A Case Study on the Implementation of A Knowledge Management Strategy Oriented to Innovation
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A critical aspect of business management is the successful creation of processes which drive the development of a continuous flow of innovation, to give a basis for competitive advantage. To reach this goal, the establishing of a knowledge management (KM) strategy may be considered the best way to channel the organization’s efforts to this end. Knowledge management is understood in a wide sense as a process of overall change in the organization, focused on innovation, and especially related to the participation of every employee in the processes of creation and transmission of knowledge. This study analyzes the implementation of an innovation and KM strategy in the Irizar......
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Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/kpm.143
& Case Study
A Case Study on the Implementation of
A Knowledge Management Strategy
Oriented to Innovation
Francisco J. Forcadell1* and Fatima Guadamillas2
Universidad Rey Juan Carlos, Madrid, Spain
Universidad de Castilla La Mancha, Spain
A critical aspect of business management is the successful creation of processes which drive the
development of a continuous ﬂow of innovation, to give a basis for competitive advantage. To
reach this goal, the establishing of a knowledge management (KM) strategy may be considered
the best way to channel the organization’s efforts to this end. Knowledge management is
understood in a wide sense as a process of overall change in the organization, focused on inno-
vation, and especially related to the participation of every employee in the processes of creation
and transmission of knowledge. This study analyzes the implementation of an innovation and
KM strategy in the Irizar company, a maker of luxury coach bodywork. According to The
Economist Intelligence Unit, Irizar is the most efﬁcient company in the world in its sector.
Irizar’s success has been built on a system of self-management and participation, organizing
its activity into processes and using multidisciplinary work teams. This type of organization
has outstripped the traditional model, based on functions and the division of labour, and
has permitted a centering of effort on those activities which add value. Another deﬁning char-
acteristic of Irizar is its combination of continuous improvement with radical changes and pro-
cess re-engineering. A series of organizational factors are extracted from the case study which
were successful in implementing the strategy. The study shows how the organization achieved
the promotion of experience transmission and the generation of continuous innovation. It also
makes clear that the ﬁrm’s values and corporate culture are essential for success in this process.
Copyright # 2002 John Wiley & Sons, Ltd.
INTRODUCTION its ability to combine knowledge-based capabilities
and so make better use of them (Kogut and Zander,
The knowledge management (KM) strategy is 1992). New resources and generated capabilities
understood, within a resource-based view of the are difﬁcult to imitate; these become the nucleus
ﬁrm, as an overall change process and a form of of a competitive advantage, so resulting in higher
organisational renewal, focused on innovation, proﬁtability (Drucker, 1993).
through the creation, transmission and application This study analyzes the implementation process
of new knowledge (Cohen and Levinthal, 1990). used for a KM strategy in a case where a company
The implementation of a KM strategy allows carried it out successfully, deﬁnitively orienting the
improvement of the ﬁrm’s learning capability and organization towards continuous change, learning
and innovation. The study ﬁrst deﬁnes some con-
cepts relating to KM and innovation. Then the
*Correspondence to: F. J. Forcadell, Universidad Rey Juan
Carlos, Paseo de los Artilleros s/n, 28032 Madrid, Spain. implementation process for the strategy is ana-
E-mail: firstname.lastname@example.org lyzed. This analysis permits the setting out of a
Copyright # 2002 John Wiley & Sons, Ltd.
Knowledge and Process Management CASE STUDY
series of essential factors in the success of the creation does not consist of the processing of infor-
process and the advances made in KM in relation mation or data, since the obtaining of tacit knowl-
to innovation. These include the main factors in edge, which cannot be directly processed, is a
the ﬁrm’s strategic change that the implementation fundamental part of this phase. It allows for the
of such a strategy involves, between which there development of improvements and innovations
must be a ﬁt. Finally some conclusions are obtained on products and processes, capable of creating
and discussed. value, which then become part of the new knowl-
edge in the system.
