The present business world is distinguished by dynamic changing markets and technological advance (Arthur, 1996). In the modern world, businesses are no longer confined within country borders, but are instead internationalized (Johnson and Turner, 2003). The rise of globalization opened up two main perspectives – the opportunities or threats that it may bring. Generally, it is identified as ‘the growing interdependence of countries world-wide through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows, and also through the more rapid and widespread diffusion of technology’ (Johnson and Turner, 2003). It can be an opportunity for many as it can offer “the possibility of boundless growth and prosperity, not only for developed countries but also for those developing countries brave enough to embrace rather than resist globalization in all its manifestations” (Johnson and Turner, 2003). On the contrary, it can also be perceived as a threat, as it can result in rising inequality, economic anarchy and a surrender of political control (Johnson and Turner, 2003). Either way, organizations must become more flexible in this environment in order to be competitive. They must learn to adopt with the changes taking place and sustain their business operations. In order to do so, many business theories and modern management strategies were developed to help organizations cope with a compressed business environment. One of the ways is to strengthen their potential to learn as organizations (Arthur, 1996).
The realization of the need for knowledge management is a byproduct of the information age, where almost everyone can gain knowledge and information in a snap through the use of the Internet and other digital information devices. It is logical that in information-rich societies and industries, knowledge is the real resource (Gumbley, 1998). Managers of today argue for a “pull” approach to knowledge distribution (accessed when needed), rather than the typical “push” strategy. Sharing insights and learning among dispersed groups of professionals can yield great benefits in terms of customer satisfaction and speed of solution delivery. Managing the knowledge of organizations involve harnessing the intellectual capacity of employees by building appropriate business processes and supporting information systems (Gumbley, 1998). The failure to submit to this effort may endanger an organization’s status as they lag behind key competitors in resources, technologies and other important key points in their business. It would ultimately lead to defeat in the business war. Knowledge becomes a key factor in creating values as it helps the organization perceive the business environment and react to changes (von Foerster, 1995; Arthur, 1996).
As knowledge becomes important, its management becomes equally important as well. This is mostly true to a company that operates in a global scale. Automatic Data Processing Inc. is a good example. The company offers employer-related functions in 26 countries and goes head to head with three main competitors: Administaff Inc; Ceridian Corporation; and Paychex Inc. In their business, there are many challenges that they should face, including the management of payroll, HR and staff administration of other companies, gaining the client’s trusts, and continuously improving their services. As mentioned earlier, in order to be flexible, an organization must have sufficient knowledge and means to manage it. Focusing on ADP, the aim of this study is to investigate the company’s strategies of managing knowledge resources. It will try to determine which area of knowledge the company focuses and what specific measures do they use to ensure effective knowledge management. The importance of this study is that it will help emphasize the importance of knowledge management for a global and software-based company such as ADP.
RESEARCH QUESTIONS AND OBJECTIVES
Statement of the Problem
The problem to be investigated in this study is the means to which ADP implements its knowledge management strategies and their strategies in measuring its outcomes. It will also explore the costs of ADP’s investment in knowledge management and the different software applications the company use for implementation. It will explore the affair of ADP with knowledge management and how they use knowledge as a strategic tool to raise above its competitors.
Research Questions
The main research question that will be addressed in the study is: To what extent does knowledge management help improve the competitiveness of ADP as business software and service company?
The following sub-questions will be explored:
Ø What are the knowledge management strategies that ADP implements?
Ø How important is knowledge management to the company?
Ø How does knowledge management and knowledge specifically help ADP in its business processes?
Ø What are the limitations of ADP’s knowledge management approach?
Ø What are the software applications that company use?
Ø What area of business does the company consider knowledge more important?
Objectives of the Study
The aim of the study is to investigate ADP and determine its knowledge management strategies and how they help the company achieve its goals. The following are the objectives of the study:
Ø By the investigating ADP’s knowledge management, the objective of the study is to identify its knowledge management strategies and the role that knowledge and knowledge management plays in its goals and competitiveness.
Ø To determine different tools and applications that ADP uses in implementing knowledge management.
Ø To contribute to knowledge management research and to develop theories that may help companies effectively implement knowledge management.
