An organisation’s interest towards the knowledge management process resides from the realization that the organisation competes based on knowledge based assets (Omotayo, 2015). Not only multi-national corporations, but non-profit organisations too, succeed or fail based upon the organisation’s ability to leverage their internal institutional and individual knowledge (Omotayo, 2015). Knowledge management refers to the acquisition, creation, protection, transfer, utilizing and leveraging of knowledge within an organisation (King, 2009).
The ultimate goal of knowledge management is leveraging and improving the organisation’s knowledge base in order to improve knowledge practices within the organisation (King, 2009). Secondary goals are to improve the organisation’s behaviours and to enable the organisation to make more effective decisions and improve the organisations performance (King, 2009). Intellectual capital is a knowledge asset of an organisation that is converted into value for the organisation (Wang & Liang, 2014).
Intellectual capital is stored in databases, processes, systems and relationships of an organisation (Wang & Liang, 2014). If an organisation creates knowledge then the organisation has knowledge activities in place to transfer, protect and leverage the created knowledge (Cao & Xiang, 2012). Knowledge creation is an opportunity for organisations to create a competitive advantage especially when these organisations operate in today’s globally competitive marketplace (Nonka & Byosiere, 2013).
Various organisations such as Coca-Cola, continuously improve their knowledge creation abilities through various strategies such as the development of new products, collaboration and in this way overcome entry barriers in new markets (Nonka & Byosiere, 2013). Knowledge leveraging could be regarded as a bridge between an organisation’s knowledge and individual knowledge that in essence improves absorptive capacity and innovation which creates a sustainable competitive advantage for the organisation (Cao & Xiang, 2012).
The transfer of knowledge is a strategy organisations use in order to enhance the their access to knowledge (Tuan, 2012). Knowledge protection is critically important and will reduce the risk of knowledge spillovers. In order for organisations to prevent knowledge spillovers initial secrecy is essential, as spillovers may result in barriers for the knowledge transfer the organisation was initially going to partake in (De Faria & Sofka, 2010). In any organisation, the knowledge of the organisation is integrated in their documents, processes, people and practices.
Due to this, organisations should not neglect the importance of the human capacity within the organisation as people are the creators of knowledge (Iazzolino & Louise, 2016). Therefore expenditure of the human resources within an organisation should be regarded as an investment and asset and not a cost (Iazzolino & Louise, 2016). The report focuses on Coca-Cola, being the worlds largest beverage company (Yadav, 2015). Coca-Cola’s vision is to be highly efficient in their productivity having a fast learning and rapid growing organisation (Yadav, 2015).
Introduction Effective knowledge management is a critically important ingredient for any organisation, national or international, to gain a sustainable competitive advantage (Omotayo, 2015). The manner in which an organisation creates, transfers, protects and exploits knowledge is directly linked to the organisation’s ability to develop and grow successfully (Yang, 2017). Organisational knowledge refers to the organisation’s experiences, processes and designs, documentation and visions for the future (Yang, 2017).
There are two types of knowledge namely tacit and explicit knowledge; explicit knowledge is codified knowledge that is expressed in formal language and tacit knowledge is intuitive, unspoken knowledge that is acquired through various experiences, observations and imitations (Tuan, 2012). The following report analyses the knowledge management system of Coca-Cola and how Coca-Cola creates, transfers, leverages, protects and derive opportunities from knowledge in the international market that the Coca-Cola Company operates.
The relationship between knowledge and trust as well as knowledge and innovation, efficiency and performance is highlighted. The relationship between knowledge and internationalization is emphasised as knowledge is the key ingredient for any organisation to successfully internationalise. Knowledge Management Knowledge management is the process within an organisation to control, motivate, plan and organise the people, processes and various systems that the organisation utilizes (King, 2009).
This knowledge management process ensures that the knowledge assets of the organisation are continuously improved and employed effectively (King, 2009). Knowledge management improves and has the ability to strengthen the knowledge resources an organisation possesses (Hsu & Sabherwal, 2012). The importance of Knowledge management relates to the rapid increase in global competition, developing value for the consumer, employee turnover resulting in a vast loss in knowledge and globalization (Rahimli, 2012).
The main aim of knowledge management is to assist in increasing an organisation’s profits by improving the organisation’s efficiency of operations, increasing its quality and quantity of new innovations and through enhancing the organisation’s competitive advantage (Rahimli, 2012). Knowledge management has four key components namely People, Knowledge, Processes and Technology (Omotayo, 2015). The main goal of knowledge management is to connect these four components with the aim of leveraging knowledge (Omotayo, 2015).
