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SHARED KNOWLEDGE AND PERFORMANCE OF MANUFACTURING FIRMS IN NIGERIA

Business Administration & Management Project Topics

CHAPTER ONE

 INTRODUCTION

 

  • BACKGROUND OF STUDY

Shared knowledge and performance have been relevant in four epochs namely the era of early influences, the era of the industrial revolution, the era of scientific management movement and the modern era. Many records and ideas relating to management date from antiquity. Among these are the records of the Egyptians, the early Greeks, and the ancient Romans. In addition, there have been the experience and administrative practices of the Catholic Church, military organizations, and the cameralists of the sixteenth to the eighteenth centuries. Interpretation of early Egyptian papyri, extending as far back as 1300 B.C., indicate the recognition of the importance of organization (Koontz, O’donnel and Weirich, 2000:34).

 

The Industrial Revolution in Europe was the transitory phase from the manufacturing or putting-out system to the factory system. The present thesis will attempt to show that management was relevant during the three epochs of the Industrial Revolution in Europe, United States of America and Japan and so it was more of a Management Revolution than an Industrial Revolution (Berliner, 2003:5). Although Frederick Taylor, who did his work in the early years of the twentieth century, is usually called the father of scientific management, many persons before Taylor considerable contributions to the development of management thought (Koontz, O’donnel and Weirich, 2000:34).

 

Knowledge management is a relatively new discipline and therefore has a short history. As a conscious discipline, it developed from the various published work of academics and pioneers such as Peter Drucker in the 1970s, Karl-Erik Sveiby in the late 1980s, and Nonaka and Takeuchi in the 1990s. It began when the concept of a “knowledge company” was introduced in published literature (Uriarte, 2008:32-38)

The 1970s

In the 1970s, there was increasing use of information and this led to an increase in the performance of the workers. Both implicit and explicit knowledge were relevant as valuable assets of organizations. Most organizations became learning organizations and emphasized the cultural dimension of managing knowledge. Management of knowledge became very relevant. Knowledge was seen as specialized information and information was seen as processed data and the output of the statistical system, the data processing system and the integrated computer system. Information became a very important resource which needed to be integrated with such other resources as the human resource, materials, money, time, energy, knowledge, and infrastructure. These resources when processed would lead to an improvement in the performance of the brewing staff as the output.

 

This growing recognition of the importance of organizational knowledge led to an increasing concern over how to deal with exponential increases in the amount of available knowledge and the complexity of products and processes. It was at this point that the computer technology, which in the first place contributed heavily to the great abundance of information, started to become part of the solution in a variety of ways.

 

Two examples of technology solutions that were available for use in early knowledge management systems can be cited.

 

The 1980s

Classical economic theory does not fully recognize the value of knowledge as an organizational asset. However, by the mid-1980s, the importance of knowledge as a competitive asset was already well-recognized, in particular, its expression in professional competence. Nevertheless, most organizations still did not have the strategies and methods for managing knowledge. It was during this period that Peter Drucker coined the term “knowledge worker”. He, together with other foresighted writers like Matsuda and Sveiby, wrote in-depth about the role of knowledge in organization. Thus by the late 1980s, the ideas that they had developed together with the work done in artificial intelligence and expert systems gave rise to such concepts as “knowledge acquisition”, “knowledge engineering” and “knowledge-based systems” and other computer-based ontologies. These developments gave further impetus to the growth of systems for managing knowledge.

 

As more thinkers and scholars publish their work, the phrase “knowledge management” formally became part of the lexicon of management. And in order to provide a technological base for managing knowledge, a consortium of U.S. companies started in 1989 the “Initiative for Managing Knowledge Assets”. As a result, numerous knowledge management related articles began appearing in journals like Sloan Management Review, Harvard Business Review, and others. Simultaneously, the first books on organizational learning and knowledge management were published, including Senge’s The Fifth Discipline and Sakaiya’s The Knowledge Value Revolution (Uriarte, 2008:32-38)

 

The 1990s

By 1990 a growing number of academics and consultants had started talking about knowledge management as the new business practice. At the same time, a significant number of large management consulting firms had begun in-house knowledge management activities and several well established U.S., European and Japanese firms instituted focused knowledge management programs. This came about as a result of the publication of the seminar book of Ikujiro Nonaka and Hirotaka Takeuchi (1995:198-230) titled The Knowledge Creating Company: How Japanese Companies Create the Dynamic of Innovation. And more and more articles on knowledge management began to appear in an increasing number of business journals. The agenda of many conferences also started to include knowledge management as a main item for discussion. But the introduction of knowledge management did not come until 1991 when Tom Stewart published the article “Brainpower” in Fortune magazine. This was followed by many more articles in widely read publications, most notably articles written by Nonaka, Stewart, and others. Nevertheless, business executives and professionals did not yet show widespread interest in the subject (Uriarte, 2008:32-38).

It was only in 1995 when knowledge management in its current form first received significant attention among corporations and organizations. The ability to create knowledge became a success factor that was very relevant in Japanese management. The Japanese did not have raw materials but they had the technical knowledge and other resources that were processed using machines, methods and maintenance to get an improvement in performance as their output. This led to an economic miracle. (Uriarte, 2008: 32 – 38)

By the mid -1990s, it became widely recognized that the competitive edge of some of the world’s leading companies was for the most part due to the robust knowledge assets of those companies. With this realization, the management of knowledge suddenly became a mainstream business objective. At the same time, nurturing knowledge assets such as competencies, customer relationships and innovations became a focus of attention of many corporations. And other companies started emulating the knowledge management practices of the market leaders (Uriarte 2008,32-38)

 

The International Knowledge Management Network (IKMN), which started in Europe in 1989, went online in 1994. It was soon joined by the Knowledge Management Forum, based in the United States. Shortly thereafter, many other KM-related groups and publications started appearing. There was a tremendous increase in the number of knowledge management conferences and seminars as organizations focused on managing explicit and tacit knowledge and leveraging these resources to achieve competitive advantage. In the same year, IKMN published the results of a knowledge management survey conducted among European firms. In 1995 the European Community began offering funding for KM-related projects through its ESPRIT program.

