Chapter 1
Problem and its Background
I. Introduction
The real of business has developed into a field of massive competition and overly demanding atmosphere. A constant drive for improvement and development is seen in every organisation as they incessantly find a competitive advantage over the other players in their respective industries. Organisational studies have maintained that a sure way of achieving success in the current conditions of business is by finding a balance between the demands of both internal and external environments on which the organisation directly operates. For multinational companies, a level of complexity is apparent. With a wider scope of operational activities and factors to consider in terms of the workforce and marketing operations, the use of recent organisational development initiatives is indispensable. McCain International Inc is an exemplary example of a multinational organisation that is directly subjected to the demands of the international market. Striking a balance with its internal and external environments is thus necessary. This paper will examine the organisational development initiatives of the company. Particularly, an analysis of the knowledge management techniques of the multinational company and its implications to the marketing and human resource elements in the organisation will be given. This chapter will serve as an introductory part of the dissertation in order to establish the framework on which these discussions will be based.
II. Background of the Topic
The intensity of competition among organisations nowadays has been rather intense that the acquisition of competitive advantage is not enough to ensure success. Companies have to find a way to sustain it. Recent organisational studies have pointed out that properly implementing knowledge management (KM) initiatives would be among the best ways of sustaining competitive advantage. ( 2006, 34) As the name of the concept suggest, the process of implementing this organisational development initiative requires attending to the knowledge that permeate in the organisation. As seen in numerous studies, this is a tight spot for any organisation as there is an apparent inundation of this aspect and it comes flowing in a daily basis. The systematic way, as introduced by the principles of KM, is to determine what type of knowledge is relevant for the company. (Desenberg 2000, 52)
The best way to characterise KM is to view it as provided by Desenberg (2000, 52) in his article. He mentioned that KM is essentially described as a business strategy; the process of creating new knowledge; and the transfer of knowledge and best practices. Basically, this means that for a company to implement KM strategies in its organisation, it must realise that the core of the development process is the type of knowledge uncovered and how it is disseminated and accessed by the individual units of the organisation. Ultimately, the implementation of KM principles and strategies will, in due course, provide added value to the organisation in general.
III. Aim and Objectives of the Study
The respondent company, McCain International Inc, serves as the marketing arm of McCain Foods Limited with their headquarters in the mission-objective of “winning with customers and consumers; driving quality and innovation; creating enablers to fuel investment; and achieving profitable growth.” (McCain 2007) Its products are distributed all over the world thus making its operations immensely complex and require proper knowledge management strategies.
The field of organisational development in the context of knowledge management covers several approaches as seen in the existing literature. Thus, the discussions of this dissertation will pertain to the relationship of the information technology present in McCain International Inc in implementing their marketing programmes. The study will be addressing this issue by taking on the following objectives in the course of this study:
· How is knowledge managed in McCain International Inc stationed in Kuwait in terms of:
o The style and image of the product in the market. (Netware)
The work of Kellner (1995, 233) indicated that the presence of style and image of a particular entity establishes its identity to the general public. More importantly, the creation of an identity through its style and image allows establishes the manner in which one is perceived and accepted by the public. (p264)
o Industrial relationship as well as the HRM components (Wetware)
For decades, studies have indicated the importance of the proper operations of human resource management and industrial relations for the overall effectiveness of the organisation. (Swiercz and Spencer 1992, 35) More specifically, these types of studies have maintained that such procedures allow the company to achieve sustainable competitive advantage in their operations.
o Actual operations in the organisation (Hardware); and
In this part, measures of firm performance like its return on investment (ROI) or return on assets (ROA) will be taken into consideration. These are acquired by “dividing net income before taxes by total assets.” (Garbi 2002, 1) In this regard, this paper accepts the assumption that the efficiency of the operations of the company is one of the best ways of assessing the level of goal attainment of the organisation.
o The culture of the organisation (Software).
Culture has been said to be an asset for any organisation, especially if it considered a strong one. However, Cabrera and Bonache (1999, 51) indicated in their work that a culture could only be considered an asset if it is aligned with the strategies of the organisation. Thus, a fit between the organisational culture, mission statement, and the strategies of the firm should be established to ensure organisational success.
· How is knowledge conceived in McCain International Inc?
One important element in implementing the knowledge management process is by acquiring and creation knowledge. Studies have used these activities (knowledge acquisition and knowledge creation) interchangeably. For this study, the definition of knowledge creation is emulated from the study of (2006, 34) describing it as “mechanisms that an organization uses to develop new knowledge internally.”
