should retain the employees for long term success.
Develop a communication process to improve the decision making and organizational knowledge for your chosen organization.
Decision is considered as the form of a communication which takes social prospects of the people in the organizations (Andersen, 2003). There are three groups of the communication process: temporal prospects to the future, accurate prospects at the organization and social prospects that are directed at the participants in the communication process. Communication process plays supreme role for the success of an organization. There should be thorough communication between the two or more entities to ensure the proper flow of information. For Ernest and Young, it is suggested that managers shall arrange regular meetings with their team to motivate them.
The targets shall be clearly stated by the managers (As they are at present), along with the motivational meetings. At present there is a hierarchical process for communication between different staff members. However, it is recommended to make use of the shorter channel. There should be a separate software application at work place to communicate. The staff members shall make use of this application to communicate with each other. This should be more or less like Skype. Therefore, the staff would be able to communicate with each other in a faster manner. This communication shall not restrict to particular group of people, but the integration should be of such an extent that an operator can even communicate with the strategic level of management. Thus, the hierarchical structure would be able to communicate with each other without the limitation of any particular group of people. This would be of help in ensuring that there is faster communication within the organization and the proper strategic decisions are made. The operational level of staff would be able to communicate with the strategic level, thus helping them getting rid of problem conditions, if any. This would ensure the right use of technology and healthy work flow of the staff operations.
Decision is an organizational process and can be created when the decisions are interconnected with each other and that can cause the uncertainty in decision making. It is considered that first decision in the process is no longer evaluated further (Seidl and Becker, 2006). The organization would be able to make better decisions thereon. The management would be able to communicate with each other through a direct channel. Therefore, the chances of miscommunication would reduce greatly. This would help in reduction of problem conditions.
The flow of information would take place smoothly through this approach within the organization. This would further result in reduced risks of wrong information transfer. The back- up of whole information transfer, whether audio or textual or video, would be recorded to the main server. Therefore, the details are completely saved to the main database. This would help in reviewing all the discussions done, as and when required. Furthermore, the access of previous discussion would also help in analysing the flaw areas that exist within the complete network of Ernst and Young. The business is expected to grow through this strategy. Increased pace of communication and decision making process would help in attaining better results.
The decision makers would thus be able to utilize the previous communication details to know about the approach that had helped them gain in the past. Based on this analysis, they can formulate future strategies for growth. This would help them to minimize the risks and make optimal solution of resources. Thus, the strategy is expected to help them in gaining better results. The organization's revenues are also expected to increase through this strategy.
What role Knowledge Management plays in managing organisation strategically?
Knowledge enables the companies to compete with each other. Knowledge about the customers, competitors, their strategies is very required. Firms have adopted knowledge management in their organization as the strategic orientation. For an example, low cost strategies are required for cost cutting in the organizations. Lowering prices and shortening of cycle times are some differentiation strategies that add value to the organizations. Thus it differentiates firms from their competition. Organizational knowledge theory tells how the knowledge plays an important role for managing organizations strategically.
Organizational knowledge is known as the implicit and explicit knowledge that every individual try to acquire about the products, process and systems. The tactic knowledge can be gained by using the forms of cultures, routines etc and explicit knowledge is gained by some databases and manuals (Nahapiet & Ghoshal, 1998; Grant, 1996; Nonaka & Takeuchi, 1995). Knowledge management is very critical to achieve competitive advantage. External as well as internal sources are considered as important factors of the firms (Kogut & Zander, 1992).
Ernst & young is an independent firm and it is renowned as most admired knowledge enterprises (MAKE). This organization is well known for its corporate knowledge driven firm and it works more on becoming strategically important. This firm creates and leverages the easy access to their knowledge to their clients as well as their practitioners and that has differentiated itself from other companies in the market. The main strategy of the company is that it emphasizes on both learning as well as sharing of knowledge. It connects the skill and ability of their people with the firm to be better that their competitors. E&Y have adopted client oriented approach or strategy that has been transmitted form the company to the teams for its applications.
An applied knowledge management protocol has been implemented for making use of information in decision making, work and information alignment for optimizing performance levels, facilitating problem solving and distribution of knowledge for strategic purpose (CAPa, 1997). This application is effectively assisting the high and value added activities with the strategic context. It also broadcasts its business practices to meet differences.
Generally there are two types of organizations that rely on codifying knowledge strategy to make total use of knowledge for individual stores it for easy access by using information and communication technology tools. There are the companies that rely on the personalization strategy for channeling of individual expertise to the right place for person to person interaction.
Ernst & Young is making explicit knowledge and inserting it in the store areas. It also promotes people network along with the technology based networks. It has also worked for knowledge management strategy but with the interpersonal relationship with their clients. This has emerged as a core concept for the firm. They create better balance between the internal as well as external part with the view of the globalised world (Ezingeard et al., 2002; Bartlett, 2000; Collins, 2002, 1998). As the E&Y is knowledge based firms, it can be understood by the following figure:
Figure: Knowledge Management founded on Technology-based networks vs. Personal networks
Source: Electronic Journal of Knowledge Management (2008)
The figure states the two dimensions in which one axis shows the degree for developing knowledge management on the technological frameworks from low degree to high. The other axis represents the personal networks on which the organization develops its knowledge sharing capabilities at personal level. The high degree shows the strong integration with the knowledge networks. It is high in the case of the E&Y firm.
It has become a fact that new venture are growing rapidly, thus they have adopted the knowledge management in their organization to become strategically strong. It has been argued that knowledge management is not different issue. Xxxx company have some unique feature of the knowledge management how they are managing the knowledge strategically. This firm has emphasized different knowledge management activities. The adoption of organizational knowledge theory has become very important phenomenon for this firm.