Knowledge Management For Organizational Structure – Case Study Of Unilever

Organizational Structure

Discuss about the Knowledge Management for Organizational Structure.

Knowledge management is an important tool that helps in managing the knowledge at the different hierarchy level in the organization. Several models are there that are helpful in analysing the knowledge management practices of an organization. The purpose of this assignment is to recommend a knowledge management strategy through which the Company can actually minimise its knowledge management related gaps. By observing the alteration of acquisition process of Unilever and the reduction of stores in present time, it can well be calculated that the organizational objective of Unilever is concentrated to its core areas such as food products, household and delicate products (Becerra-Fernandez and Sabherwal 2014).

Unilever has created a four-tier hierarchy for responding to the rising urgency with effectiveness. This is designed in this way for managing the complexity of business operations that is spread to a larger area in the world. In the hierarchy, all the levels of participants are interrelated to each other in order to have an improved intercommunication. Paul Polman who is the Chief Executive Officer and Jean-Marc Huet who is the Chief Financial Officer represent the head figure of the Company.

Despite of the fact that Unilever is highly reputed Company in the World, which comes only after the Nestle and the P&G. The allocation of too many resources to address the global cultural differences is a serious problem for Unilever, which is leading to its poor performance (Fuller 2012). In order to be localised by offering different products, it often tends to duplicate the procedures, which is another serious issue. Moreover, it is causing a poor performance of the Company. For example, producing two kinds of soaps in the Indian market such as Lux and Dove represent one of the duplication processes of the Company. Duplication of the existing process to produce something new and advertise this differently is a strong gap in their knowledge management (HBS Working Knowledge, 2017).

High pricing for some of the products is a serious flaw, which encourages the existing customers to move to those brands that are offering the same product in lesser pricing. The reason behind the high pricing of the product is the absence of the Company on the online platforms (Groff and Jones 2012). Moreover, the Company also does not have any retail shops, which makes them relying solely on the distributors. This one factor drives the high prising of the products. Another strategic problem for the Company is their lack of market research, which is also affecting their annual sales figure. Customer Relationship Management is another constraint to the Company in their way to constant success. It does not have any qualified team that could minimise the losses of reliance on the distributors only (HBS Working Knowledge, 2017).

Knowledge Management Gap

Several of models are there for making the knowledge management strategy; however, Knowledge Category Model proposed by McAdam and McCreedy is one of the most effective in preparing a KM model for the organization (Shannak et al. 2012). It divides the knowledge into various types and governs the proceedings of operations by having exchange in between those types. It transforms the knowledge into discrete elements and then proceeds to work by cooperating with one another. The best example to understand the model is the SECI model, which governs the conversion of knowledge. In SECI model, Knowledge transference is encouraged. This model helps in converting the explicit form of knowledge into the tacit with the help of internalization. On a same note, it helps in converting the tacit form of knowledge into the explicit form with the help of externalization (Grundstein 2012).

The phenomena included in this model are helpful because of the fact that tacit form of knowledge is the most difficult form of knowledge that cannot be incepted into the organization through any external process (Rao 2012). Explicit are that form of knowledge, which is easy to generate within the organization by means of training & development program. It can also be transferred with technology as it supplies much important information on the subject topic. However, tacit form of knowledge is tough to deliver, as this is not transferrable. This is where it forms knowledge related gaps in the organization. Some of the knowledge is extremely important from the organizational perspectives but it solely depends on the realization towards the importance of that knowledge. However, the lack of realization causes the organization to suffer. This is exactly the case with the Unilever, which is suffering of a proper knowledge management in the organization (Hislop 2013).

Development and implementation of the strategy in the Unilever Company can be done in four steps such as follows:

• Socialization (tacit to tacit) – This can be achieved within the organization by having sharing experiences within the organization (Holsapple 2013).
• Tacit to explicit (Externalization) – This is achieved within the organization by the conversion of tacit knowledge to the explicit form with the help of model thereby, encouraging the socialization of the changed form of knowledge (Koenig 2012).
• Combination (explicit to explicit) – This is such a process that guides to a collecting method of all kinds of information such as internal and external. It also helps in converting the more complex form of the explicit knowledge into an easier form to make it understandable for the employees (Liebowitz 2012).
• Explicit to tacit (Internalization) – This is such a stage, which helps in converting the explicit form of knowledge into the tacit form to foster the applicability of the derived knowledge (North and Kumta 2014).