In addition, it is important to consider a number
KM AND INNOVATION of aspects in the knowledge-creation process: the
organization’s internal knowledge base; the acqui-
The concept of ‘Knowledge’ integrates capabilities, sition of information and knowledge from external
abilities, structured information and the applica- sources; the integration of internal and external
tion of technologies which can improve products knowledge and its application to problem solving;
and processes, so becoming a source of competitive the creation of new knowledge and the generation
advantage (Hall, 1992; Liebeskind, 1996; Winter, of innovations from this integration, and ﬁnally the
1987). A part of the knowledge generated in the importance of the organization’s capacity to absorb
organization is explicit and can easily be stored new knowledge (Soo, Midgley and Devinney,
and transmitted; however, tacit knowledge is also 1999).
created, which is inseparable from the individuals A number of authors have shown that the new
who possess it. Knowledge can be considered as a knowledge generated is the principal source of
resource of strategic importance: it is scarce, rele- innovation for a ﬁrm. For example, Nonaka and
vant, difﬁcult to transmit in some cases (especially Takeuchi (1995: 3) bring together the experiences
tacit knowledge); it is costly and difﬁcult to imitate of Japanese companies in this respect; Teece, Pisano
(Grant, 1996). In addition, using it makes it more and Shuen (1997) emphasize the point in their dis-
valuable. cussion on ‘dynamic capabilities’; Grant (1996)
Knowledge management (KM) is understood as points to the importance of integrating different
a process for the collection, distribution and efﬁ- types of knowledge in order to innovate, while
cient use of the knowledge resource (Davenport, Kogut and Zander (1992) refer to this relationship
1994). It involves organization and improvement in their concept of ‘combination capability’. A basic
of methods, practical instruments and tools which premise has therefore been included in the creation
contribute to the managing of knowledge, in a wide of knowledge: that a ﬁrm needs to continuously
sense, in every area and level in the organization renovate its knowledge base to ensure that this
and which leads to improvement in products and base does not become obsolete for the development
methods of work. O’Dell and Grayson (1998) deﬁne of innovations. New knowledge, the basis for inno-
KM as a strategy to be developed in a ﬁrm to vation, will constitute the future knowledge base
ensure that knowledge reaches the right people at for the organization and will contribute to the
the right time, and that those people share and regeneration and widening of the existing base.
use the information to improve the organization’s A ﬁrm’s technological innovation process is
functioning. This in turn has created a need for characterized by a series of essential features
businesses to evaluate the information and capabil- (Pavitt, 1990: 18). First, there is an implication of
ities generated, in order to convert them into continuous and intensive co-operation and interac-
results which will add value and establish learning tion between groups which are specialist both
as a continuous process within the organization. functionally and professionally (R&D, Production
The process of implementation of a KM strategy and Marketing for implementation; Organization
involves the operations of creation, storage, distri- and Finance for the strategic decisions on entering
bution and application of knowledge; together, new business areas). Second, it involves a series of
these make up a full cycle. This process will be activities whose nature is uncertain in terms of
called the KM cycle, to emphasize the continuity results. In addition, it is a cumulative activity: the
which should characterize this type of strategy. It greater part of technological knowledge is speciﬁc
is remarkable how this cycle, especially the creation and although this knowledge and abilities can
of knowledge, is closely related to innovation. The be bought from the exterior, there must be an
creation of new knowledge and of innovations assimilation capability in place for it. Finally, it is
implies the application of intelligence, tacit highly differentiating, since it is possible to apply
knowledge and information: that is, an interaction speciﬁc technological abilities from one ﬁeld in
between actions and behaviors. The action of another.
A Knowledge Management Strategy Oriented to Innovation 163
CASE STUDY Knowledge and Process Management
All these characteristics make clear that the inno- Table 1. Some ﬁgures for Irizar
vation process in a ﬁrm will be a very wide-ranging
one, involving the obtaining of knowledge from the Number of workers (91–00) 225 634
existing organization, the combining of informa-
Sales (91–99) $15 million $103 million
tion, data or previous experience and the genera-
Sales per person (91–99) $55,000 $165,000
tion of new uses for the resources (Nonaka and Added value per $14,000 $61,500
Takeuchi, 1995). For Krogh (1998: 134) it is essential person (91–99)
that this process be developed in work teams Maturity time (91–99) 38 days 14 days
which have clear objectives in relation to the pro- Production rate (93–00) 1.2 coaches/ 6 coaches/
ducts and processes; in this way, they can contri-
bute innovations to the ﬁrm as a whole.