Knowledge: Knowledge is information that has been processed by individuals such as ideas and expertise that are relevant for organizational performance (Omotayo, 2015). People: People are the main sources of knowledge (Omotayo, 2015). People create and acquire knowledge, experiment with knowledge, learn from knowledge and teach other individuals in order for the organisation to be innovative and create new knowledge (King, 2009). Processes: Processes are structured mechanical and logical systems that direct and guide the organisation (Omotayo, 2015). Technology: Technology is an important element of knowledge management.
For example, Information Communication Technology (ICT) may assist with the collaboration between people and organisations that are very geographically spread through codification of knowledge (Omotayo, 2015). The need for knowledge management within the Coca-Cola beverage company is essential as the only way their employees are able to reach their performance targets is through improved technology delivering appropriate knowledge management systems (Kempe, 2012). Coca-Cola relies heavily on their knowledge management systems in order to experience increased profits and production levels (Yadav, 2015).
Knowledge management within the Coca-Cola Company enables employees and managers to gain a better understanding to managing their employees and resources (O’Leary, 2010). Knowledge management within Coca-Cola is not merely based upon getting the employees to understand what they are doing for the company, but rather providing these employees with the appropriate technology which will in essence enhance their skills and assists in the employees becoming an asset to the company and not a liability (Kempe, 2012).
Coca-Cola has developed various processes and structures to assist in the companies’ performance through the management of knowledge: Decentralisation: An environment is created where the managers are given the responsibility and are results driven (Yadav, 2015). At the base of this structure, it is said that the people closest to the problem are the one’s who are closest to the solution (Yadav, 2015). Policy of appointing local management: This assists the company to adapt to local conditions in a relatively comfortable and easy manner (Yadav, 2015).
Knowledge management has assisted the Coca-Coal company utilize their resources and efforts in order to resolve future unexpected reverses (O’Leary, 2010). Their knowledge management strategies have been highly effective as the world had gone through recession but the Coca-Cola Company stood still and continues to push towards perfection and success (Kempe, 2012). Knowledge creation/acquisition Knowledge creation refers to the process whereby individuals of an organisation add specialized knowledge of their own to the organisation’s existing knowledge that is available to the organisation as a whole to utilize (Beck, Rai & Keil, 2015).
In order for an organisation to create knowledge, the organisation should have knowledge creation capabilities, which is an unique competence the organisation has which assists in the organisation’s drive towards competitive advantage and greater profits (Wang, Su & Yang, 2011). Organisations should place emphasis on knowledge creation, as it is key to the survival and sustainability of any organisation (Omotayo, 2015).
Knowledge creation and acquisition is important predominantly due to the vast number of changes within the global environment including globalization of competition, the rate at which knowledge ages and product and service dynamic innovation (Omotayo, 2015). The SEIC (Socialisation, Externalisation, Internalization and Combination) model is used to create and acquire new knowledge, through the transformation of tacit knowledge to explicit knowledge within the organisation and this new knowledge is then internalized by all organisation members (Mihi, Victor & Garcia, 2012).
Socialisation is the process shared experiences and creation of new knowledge in the form of a group (Mihi, Victor & Garcia, 2012). This new knowledge created is shared through joint activities within the organisation such as group meetings and discussion forums (Nonka & Konno, 2010). Externalisation refers to the process where tacit knowledge is formalized into explicit knowledge (8). Within externalization an organisation’s individual members have various ideas and intentions, which then become integrated (Nonka & Konno, 2010).
Combination is the process of synthesizing explicit concepts that become a knowledge base for the organisation (Mihi, Victor & Garcia, 2012). Combination involves capturing and integrating new knowledge, collection of knowledge that has been externalized, editing and processing of explicit knowledge in order for this knowledge to be more valuable to the organisation (Nonka & Konno, 2010).
Internalisation is the process of absorbing explicit knowledge into tacit knowledge, which relates to the concept of learning by practice (Mihi, Victor & Garcia, 2012). With reference to the Coca-Cola Company, the strength of this mutli-national company is within their knowledge which has been created within each department of the company over time and is shared amongst each other within the company (Yadav, 2015).
The main tool Coca-Cola uses to acquire and create new knowledge is the Intranet, appraisal meeting and business reviews and their informal networks (Kempe, 2012). Every framework within the company began as a thought within the minds of their employees (Yadav, 2015). Therefore it can be said that Coca-Cola flourished into a multi-national company due to the tacit knowledge of their employees (O’Leary, 2010).