Significance of the Study
The study is significant to the field of knowledge management research as it may unravel useful strategies for companies that belong in the business software and services industry. It may also be important for ADP as the research may help them assess their knowledge management strategies and through the study’s results, be able to adjust their strategies for the better or determine points to which they can improve its implementation.
The study is also significant to MBA students as it may serve as useful reference for future researchers and those who will seek information about knowledge management. Overall, it may help boosts the growth of knowledge management research.
LITERATURE REVIEW
Definition of Knowledge Management
Knowledge management (KM) is defined as the process of creating capturing and using knowledge to enhance organizational performance (Bassie, 1997). It is concerned with the exploitation and development of the knowledge (both tacit and explicit) assets of an organization with a view to furthering the organization’s objectives, with the need for systems for the creation and maintenance of knowledge repositories, and to cultivate and facilitate the sharing of knowledge and organizational learning (Rowley, 2005). The two types of knowledge that concerns knowledge management are: tacit and explicit. Tacit is subjective knowledge; while explicit is documented knowledge (Rowley, 2005). Tacit knowledge deals with or rooted in action and involvement in the particular context and has both cognitive and technical elements (Nonaka, 1994). For instance, the skills of workers of retail companies in using important equipments, or the skill of the company in dealing with people is tacit knowledge. On the other hand, explicit knowledge deals with written or passed knowledge that can be easily expressed such as company rules, knowledge about the strategy of competitors, etc.
Knowledge is defined as the amount of information necessary to function and achieve goals; the capacity to make information from data and to transform it into useful and meaningful information; the capacity with which one thinks creatively, interprets and acts; and an attitude that makes people want to think, interpret and act (uit Beijerse, 2000), which means that knowledge management is simply managing all of those concerns. Organizations usually are always in need for knowledge, especially in today’s world where development of new technologies seem to be in a fast pace. Nonetheless, knowledge management (KM) is a structure within which the organization views all of its procedures as a business process. KM practitioners assume that knowledge is a modern organization’s most important resource, the only resource not readily replicated by rivals, and therefore the source of its uniqueness or competitive advantage (Davenport and Prusak, 1998). KM practice therefore, emphasizes the creation of new knowledge and the timely application of organizational knowledge to maintain strategic advantage (Lim and Klobas, 2000). Here, the organization has to be alert which knowledge is new, in the process, or already obsolete (Drucker, 1993).
Theories of Knowledge Management
According to Bagshaw (2000), the integration and implementation of knowledge management within the organization helps create models or improve the previous models in order to enhance organisational survival. There are already several models of knowledge management created for an organization to adopt. One of them is Gloet and Berrell’s (2003) model, which basically shows a dual model of knowledge management (see Figure 1). It involves an IT paradigm and a humanist paradigm. The IT paradigm highlights the rational characteristics of knowledge management as it contains technology, technical applications and data that draw attention to financial planning and reporting procedures; while the humanist paradigm is focused on the nature of learning the organisational processes of knowledge management and exploitation of tacit forms of knowledge as a source that underlines the role of individuals and groups in the practices of knowledge involvement (Gloet and Berrell, 2003). In this model, the data, information and knowledge is constantly filtered by organisations. Also, morals, structures, culture, technology, systems and values influence the filter development (Gloet and Berrell, 2003).
Figure 1: The Dual Model of Knowledge Management (Gloet and Berrel, 2003)
Another model of knowledge management is Gorelick’s (2005) model of knowledge management (see Figure 2) which basically deals with different elements specifically process, technology and people within a set culture which operate together as a system to achieve the target. This system addresses two kinds of knowledge – which which already exists; and knowledge produced within the organization.
Figure 2: Gorelick’s Knowledge Management Model (Gorelick, 2005).
In theory, there are two types of knowledge that a company must manage: explicit; and implicit knowledge. Explicit knowledge is characterised, according to various researchers, by its ability to be expressed as a word or number, in the form of hard data, scientific formulas, manuals, computer files, documents, patents and standardized procedures or universal starting points that can easily be transferred and spread. On the other hand, implicit knowledge is mainly people-bound and difficult to formalise and therefore difficult to transfer or spread. It is mainly located in people’s hearts and heads (uit Beijerse, 2000).