The following section is devoted to the analysis
of the case study used in this work. It describes the Within its sector, it ranks ﬁrst in Spain and third
way in which the implementation of a KM strategy in Europe.2 Sales of luxury coaches in the European
can be used as a means to generate a ﬂow of strate- market are around 10,000 units/year, but only
gic innovations, so giving a source of competitive seven companies sell more than 600 units/year.
advantage. Furthermore, the sector is strongly concentrated
The study is structured in the following way. as a result of agreements between the bodywork
After presenting the ﬁrm itself, a description is and chassis makers for both coaches and trucks
given of the mission and values taken as a starting (Mercedes, Volvo and Scania).
point for the strategy established. The implementa- Irizar can be considered as an innovator in pro-
tion process for the strategy is then described, ducts, processes and in general management,
together with the work organization changes which where it is successful in its ﬁeld. For the Economist
this assumed. The results of the case study are Intelligence Unit, Irizar is ‘probably now the most
articulated as a series of key factors. Finally, the efﬁcient coach builder in the world’ (EIU, 2000:
study closes with a discussion of the main conclu- 172). These facts justify the study of the KM strat-
sions reached. egy implementation process and the factors which
have made it successful.
CASE STUDY Strategic change at Irizar: the organization’s
mission and values
The company analyzed in this study is Irizar, an
associated work co-operative belonging to Spain’s The KM strategy implementation began at Irizar in
Mondragon Co-operative Corporation (the MCC). 1991, a moment in which the ﬁrm was in a critical
The MCC can be considered as the world leader situation, having accumulated major losses almost
in co-operative working. It is made up of more to the point of bankruptcy. Given the situation, the
than 100 co-operatives of associated businesses new management decided, with the support of all
and employs over 42,000 workers.1 the workers, to carry out an emergency plan. This
Irizar is a ﬁrm devoted to the assembly of luxury involved changing the strategy of the ﬁrm, diversi-
coaches. It has seen spectacular growth over the fying markets in order to succeed in a global market
last few years (see Table 1); especially noteworthy and focusing only on the assembly of luxury coaches
has been its growth in average productivity of (they had previously produced urban buses also).
18.4% in the 1993–2000 period. The ﬁrm currently The implementation process was supported
has 634 workers in its Ormaiztegui factory (in the through a global change focused on the building
Spanish Basque country). It exports to 45 countries of a strong culture, in which all the members of
and has shareholdings in ﬁve other companies: the organization were to be involved—this led to
Irizar Tianjin (35%); Irizar Maghreb (34%); Irizar the deﬁnition of the process as ‘a project based on
Brasil (100%); Irizar Mexico (100%) and Interna- people’. The ﬁrm’s management tried to encourage
tional Hispacold (65%). It assembles six coaches the acceptance throughout the organization of
every day and has a 33% share in the Spanish mar- some cultural principles—these have been rein-
ket with a further ten companies sharing the rest. forced over time (Figure 1).
It should be underlined that the company has received prizes
MCC ranks at number 185 in the list of European companies by and awards such as that of being the ﬁrst European company
business ﬁgures, and it is sixth in the ranking of Spanish-capital in its sector to obtain ISO 9001 Business Quality Certiﬁcation,
companies within the European context. or the Coach of the Year Award for 1994 in the UK.
164 F J. Forcadell and F Guadamillas
Knowledge and Process Management CASE STUDY
Figure 1 Mission and values in Irizar
Following the principles above, the stategy The process of implementation of the KM
adopted by the ﬁrm was supported in three areas: strategy
customer focus, shared leadership, and the adop-
Establishing Irizar’s KM strategy involved an
tion of a radical change model.
evolution, through a series of phases which were
First, Irizar’s strategy was oriented towards ‘To
aimed at the continuous generation of innovation.
know, serve and add value for the customer’. For
The process started in 1991:
adaptation to the customer’s requirements, the
key questions are: quality, service, cost, innovation, (1) 1991–1992: Dissemination of the ideas for change.
