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Knowledge Management

Knowledge Management in Organizations


Knowledge management concepts involve knowledge sharing, creation and organization learning that an organization has to utilize to be successful. Innovation is another concept that helps organizations grow and become competitive in the market. Investment in innovation results in expansion, creation of new knowledge and ideas, and an improved output of the company. To be successful, an organization should know how to create a joint venture with another organization to create a room for pooling resources and acquiring new skills through organizational learning. The organization should also know how to integrate the use of social media to advance its knowledge management base for efficient knowledge creation, transfer and learning. Finally, organizations should know how to transfer their knowledge with local markets and other organizations. The sharing of knowledge is essential for ensuring expansion of a company.

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Toyota 3 distinctive approaches to knowledge management

In recent years, Toyota has become the most competitive car manufacturing company in the world making millions dollars of profit every year. The Toyota Company has built its reputation by producing high quality, durable and reliable cars which has resulted in its global success in the field of car manufacturing. Many companies in other areas such as the healthcare sector have adapted the famous Toyota Way, which has gained popularity over years (Ichijo and Kohlbacher 118). Toyota has embarked in innovative projects and international joint ventures. Combination and interaction of all elements within the company has enabled Toyota to achieve a sustainable competitive advantage for a long time. Toyota uses three distinctive approaches to develop knowledge management practices within its organization, which include knowledge creation, knowledge sharing and organization learning. These three approaches differentiate Toyotas knowledge management from other companies.

Knowledge creation approach

Knowledge creation is the reason behind the success of Toyota in the local and global market, which makes it the champion in car manufacturing. Creating new knowledge is not an easy task as it needs innovative mind and resources (S?mundsson and Holm?n 25). Toyota has successfully created new knowledge, disseminating it through the company, and embodied it in products and services it offers. Toyota developed a production system, which played an important role in developing new and unique products for the company. It engages not only in individual knowledge creation but also in global joint knowledge creation. The ability of Toyota to work with other companies to create knowledge has contributed to its competitive edge. Toyota creates knowledge through interaction of with other global and local companies. The company introduced the Innovative International Multi-purpose Vehicle Project, which involves producing vehicles in local areas, where they can easily interact with local customer and identify their tastes and preferences (Sveiby 1638). There is an increasing competition in the market; therefore, the only way to survive is to know the preferences of the customers at the local level and satisfy their needs. The focus of Toyotas IMV project is to penetrate in the emerging market and use competitive pricing to gain a market share. The project uses act global, learn local formula to win the market, which involves utilizing local resources and distributing cars across the world. The key factors that ensured Toyotas success were the ability to instill the knowledge vision to the employees, efficiently manage conversions, mobilize knowledge expertise, and create the right context that leads to the success of Toyota. Knowledge creation has enabled Toyota to control a large share of the market worldwide.

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Knowledge sharing approach

The success of any company is determined by the extent to which it is willing to share its knowledge with others so that they can benefit from new knowledge. The Toyota Company has utilized the knowledge sharing approach to the maximum. Firms in Japan have formed strong relationship ties (keiretsu), which enables them to share knowledge by gaining detailed familiarity with each others functioning (van Wijk et al. 833). Hence, creation of new knowledge after combining the shared knowledge enables them to produce innovative ideas. Toyota and other leading Japanese companies have developed bilateral and multilateral knowledge-sharing systems and their suppliers have seen the growth of interorganizational learning. Toyotas competitive advantage has been formed by its willingness to share knowledge with other companies. The benefits of alliances, partnerships and international joint ventures (IJV) cannot be underestimated.

The sharing of knowledge between Toyota and other companies has contributed to great learning. Thus, Toyota and General Motors have established a venture for creation of a wide base of resources for car manufacturing, which has contributed substantially to their success in the automotive industry. The company also cooperated with PSA Peugeot Citro?n in Koln, which has led to successful development and production small passengers cars that popular in the European market. There has been a growing demand for their cars in many parts of the world, especially Europe, which has contributed to high profit and expansion of both companies. Therefore, TPCA project, which is a joint venture between Toyota and PSA Peugeot Company, resulted in the development of new market vehicles that are efficient, effective and cheaper compared to other cars in the market.

Organizational learning approach

Organizational learning plays a crucial role in harnessing the power of Toyota. The company has decided to identify the needs of its local customers and their car preferences, which has enabled them to learn more and integrating the gained knowledge in the cars they produce. Knowledge gained from other companies and local consumers enabled Toyota develop unique car models (Wang and Noe 118). Toyota and other leading automotive companies have developed knowledge-sharing routines with their suppliers, which results in superior organizational learning and sharing of knowledge. As a result, Toyota learned new techniques from other companies, which were integrated to produce models of cars that gained the leading position in the market. The company has also utilized alliances and joint ventures as a means to identify and borrow aspects that make other companies successful (Suneson and Heldal 434). The TPCA project enabled both companies to learn a lot and advance their skills in car manufacturing. Finally, Toyota participated in a series of activities and partnerships, which has enabled it to learn.