· What is the role of information technology in the operations of the company particularly in
o Management of the operations
Studies have mentioned that information technology has contributed to the increase of labour productivity. Essentially, labour productivity is an “indicator of the efficiency with which labor is being utilized.” (2002, 16) For this paper, the IT effects on operations will be perceived through the changes in labour productivity of the company.
o Management of the workforce
The automation of administrative human resource functions has pointed out significant “reductions of HR headcount, as well as freeing up functional resources for attention to more strategic matters.” (1996, 56)
o Management of the marketing operations
The emergence of the World Wide Web and other internet technologies has made IT become an “essential marketing tool” for multinational companies. (Pietrykowski 2001, 299) For this dissertation, examination on how McCain International Inc employs IT initiatives in their marketing operations will be made.
· What is the relationship of McCain International Inc’s organisational development and its marketing initiatives?
For this objective, the study intends to use the knowledge management schemes used by the company in establishing the relationship between the organisational development marketing initiatives of the firm.
IV. Plan of the Study
The study will provide a qualitative and a quantitative analysis of the organisational development in McCain International Inc in Kuwait. Specifically, an examination on the knowledge management initiatives and marketing approaches of the company will be made to carry out the main objective of this dissertation. The thesis will be separated to five chapters in order to establish a clear and cohesive study of the company. The first chapter will serve as the preliminary part of the thesis. This means that it is in this part of the paper that the introduction of the problem, the description of the background, and the importance of the study will be stated. Along with these, the overall coverage of the thesis will also be indicated in this chapter.
The second chapter will be pointing out the existing literature that has delved with the similar topic and issues of an organisation. Basically, the second chapter will be tackling the issues and concepts indicated in the objectives of the study mentioned in the first chapter. The first part of the literature review will be an analysis of the knowledge management literature. Specifically, the review will be based on the concepts of netware, wetware, hardware and software with particular reference on their importance on the organisation. The second part of the literature review will document the role of knowledge creation in organisations. Particularly, the internal creation of knowledge will be the focus of the review. The third part of the second chapter will cover the role of information technology (IT) in the overall function of the organisation. The discussions will be taking on the relationship of the operations, human resource and marketing with IT initiatives of the organisation.
The third chapter of this dissertation will look on the methodology used in the research. Basically, chapter three will cover a brief description of the models employed, the respondents used in the study, the statistical tools employed to test the claims of the dissertation, and the ethical concerns encountered by the research.
The fourth chapter provides the discussion of the respondent company based on the data obtained from the respondents. A summary of the findings will be presented using tables and figures and relate it to the analyses made in the second chapter of the dissertation. In the same regard, data from the annual reports of the company will also be used to determine the changes and developments that they have incurred throughout the years in terms of their operations.
The final chapter will be covering the summary, conclusions and recommendations of the paper. Basically, this chapter will succinctly present the findings of the research and establish the implications of these findings to the organisation and the field of organisational development. Moreover, a set of recommendations will also be provided based on the overall arguments and observations made in the dissertation.
V. Rationale of the Study
There have been copious amounts of organizational studies relating to the marketing initiatives of a firm. Nonetheless, not much has been noted concerning studies determining the organisation’s competitive advantage, market share, and stability of consumer base compared with the marketing initiates by the organization. Competition in the business sector has become rather intensified by several nicks over the traditional ideas quite a few years back. Nowadays, organisations could not manage to make errors chiefly in their marketing practices. Major losses will be foreseeable the moment they yield to the tests caused by their environment.
This dissertation is found under the rationale of the modern company being highly dependent of knowledge to sustain its competitive advantage over the other players in the industry. (2006, 34) In the same regard, the importance of treating this dependence on knowledge is compounded by the demands of the environment, especially with multinational firms. Aside from the dependence on knowledge, the need of organisations to employ developments in technology in order to address the demands of the environment is tied to it inexorably. (Desenberg 2000, 52) This means that in order to effectively establish the implications of KM initiatives in McCain International Inc, discussions and examinations on the company’s IT capability and applications are vital.
Organisations have to, as a result, find themselves individual spots where they could ascertain their own competitive advantage to feasibly engage the other players in the industry. In the case of McCain International Inc, the use of knowledge management and IT applications in their operations could be the major component in their search to attain sustained and continuous organisational development devoid of taking for granted the mission-objectives of the company.
VI. Significance of the Study
The existing literature on organisational development and knowledge management has been rather brimming for the part years. However, this study provides a chance to find out the relationship of KM, HRM, and even marketing approaches on the current settings of the modern multinational company. More specifically, this study will be able to provide a profile for an archetypal multinational organisation that operates in the Middle East as the study will look at the overall operations of McCain International Inc in Kuwait. This will be able to give the reader some perspective of the differences in the demands in the Middle Eastern setting. This could also be helpful in the case of organisational studies as it be a welcome addition to their vast number in record. In the same account, it may also serve as an impetus to other academics in pursuing further studies of multinational organisations operating in the Middle Eastern setting.