security and shared experience. Therefore several A distribution of the ideas contained in the
long-term agreements have been set up with custo- ﬁrm’s mission and values was carried out, with
mers and suppliers, permitting improvements in the participation of all workers. This mainly
knowledge of the environment, markets and involved the attempt to transmit to the whole
customers. The second fundamental aspect in the organization the importance of knowledge as a
Irizar strategy was that of shared leadership. The strategic resource and the development of
idea that ‘the best organizations do not depend innovation.
on great leaders’ is strongly accepted in the culture (2) 1993–1994: Establishing the ﬁrm’s strategic posi-
of the organization. This has encouraged a shared tioning. Once the ideas had been disseminated, a
leadership (participated objectives and ﬂuid start was made on applying systems for the
communication). storage and sharing of experience and knowl-
All workers are encouraged to direct and co- edge, with the active participation of the
ordinate, on a temporary basis, some part of the majority of the workers. The company set the
work team, so taking on a certain leadership of strategic objective of doubling production
the enterprise. The Assembly system used by the volume to two coaches per day. To do this, an
business to take decisions means that all workers internationalization strategy was adopted with
participate and assume responsibility for shared the aim of expanding sales in countries such as
objectives. This is a consequence of the legal format Germany, France and the UK. This phase saw
of the associated work co-operative. the obtaining of speciﬁc improvements in
A Knowledge Management Strategy Oriented to Innovation 165
CASE STUDY Knowledge and Process Management
quality and productivity, considered to be basic The company’s work in this period was recog-
requirements of competitiveness. The effort nized by the winning of numerous prizes and
made to obtain ISO 9001 quality certiﬁcation awards, including ISO 14001 certiﬁcation for the
should be emphasized; Irizar was the ﬁrst Environmental Management system and the maxi-
European luxury coachmaker to obtain this mum EFQM qualiﬁcation, among others.
qualiﬁcation. To reach the levels proposed by the model, dif-
(3) 1994–1997: Radical changes in the organization. A ferent systems, practices and tools were used,
‘strategic reﬂection period’ took place in this related to the strategy and core features and sur-
year, which gave rise to the introduction of a re- rounding conditions of the ﬁrm. One of the most
engineering model. The model involved a important of these was organization of the work
redesign of processes, and changes to the into teams.
vertical and horiziontal organization charts: all
work was to be organized in multi-disciplinary
teams, with wide autonomy and limited
Changes in work organization:
supervision. The work teams periodically set
objectives relating to productivity, quality,
compliance with customer deadlines and other In order to carry out its proposed strategy, Irizar
operative improvements. The strategy has introduced major changes to its work organization,
made it possible to achieve compatability in line with a model for ‘re-engineering based in
between incremental changes and radical multidisciplinary and self-management teams’.
improvements in a re-engineering model. This organization of work has been essential in
KM and innovation came to form part of the the evolution of the ﬁrm. The work teams are
company’s strategic objectives. Use of knowl- understood as systems for the creation and distri-
edge storage and distribution systems (such bution of explicit and tacit knowledge, and their
as databases) was generalized and major functions are closely related to different stages of
improvements were obtained at the opera- KM.
tional level, together with signiﬁcant increases The organizational structure of Irizar is built
in all the sales, proﬁtability and efﬁciency around a group of working teams. A static chart is
indicators. This has continued since then. ﬁrst set up, built around a group of teams with spe-
From 1995, Irizar adopted the EFQM ciﬁc tasks which remain the same for a long time, in
(European Fundation for Quality Manage- which all the workers are included. This coexists
ment) Model for Excellence, based on partici- with a dynamic chart, which includes another group
pation, innovation and learning. This serves as of teams devoted to support jobs for the strategic
a model for the detection of improvement objectives; their working method is much more
opportunities via overall external evaluations agile, to adapt to the improvement needs required
and detailed self-evaluation. The efforts made in any given situation. In addition, the work is
at the company over this period have been divided into processes, including a core self-
recognized by the receipt of a number of management process in which more than 90% of
national and international awards. workers take part, together with customers and
(4) 1998–2000: Expansion of Irizar and recognition of suppliers. Everybody is involved in different work-
itys work. Starting in 1998, Irizar created a ing teams which have relations with their sur-
business group, comprising Irizar S. Coop, with rounding entities and which manage the whole
its headquarters in Spain, Irizar Tianjin (China), process, from receipt of a customer order to the
Irizar Magreb (Morocco), Irizar Brazil and Irizar delivery of the vehicle. All are inter-related. The
Mexico, with a shareholding in International work teams which have been created and active
Hispacold, all to be able to service the growing from 1994 are shown in Figure 2.