Case study: Xerox

Xerox has established an open business model based on the belief in interaction coordination or collaboration. The initiative demonstrates how Xerox has progressed in their knowledge management (B and Woodard 17). This company US-based company, which was established in 1960, provides document solutions and services in more than 150 countries of the world. Adaptation of an open business system has assisted it in the implementation of appropriate knowledge management practices (Attour and Barbaroux 20). A free collaborative network in the organization structure has facilitated innovation through the information transfer strategy, which helps Xerox attain a powerful innovative potential. According to Chesbrough, an open business model allows the flow of information and knowledge from external and internal sources, creating a friendly environment for the success of a business. In 2001, Xerox applied this system after on-site solutions developed by their technical team of engineers failed to be distributed effectively among the technical teams of engineers and support staffs (Attour and Ayerbe). An open system of management allowed the companys engineers to distribute and share information with workers. The company developed Eureka, a KM application which the staffs could log in and obtain all the required information. This innovation provided allowed establishment of more knowledge management practices such as information storage and training.


In the implementation of the system, the main objective of Xerox was to enhance innovation. Researchers say that the success behind industrial and organizational innovation is based on the handling of information that a company possesses. They proposed testing the hypothesis on the relationship between knowledge management practices and creativity and innovation in the overall performance of the firm. With the introduction of the system, Xerox applied various knowledge management practices, which has enabled the company to make profits through increased sales and strengthen trust between corporate staffs. Additionally, Xerox reported $19 billion of revenue last year, which illustrates the success of the company (Andersson et al. 32). Another objective in the adoption of the system was the ability to circulate information within industrial clusters. Given the industrial cluster in Taiwan, it is crucial to perform knowledge management among a huge diversity of state and private enterprises in collaborative industries rather than among individual (Alegre et al. 458). Xerox collaborated with Xeroxs Palo Alto Research Center (PARC), 3Com, Apple and Microsoft to improve the quality of their services, increase profits and create business connections with successful companies.


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In the case study of Xerox, there exist some challenges in the application of the strategy of knowledge management. They involve the loss of finances as the company tries to invest in training their employees and the risk that important knowledge might leak to competitors (Akbar and Mandurah 762). Sharing of income arising from patents, distribution of confidential information and commercial secrets, and the risk of internal resistance are some of the challenges that Xerox can face (Ahern et al. 1378). Thus, InnoCentive Company that was developed in 2001 to supply Internet connection to a group of organizations termed as seekers has undergone challenges from clients from several countries ranging from hacked Internet connection to financial losses (?gerfalk and Fitzgerald 390). Moreover, according to research, about three out of ten companies that collaborate and engage in information and knowledge sharing face managerial and financial challenges, which lead to their collapse and deterioration.

Several measures can be applied to reduce the risks involved in knowledge management. They include definition of goals and objectives to clearly determine the direction that the management should follow if involved in knowledge transfer and sharing with other companies, being transparent about motives when engaging other external organizations in knowledge supply, provision of training to the staff, budgeting of adequate resources, recruiting internal champions, and involvement of leadership (Afuah and Tucci 360). HP and IBM are two companies that have applied these measures and enjoyed considerable success in their collaboration, knowledge sharing and training of their staff to enhance the quality of service and the level of satisfaction of their customers.

Impacts of social media on knowledge management approaches

Social media such as Facebook, Twitter, LinkedIn have changed the control of corporate knowledge, placing it in the hands of customers. Therefore, companies had to align their knowledge management to these changes. Social media has exposed companies to a new population that are using their products. Social media also improves the knowledge management techniques used by companies (Bonson and Flores 38). Thus, companies can easily gather information and share knowledge with a large number of people. Organization can tap into a greater knowledge base of social communities using Facebook and Twitter. However, there is a challenge of open and unstructured knowledge base because most of the customers use Google to answers the questions asked by company in FAQS and online knowledgebase. Another challenge that arises is how to gather and organize information from social media to broaden knowledge that can be used by an organization.

Social media have already contributed to great success in knowledge creation in the organization. The company can obtain more information from blogs, Facebook and Twitter and thus provide better service and products and develop new ways of doing business (Bowley 234). Social media also facilitates tacit sharing of knowledge, which is crucial in a new business. Useful information from social media can help overcome the barriers of knowledge management since the management can easily locate knowledgeable people with expertise to handle knowledge management problems (Aisenberg Ferenhof et al. 45). Therefore, the organization management should understand how to use social media to get value from knowledge exchanged rather than control social media with traditional knowledge management approaches.

Traditionally, knowledge was transferred through books. However, with the invention of social media, people can easily share knowledge through Facebook and Twitter. Therefore, organizations have to reconsider their traditional approaches to knowledge management to fit the current situation of knowledge creation and sharing through social media.

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