There is a need for enhancement of the distribution of the knowledge efficiently. The traditional form of sharing resources is from the static WebPages or the stored files. Steyen (2003) stated that it is regarded to be the major contribution of the knowledge management and would be the effort to decode tacit knowledge into explicit information. Companies are developing approaches to facilitate access to both internal and external knowledge. Indeed, networked organizations are intrinsically distributed, and thus traditional information systems are not suitable for their purposes.
There are also other useful organizational learning models such as Yeo’s (2002) model of learning loops and Seng’s five disciplines. The model of learning loops illustrates a process of different learning loops that an organization might encounter, such as: zero learning, single loop, double loop and triple loop. Zero learning occurs when member of the company cannot solve problems or crisis by useful actions. Single loop means making effortless decisions and adjustments by taking action similar to useful achievements from the past. Double loop is the assistance of members to adopt tacitly in the organization. Finally, a triple loop is concerned with raising the level of learning to increase richness, depth and wealth, by combining significant skills, abilities and information in order to improve and create new strategies and structures (Georges et al, 1999).
Seng’s five disciplines, on the other hand, include: personal mastery (a discipline of ambition, focusing on the aims and plans that the member has); mental models (a discipline of suggestion and enquiry regarding the level of thinking and how to develop it); shared vision (focuses on commitment of logic, ideas and the ways to implement these ideas) team learning (concerned with thinking like a group and taking decisions and actions in order to achieve the general targets), and; system thinking (considering the meaning of complex organisations and the possibility of improving them by organisational change) (Huczynski and Buchanan, 2004).
Related Study
One of the studies about knowledge management that greatly relates to this current study is the research by Koh et al (2005), which investigated the role of knowledge management in improving quality of customer services in call centres at Dixons Company. The theoretical framework used in the study is developed by the researchers themselves. The theory classified the personal knowledge into tacit, explicit and cultural, which teaches that any new knowledge starts with any individual within the company, and then it is shared within groups, and finally changes into organisation knowledge.
The method that Koh et al (2005) used to collect data was epistemological orientation and ethnography method as a qualitative methodology to search for secondary data. They also conducted participant observation, review of job diaries and interviews. In the end, the study found that knowledge can be achieved by effectively managing these five roles of knowledge: acquisition; utilization; adaptation; distribution; and generation. Furthermore, they found that knowledge management can be easily implemented by creating awareness among the staff about KM, its benefits, and seeking co-operation from all the staff to facilitate KM and implement the measures.
RESEARCH DESIGN
This study will adapt an interpretivist approach in research. Interpretivism is the necessary research philosophy for this study because it allows the search, the ‘details of the situation, to understand the reality or perhaps a reality working behind them (Remenyi et al., 1998). From the interpretivist perception, it is necessary to explore the subjective meanings motivating people’s actions in order to understand their actions. In other words, the aim of the interpretivist is to understand situations and give plausible and acceptable accounts of them (Varey, Wood-Harper & Wood, 2002). The timeline of the study, however, will only be cross-sectional since there is time constraint in conducting the research. The research strategy to be used is the descriptive approach in research since the aim of the study is collate information firsthand from the employees and managers of ADP. A descriptive research intends to present facts concerning the nature and status of a situation, as it exists at the time of the study (Creswell, 1994). It is also concerned with relationships and practices that exist, beliefs and processes that are ongoing, effects that are being felt, or trends that are developing. In addition, such approach tries to describe present conditions, events or systems based on the impressions or reactions of the respondents of the research (Creswell, 1994).
The samples of the study will be managers and employees of ADP. They should be officially working in ADP for 6 months onwards. Samples will be interviewed and surveyed with the use of semi-structured questionnaires. Both open and closed questions will be used in the questionnaire. A ranking approach will also be used to measure the degree of agreement of the respondents on several statements. A five-point Likert Scale will be used in this measure. In the Likert technique, the degree of agreement or disagreement) is given a numerical value ranging from one to five, thus a total numerical value can be calculated from all the responses. (Underwood, 2004) The equivalent weights for the answers will be:
Range Interpretation
4.50 – 5.00 Strongly Disagree
3.50 – 4.00 Disagree
2.50 – 3.49 Uncertain
1.50 – 2.49 Agree
0.00 – 1.49 Strongly Agree
In analysis of data, the percentage and weighted mean on each statement will be computed. The following are the formulae:
Percentage
n
% = ——– x 100 ; n – number of responses
N N – total number of respondents
Weighted Mean
f1x1 + f2x2 + f3x3 + f4x4 + f5x5
x= ——————————————— ;
xt
where: f – weight given to each response
x – number of responses
xt – total number of responses
BOUNDARIES AND LIMITATIONS
The scope of the study is only within the subject of knowledge management. Geographically, surveys and interviews will only be conducted to ADP employees and managers in the UK. Other branches will be excluded. In terms of gender, both male and female respondents will be included in the study.