demand in these markets. The people working in the teams have more gen-
At the same time, a systematic application of eralized skills, are less specialist and enjoy wide
KM was put in place to establish a continuous autonomy and development possibilities in their
improvement process and ensure results in the work. The work teams have been one of the main
creation phases and application of the new tools through which the company has achieved
knowledge. The achievements obtained were continuous, intensive co-operation between differ-
major, radical improvements, the development ent professionals, with very different knowledge,
of innovations and the creation of new knowl- that characterizes the process of technological inno-
edge. The company has been in this position vation and the creation, accumulation and trans-
since 1994. mission of knowledge.
166 F J. Forcadell and F Guadamillas
Knowledge and Process Management CASE STUDY
Figure 2 Irizar chart
Figure 3 Organizational success factors in the implementation of KM
A Knowledge Management Strategy Oriented to Innovation 167
CASE STUDY Knowledge and Process Management
SUCCESS FACTORS IN THE STRATEGY’S variety of jobs taken on, the high degree of
IMPLEMENTATION autonomy in work, and participation in the
suggestion system. All of these reinforce people’s
The analysis of the case in question allows pointing motivation and deﬁne a leadership style.
out a group of organizational factors that can be * People participation in the creation and application of
considered essential in the success of the imple- new knowledge. More than 90% of the workers
mentation process of this strategy. The factors participate voluntarily in working teams. Every-
found in the case analysis can be ﬁtted to the classic body is expected and encouraged to make at least
7-S McKinsey model (Waterman, 1982) (Figure 3), two improvement suggestions per year (more
the scheme used to represent the principal aspects than 1260 ideas per year in total).
on which a succesful strategic implementation * Shared learning (to encourage knowledge transmis-
depends. The model suggests that there are a set sion). More than 10% of the time is devoted to
of factors which inﬂuence strategic change in a learning in teams.
company, and that these should be interconnected
and be internally coherent. In this case, a KM strat-
egy is involved, focused on the building of a series
of capabilities related to innovation. Corporate cul- The systems and tools used to foster creation and
ture is the core factor, although it must ﬁt with transmission of knowledge (shared experiences)
organizational structure, management of human are the following: information and communication,
resources, leadership style and KM systems and external relations, education and training, working
tools. teams and committees and the assembly system
for decisions. All of these are based on participa-
tion in the process. Although the new information
The knowledge management strategy
technologies are applied in a similar way to that
developed at Irizar
used by the ﬁrm’s competitors, this does not
At Irizar, it is understood that the objective of KM is seem to be an essential factor for success in KM
the promotion of innovation and the capacity of the in this case.
organization to transform the opportunities which Another important aspect is the use of KM
appear into results, in a more efﬁcient way than its results measurement tools, which at Irizar are
competitors. The process of creation, storage, distri- not limited to the quantitative aspects but which
bution and application of new knowledge has been also advance and deﬁne other measures related to
systematized in Irizar through working teams, sup- strategic objectives (people’s overall satisfaction,
ported by values like trust and tolerance to mistakes. participation, shared learning and shared leader-
The learning through ‘shared experiences’ is impor- ship). These permit the establishing of a monitoring
tant, but the key question is knowledge creation and control on the organization’s strategic objectives.