VII. Scope and Limitations
The arguments and observations that will be seen in this dissertation are to be based on the rationale and the aims and objectives pointed out in this chapter. In the same regard, the data coming from the qualitative and quantitative research done in the course of this study will be treated with high ethical consideration. The data coming from secondary sources will be cited constantly and those coming from the primary sources will be treated without any form of bias. In this regard, the discussions, claims and observations made in this dissertation will not be subjected to any allegations of manipulation or impartiality. To this end, it is the desire of this researcher to maintain an objective process in providing the findings of this dissertation.
Chapter 2
Literature Review
I. Introduction
In the advent of globalisation, the context of global competition has shifted towards a level epic extent. Demands from the market have excessively made companies boost their standards just to keep up with the competition. Studies have indicated that a shift towards a global mindset in order to be able to address all the demands of a operating in a global scale. (Levy, Beechler, Taylor, and Boyacigiller 2007, 231) This is especially true for multinational companies. Aside from the need to shift their cognitive direction, sustaining the competitive advantage is also an adamant element that multinational companies need to carry out. This chapter will be looking into the use of knowledge management and information technology as a means of sustaining this competitive advantage among multinational firms. The discussions below will provide a basic account of those found in the current and existing literature on the aforementioned topic. In the same regard, the said accounts will concurrently be analysed in order to establish the current situation of knowledge management and IT technologies among organisations that operate in the international level. In the end of this chapter, a synthesis will be made so as to summarise the arguments and observations made in the earlier parts. Moreover, the synthesis will also relate these arguments and observations to the aims and objectives maintained in the previous chapter.
II. Knowledge Management
In the realm of organisational development, the concept of knowledge management is deemed as one of the most recent theories covered by organisational studies. From its humble beginnings as a theory covering the basic assumptions of data flow and sharing in the organisation, the theory of knowledge management (KM) has become one of the prevailing theories covering the use of IT processes and applications in the organisation. In the study of Klein (2000, 88), he noted that the inclusion of IT applications and processes in the organisation basically increases the organisation’s core competencies which in turn improves the overall efficiency of the organisation.
Having been dubbed as among the new theories in the area of organisational development, it is not surprising that KM has yet to establish a singular theory that covers all the minor models claiming as a part of the KM theory. However, a common theme of innovation and knowledge has been apparent among these models of KM. (Hyde and Mitchell, 2000, 57) Such a claim indicates that the most of the KM models from the past have regarded the two concepts as inseparable, that one could not function well without the other.
In the early days of KM, access to the available information is the main concern. (Steyn, 2004, 615) In the context of the organisation, the capability of the employees to gain access to this information dictates the possibility of development and eventual realisation of organisational goals. These information are labelled as tacit and explicit knowledge. (Hyde and Mitchell, 2000, 57) The former is described as the unwritten laws and norms in the organisation which essentially constitute the overall culture in the company. The latter are those written in handbooks and protocols that establishes the processes required to realise the goals and objectives of the company. In a sense, these studies have implied that the unbridled interaction between these two types of knowledge is an essential element in achieving success in the company’s organisational development endeavours. Over the years, the discussions have branched out to other areas of the organisation that, one way or another, connected to organisational development and the transfer of knowledge. To this end, elements like knowledge, learning, and IT has been considered as among the major elements in the KM model.
In the real world setting, the initiatives implemented by Ducati Motor Holdings (DMH) have been a commendable example of the KM theory in organisations. In this manner, the acquisition of the competitive advantage of the company is seen in the implementation of the KM models in the company. (2005, 578) Marketing and operational elements has been pinpointed as the key components in the achievement of the organisational goals of the company. In order to deal with the demands of competition, global competition, and sustained success the company divided its KM processes into four distinct areas: Netware, Wetware, Hardware, and Software.
The company’s Hardware indicates the actual operations in DMH. (Lerro and Schiuma, 2005, 578) In the case of DMH, they changed its operations towards the theories of lean manufacturing. Particularly, the scheme significantly developed the logistic ability of DMH as it added force to its R&D and bond with its main suppliers. The Netware centred on the style and image of their merchandise sold in the market. (p 582) This part of the KM project’s brain child is the Ducati Design. The plan acquired the upgrading of the brand of DMH as the most ground-breaking and sleek makers of top of the line motor bikes. Software, conversely, attended to the culture of the company. This portion of the KM plan addresses both internal (employees) and external (customers) individuals concerned in DMH. This KM plan shaped the Desmo Owner Club and the Ducati People. (p583) The Wetware acquired a more thorough consideration on the human resource component of the organisation. (p585) Essentially, developments in the area of industrial relationship in addition to the HRM constituents like training and development plus compensation were tackled by this KM scheme.