1. The first point of recommendation for the Unilever Company would be the application of SECI model into the organization to foster a correct flow of knowledge. The application of the model would help the Company in understanding and analysing the tacit and the explicit form of knowledge that are useful. It rather helps in categorising the different sets of knowledge within the organization, which is rather helpful in adopting an analytical approach towards the highlighted issues in Unilever.
2. For becoming cost effective in the product line, which has remained a problem for Unilever, it can actually go for the explicit to the tacit form of knowledge. Moreover, this is helpful in absorbing to the cost effective strategies and then applying it to the product line to bring effectiveness in the offerings. The prising of some of the products has always remained a problem for the Unilever Company. This is because of the fact that the Company depends heavily on the distributors. It does not have its own shops and online presence for the shopping. Cost effectiveness is one strategy, which can actually re-establish the dominating character of the Company in the market.
3. Market research is another point of recommendation for Unilever as it is lacking seriously in this part of business. Nevertheless, market research is of utmost importance for any kinds of business such as multinational business and small sized business. It helps in grabbing a control on the pricing of the product along with it the quality of the product is also supported from an extensive market research. Market research is something that helps in realizing the actual needs of customers of different locations in world. The externalization process of the SECI model is helpful in sharing the derived market research on product related things. This is also helpful in distributing the knowledge derived from the market research.
4. Customer Relationship Management is the last recommendation for the Unilever Company as they lack in quality personal in their customer relationship management. In this context, also the explicit to tacit form of knowledge is effective as this enables the application of the derived knowledge. The gathered knowledge from different resources can well be transformed into tacit form of knowledge by editing the collected knowledge.

Conclusion

Knowledge management models help in analysing the gap in the knowledge management related flaws in the Company. The SECI model is theoretically very effective in bringing the knowledge management related gaps in Unilever. However, the success of the model depends solely on the application of the model by its management. It is the higher management that realize and decide on the necessary performance related input. A serious concern from the management of the Company is required to have some benefits of the model in their knowledge management related gap. Knowledge management is an important part of an organization and to an organization like Unilever, it becomes necessary to have modified knowledge management model at regular intervals. This would bring effectiveness in the knowledge management and would prevent from any saturation in the performance. Unilever is suffering of many problems that are keeping it behind to its competitors in net profit gain. Nestle and P&G are ahead to Unilever in terms of profit growth. Of all the problems that are causing Unilever to suffer, knowledge management is one of the most effective factors. SECI model guides through a principle of working, which is based on some theoretical facts. However, the success of the model depends solely on its way of application into the organizational practices.

References

Becerra-Fernandez, I. and Sabherwal, R., 2014. Knowledge management: Systems and processes. Routledge.

Fuller, S., 2012. Knowledge management foundations. Routledge.

Groff, T. and Jones, T., 2012. Introduction to knowledge management. Routledge.

Grundstein, M., 2012. Three postulates that change knowledge management paradigm. INTECH Open Access Publisher.

HBS Working Knowledge. 2017. Unilever—A Case Study. [online] Available at: https://hbswk.hbs.edu/item/unilevera-case-study [Accessed 8 Apr. 2017].

Hislop, D., 2013. Knowledge management in organizations: A critical introduction. Oxford University Press.

Holsapple, C. ed., 2013. Handbook on knowledge management 1: Knowledge matters (Vol. 1). Springer Science & Business Media.

Koenig, M.E., 2012. What is KM? Knowledge management explained. KM World. Viitattu, 10, p.2014.

Liebowitz, J. ed., 2012. Knowledge management handbook: Collaboration and social networking. CRC press.

North, K. and Kumta, G., 2014. Knowledge management: Value creation through organizational learning. Springer Science & Business Media.

Rao, M., 2012. Knowledge management tools and techniques. Routledge.

Shannak, R., Masa’deh, R., Al-Zu’bi, Z., Obeidat, B., Alshurideh, M. and Altamony, H., 2012. A theoretical perspective on the relationship between knowledge management systems, customer knowledge management, and firm competitive advantage. European Journal of Social Sciences, 32(4), pp.520-532.