By the end of the 1990s, big businesses started implementing “knowledge management solutions”. Knowledge management became a rage and came to be seen as a highly desirable alternative to the failed Total Quality Management (TQM) and business process re-engineering initiatives. As a result, knowledge management projects became big business and source of revenue for major international consulting firms such as Ernst & Young, Arthur Andersen, and Booz-Allen & Hamilton. In addition, a number of professional organizations interested in such related areas as benchmarking, best practices, risk management, and change management began exploring the relationship between knowledge management and their areas of special expertise. These included reputable organizations like the American Productivity and Quality Council and the American Society for Information Science (Uriarte,2008:32-38).

 

Knowledge management is popularized and has been spread across the industrial and the information research world in 2000s. Organizations understand the significance of intellectual capital that is managed efficiently in order to improve the entire organizational performance by aligning the ability of employees in accordance with the overall business strategy. The knowledge management focuses on merging people, processes, and technology together by combining with the ability with the objective of providing corporate knowledge at an organizational standard. Knowledge management centralizes the multi-disciplined behavior for achieving organizational aspects by using the best of knowledge. Knowledge management focuses on processes that are composed of acquisition, creation, sharing and applying knowledge. Knowledge management is considered to be organizational innovation that shifts the overall business strategy and is transmitted in management practices.

Knowledge portrays a firm’s intellectual capital which is made up of experiences related to work, capability, knowledge and best practices (Nonaka, 1994:24). Today’s economy has changed into a knowledge driven economy. Organizational executives are concerned about developing strategies for knowledge creation, sharing, dissemination, and adaptation within the organization by using the ability of employees to achieve the knowledge enrichment management. That concept prioritized the effect of people and social networks on the knowledge creation process. A firm must also realize the value of cultural knowledge as it is a very sensitive subject. In today’s society, multiculturalism is widely accepted and it is important for organizations to realize that every culture does not require the same consistency or frequency of knowledge. It is more important to maintain retainability within a culture’s knowledge.

 

Some studies are using quantitative measures of knowledge management projects impact, like the return on investment (Anderson 2002:14). Finally, quite a few empirical studies are investigating into the causal relationships of knowledge management and/or information technologies with performance (Nelson and Cooprider 1996: 409-429), Armistead 1999: 143-154, Chong et al 2000: 366-380).

 

In today’s business environment, change is constant and multi-dimensional. New competitors, new potential customers, advanced new technology, and intense global competition alter or completely modify most industries in unexpected manners. To perform excellently, organizations must use this turbulent environment as an opportunity rather than a threat. Organizations need to adapt quickly to new conditions. Knowledge sharing is considered an important factor related to the ability of both employees and organizations to respond quickly to a changing business environment. Prior studies focus only on knowledge sharing antecedents or consequences (Du, Ai & Ren, 2007:234; Hsu, 2008:48; Hsu, Ju, Yen & Chang, 2007:57; Kuo & Young, 2008:67; Law & Ngai, 2008:86; Siemsen, Roth & Balasubramanian, 2008:45; Yang, 2007:40, 2008:8, 2009:62). Knowledge sharing has been cited as a precondition of organization competitiveness (Du et al, 2007:32; Hsu, 2008:42; Kearns & Lederer, 2000:71). In other words, the assumption here is that knowledge sharing can help organizations to outperform direct competitors. Meanwhile, Parker and Kyj (2006: 27-45) highlights the importance of revealing normally private information through the budgeting process to gain competitive advantage. Although top management believes that information technology enables knowledge sharing practices, the truth is that willingness and attitudes of individuals is the key factor (Yang, 2008: 530-543).

 

According to Bock & Kim (2002:14-21), knowledge sharing is considered the cornerstone of knowledge management. Also, (Inkpen 2000: 1019-1043) asserts that: “unless individual knowledge is shared throughout an organization, the knowledge will have a limited impact on organizational effect”. Lin (2008: 1508-1521) describes this in operational terms: “the exchange of knowledge and sharing of experiences among different organizational units.”

 

The modern era in the study of shared knowledge and performance included the American management, the Japanese management and Nigerian management. In the case of American management, it has been backed by an economy that is very wealthy. The Ford use of modern techniques to have a mass production of cars was very spectacular. American managers do a lot of planning as the first management function but there is a lot of hurry. In the case of Japanese management, the planning is slow and thorough. The Japanese miracle is borne by the ability of the Japanese to import raw materials and manufacture and export finished manufactured goods in a lot of industries especially in electronics. Japanese management is characterized by employee longevity, culture bound management, life time employment, use of quality circles. In the case of Nigerian management, it is characterized by an impressive economic growth comparable to some countries in the Asian tigers. The Nigerian Bureau for Statistics did a rebasing to which the Gross Domestic Product growth rate between the last quarter of 2013 and the first quarter of 2014 gave a Gross Domestic Product growth rate of 7.4% making the Nigerian economy bigger than that of South Africa and the largest in Africa. But unfortunately, this economic growth is not backed by employment, poverty alleviation and change in many macro economics variables (Nigerian Bureau of Statistics, 2014:1).

 

  • PROBLEM STATEMENT

 

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