A. Style and Image of the Product (Netware)
In the description of the introduction to the KM theory, netware is characterised as the element of the company that deals with the style and image of the company and the products of the industry. (2005 In dealing with this area, there are several concepts which have to be taken into consideration. For this discussion, there are three interrelated areas that constitute the concept of netware: consumers and product design.
In the context of the consumers, information pertaining to the market is imperative, specifically with regards to the concept of consumer behaviour and consumer personality. In terms of consumer behaviour, marketers and psychologists has often regarded this area as a means to determine the decision making factors that constitute in the consumption process. (Haugtvedt, Petty, and Cacioppo 1992, 239) In simple terms, this type of knowledge indicates how, what, when, where, and why the consumers will likely to purchase a product. On the other hand, consumer personality is also deemed imperative in this area as it considers the target market at an individual level and not a collective whole. (Dawar, Parker, and Price 1996, 497) This means that certain areas of the decision making process are highly influenced by the established culture of a particular location. This consideration is highly imperative for multinational companies like McCain given that they have to deal with this element as they develop their operations. Further discussions on culture will be made in the later part of this chapter.
Another are connected to style and image is the actual product design of the organisation. Marketing studies have pinpointed the importance of this aspect especially in the context of global marketing strategies.(2006, 499) explained in their work that having an exceptional product design allows the marketing mix of the company to develop and attract a greater market share. This is reinforced by the study of Ojah and Monplaisir (2003, 457) as they indicated that having an exceptional product design could trigger an “expansion of customer base, formation of marketing channels that better exploit global markets, reduction of production cost by sharing some activities with strategic partners, and reduction of cost of capital.”
B. Human Resource and Industrial Relations (Wetware)
In the case study made by (2005, 584), they mentioned that wetware covers all the knowledge of the human assets “embodied” in the workforce employed in the organisation. Specific concepts mentioned in the said study were “innovation capability, creativity, experiences, teamwork capability, leadership, flexibility, tolerance for ambiguity, motivation, satisfaction, learning capability, loyalty, formal training and education, commitment, technical expertise, problem solving capability” among others. This basically shows that knowledge has to be made accessible to the workforce in order to provide the possibility of success.
Recent studies have also indicated that human resources are to be treated as assets and even “strategic business partners.” (Jamrog and Overholt 2004, 51) However, in order for the company to realise this potential of its human resource, it must make sure that its workforce possess the core competencies that it requires. These include the knowledge of business, knowledge of HR practices, and management of change. (p53) Looking at these three requirements, it appears that in achieving these three all the elements which Lerro and Schiuma (2005, 584) mentioned in their discussion of wetware should be implemented.
By doing this, multinational organisation engages to a shift in their regard in their HRM function. As indicated in the work of Arthur and Parker (2002, 38), companies then uses their human resource management initiatives from a purely administrative function into a whole new function geared towards realising the strategic endeavours of the company.
C. Measures of Firm Performance (Hardware)
Basically, hardware as mentioned above is the changes in the operations of the organisation. (Lerro and Shiuma 2005, 580) These changes are triggered by the need of organisations to increase in their productivity, their overall output, or their efficiency. In general, shifts in this area tend to indicate the realisation of the company to boost their performance to deal with the demands of the environment. Organisational studies have pointed out that developments and improvements in performance are reflected in measuring return of investments (ROI) for the organisation. (Garbi 2002, 1)
However, this framework is not free from any criticisms. Fro instance, the work of Boudreau and Ramstad (2006, 25) mentioned that this ROI framework is not applicable to human resource investments as it does not give the right questions on the making HR decisions. Basically, this is based on the fact that ROI is mainly a means of identifying elements that could help make decisions on financial investments. For this study, the use of the ROI framework will do just that, measure the financial facets of the company based on their performance in the past years. In this regard, the company’s financial status will be determined as well as their effects of these changes on the flow of finances in the past years.
D. Culture of the Organisation (Software)
III. Knowledge Creation and the Organisation
IV. Role of Information Technology
A. Managing the Operations
B. Managing the Workforce
C. Marketing
V. Organisational Development and Marketing
VI. Synthesis
Credit:ivythesis.typepad.com
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