innovation. Other questions such as productivity
and quality are simply the initial conditions
The development of innovative capabilities
required to compete. Another key question, in rela-
tion to strategic targets, is knowledge of the environ-
ment through long-term agreements with customers The concept of innovation is understood at Irizar as
and suppliers. ‘the introduction of new ideas or methods to the
The most important achievements reached in way in which something is made or done’. The
relation with KM as an innovation strategy at Irizar relation between innovation and KM can be sum-
are the following: marized in a few words: ‘Innovation as a goal
and KM as a method.’ This is supported by a series
* Overall personnel satisfaction. Measured by a
satisfaction at work questionnaire, which has of cultural values:
given very satisfactory results.3 This is mainly
* Shared vision: dreams, ideals, commitment,
explained by the active participation of the
belonging to the project, work in teams, mission
workers in the decision-making process, the
* Knowledge ﬂows from shared experience, and
All workers complete this questionnaire at regular intervals, innovation from knowledge.
surveying them on aspects relating to their level of satisfaction * Irizar is a project focused on innovation and
with their work. The results are valued on a Likert scale of 1 knowledge creation.
to 7 for the different items. Over the last few years, the average
satisfaction index—calculated as the average of the values given * It is essential to encourage shared learning in self-
to each question—has been higher than 4 points from 7. management teams.
168 F J. Forcadell and F Guadamillas
Knowledge and Process Management CASE STUDY
* Autonomy for taking decisions and tolerance of Given the special nature of the working organi-
the mistakes which application of new knowl- zation, the recruitment process is carried out in a
edge involves. particularly careful way. The time taken for a
new person entering the ﬁrm to become a member
is around three years. In this period, the new work-
er passes through various stages called ‘profesio-
At Irizar, a functional structure was replaced by an gramas’, during which he or she is evaluated in
organization based around processes, in which the terms of various parameters referring to the work,
work teams are a key part. Two key factors are such as activity, quality, initiative, motivation,
found: reduction in the number of hierarchy levels ideas contribution, team working, availability and
and organization of the work into teams. Irizar has multiskilling. New recruits who do not ﬁt into the
a very ﬂexible organization, with a very low num- organization (one in ten people) leave within six
ber of levels and an almost ﬂat organization chart. months. However, the number who leave the orga-
There are no intermediate supervisors and all nization once incorporated into it is very small
employees are integrated into work teams. Among (there were none at all in the last year) even
these, the line-customer teams should be empha- when there are strong ﬁnancial incentives to do
sized: these teams manage the greater part of the so. Although salary differentials exist, the workers
production process phases, from supplies to pro- are aware that these are justiﬁed by varying levels
cess engineering. of training. In general terms, the workers consider
This fosters a reduction of differences in salaries themselves to be well paid and this subject does not
in the organization and makes similar the involve- generate conﬂicts.
ment of all workers in reaching strategic objectives. A principle which has been strongly adopted in
There are no time controls at Irizar and supervision the ﬁrm’s culture is that technology is not a differ-
is carried out within the teams in relation to their entiating resource, but people are. The necessary
work (improvements obtained, meeting of time technologies can be purchased externally, but any
limits and so on). Also, some changes have been competitor can also do this. Knowledge, on the
made to the physical workplaces to facilitate other hand, is a unique resource. In the words of
knowledge transmission and communication. the manager, ‘ . . . When people have greater shared
experience, they create more knowledge. Resources
run out, people don’t.’
A key principle for the company’s success,
assumed in its culture, is the importance of people
and their participation to achieve the proposed The role of strategic leadership is essential for suc-
strategic objectives. This principle is strongly inﬂu- cess. At Irizar, leaders promote the initial process,
enced by the culture of the corporation to which the support ideas for improvement and give support
ﬁrm belongs (the MCC), which encourages partici- and advice to teams. They also advance the process
pation as a strong value. with a more participative leadership. More than
Work teams constitute the system which articu- 20% of the employees have led and co-ordinated
lates participation in the organization, in particular a team at some time.
the line-customer teams. They are an essential tool Participation in the development of strategy is
in explaining the goals reached. In Irizar, all the also high, in accordance with the co-operative prin-
work is organized around work teams, which also ciples of the Corporation. There is a co-ordinator
carry out support jobs related to the execution of for this and a minimum of three Assemblies per
strategic goals, especially the line-customer teams. year, attended by all members, to ﬁx the strategic
The teams are dynamic and have a close relation objectives.