Questionnaires are the only primary means in the study in collecting data. However, literature reviews will be included in the study for reference. Statistical analyses will be limited only to weighted mean and percentage. On the other hand, answers on open questions will be interpreted qualitatively.
Timeframe
May
June
July
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
April
1
2
3
4
5
6
7
8
9
10
11
12
Problem
Identification
Literature
Review
Research
Design
Choice of
Methodology
Data
Sources
Data
Collection
Data
Analysis
Writing up
Draft
Editing
Final
Document
Binding of
Document
Table 1: Timetable
References:
Arthur, B. (1996). Returns in the New World of Business. Harvard Business Review, Jul-Aug, pp.100-109.
Bassie, L.J. (1997), “Harnessing the power of intellectual capital’’, Training and Development, Vol. 51 No. 12, pp. 25-30.
Creswell, J.W. (1994). Research design. Qualitative and quantitative approaches. Thousand Oaks, California: Sage.
Davenport, T.H. and Prusak, L. (1998), Working Knowledge: How Organisations Manage What They Know, Harvard Business School Press, Boston, MA.
Drucker, P.F. (1993), Post-Capitalist Society, Butterworth-Heinemann, Oxford.
Georges, A., Romme, L. and Witteloostuijn, A. (1999) Circular organizing and triple loop learning. Journal of Organizational Change Management. Vol 12. No 5. pp.439-453.
Gloet, M. and Berrell, M. (2003) The dual paradigm nature of knowledge management: implications for achieving quality outcomes in human resource management, Journal of Knowledge Management. Vol 7. No 1. pp.78-89.
Gorelick, C. (2005) For performance through learning, knowledge management is the critical practice, The Learning Organization. Vol 12. No 2. pp.125-139.
Huczynski, A and Buchanan, D. (2004) 5th edition, Organisation Behaviour, , Pearson Education Limited, London.
Johnson, D. and Turner, C. (2003). International Business: Themes and Issues in the Modern Global Economy. Routledge. London.
Koh, S., Gunasekaran, A. Thomas, A. and Arunachalam, S. (2005) The application of Knowledge management in call centres, Journal of Knowledge Management. Vol. 9, No 4; pp.56-69.
Lim, D. and Klobas, K. (2000). Knowledge management in small enterprises. The Electronic Library, Volume 18, Number 6; pp. 420-432
Remenyi, D., Williams, B., and Swartz, E. (1998). Doing Research in Business Management: An Introduction to Process and Method. London: Sage.
Rowley, J. (2005). What is knowledge management? Library Management, Vol.20, No.8; pp. 416-419
Steven G. (2003). Creating Knowledge through Management Education: A Case Study of Human Resource Management. Journal on Education. Vol. 123. No. 3. p. 514.
Uit Beijerse, R.P. (2000). Knowledge management in small and medium-sized companies: knowledge management for entrepreneurs. Journal of Knowledge Management, Vol. 4, No.2; pp. 162-179
Underwood, M. (2004). The Likert Scale. In Communication Studies, Cultural Studies, Media Studies (CMMS) Infobase. Available at: [www.cultsock.ndirect.co.uk/MUHome/cshtml/index.html]. Accessed: [04/19/06].
Varey, R. J.; Wood-Harper, T. & Wood, B. (2002): A Theoretical Review of Management and Information Systems Using a Critical Communications Theory. Journal of Information Technology 17, 229 – 239
Von Foerster, H. (1995). Cybernetics of Cybernetics, 2nd Edition. Minneapolis, Future Systems.
Yeo, R. (2002) From individual to team learning: practical perspectives on the learning organisation. Team Performance Management: An International Journal. Vol 8. No 7/8. pp.157-170.
Credit:ivythesis.typepad.com
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