with their surroundings, mainly customers and
suppliers. This structure motivates the workforce
and depends on them. This makes the workers
feel that their participation is important and that As described above, participation and trust are key
they are involved in the company. Work teams values in the ﬁrm. The Assembly system for taking
have contributed to the creation of a shared view decisions encourages participation in establishing
of the ﬁrm’s problems and to a simple transmission goals and strategies for the ﬁrm. In addition,
of knowledge. Because of their importance, the par- people’s active participation in knowledge creation
ticipation of worker is massive, although there is no and transmission in working teams is an essential
special reward. cultural value. At Irizar, participation is the
A Knowledge Management Strategy Oriented to Innovation 169
CASE STUDY Knowledge and Process Management
fundamental task of the normal work: 90% of per- * Implementation of a KM strategy is developed
sonnel are involved and every aspect related to through several phases. The process starts with
structure and operative management is included. dissemination of the ideas to all of the organiza-
All this is encouraged with a very open vision of tion and is followed by KM implementation. This
work and a certain tolerance of mistakes. allows achievement of competitiveness in terms
One of the main factors explaining the culture of cost reduction, quality, productivity and other
of the ﬁrm is its belonging to the MCC, which is operational improvements. In the next stage,
composed of a set of co-operatives that have incremental improvements are carried out simul-
come together voluntarily (Forcadell, 2000). This taneously with other, more radical, changes and
fact determines the way in which decisions KM is developed in order to achieve autonomous
are made, being a democratic way of delegation. and continuous innovation.
The co-operative philosophy aims to overcome * There is no single best way to implant KM. It
the capital–worker confrontation, ensuring that the depends on the speciﬁc conditions surrounding a
people involved are co-owners and therefore co- ﬁrm and the strategic vision of its leaders.
participants in the company’s decisions and in its * In the case studied, the implementation of a KM
results. The MCC’s mission was established in the strategy was supported on a model of overall
Basic Principles of the Mondragon Co-operative Experi- change, based on people participation, customer
ence. These principles, based on co-operation, bring focus and shared leadership.
together a series of beliefs: free access, democratic * Knowledge creation, storage, distribution and
organization, the sovereignty of the work, an application was supported by some organiza-
instrumental and subordinate role for capital, tional changes that the company developed
participation in management, retributive solidarity, itself, especially in relation to work in teams,
interco-operation, social transformation, universal the application of knowledge-transmission tools,
character, education. The mission and corporate shared leadership, encouragement of innovative
values summarize the corporation and the culture capacity and the assumption of cultural values
of all the ﬁrms belonging to it: customer satis- by people.
faction, people as the business’s principal asset, * Organization of the work into multidisciplinary,
optimization of products and services, co- self-managed teams helps the creation of new
operation, continuous improvement and social knowledge and its transmission within the
* In relation to corporate culture, trust, participa-
tion, enthusiastic and participate leadership are
CONCLUSIONS forces for development which explain the goals
reached. The analysis shows how the results of
This analysis of one ﬁrm that can be considered as KM and innovation in the ﬁrm are rooted in the
an innovator in management, and that has success- degree of depth to which these values have been
fully developed an innovative strategy based on assumed by the people in the organization.
KM, makes it possible to extract some success fac- * Successful implementation of this KM strategy
tors for the implementation of a KM-based innova- depended on ﬂexing the structure, designing an
tion strategy. The fact that it is possible to do this almost ﬂat organization chart and eliminating
on the basis of the classic 7-S McKinsey scheme the traditional control and supervision systems
suggests that these success factors are valid for (these functions were taken over by the team
any type of strategy. It is possible that the quality members).
of the strategy established in a ﬁrm can be mea- * The main achievements of the strategy are the
sured via these same factors, even if the individual high level of worker satisfaction and the creation/
case is a strategy for which new tools are used. transmission of knowledge. KM was the method
The analysis revealed that one of the essential which made possible the essential strategic goal
organizational factors, because of its inﬂuence on of developing continuous innovation.
others, is corporate culture. The most important
conclusions emerging from the analysis are the fol- For conclude, it is possible to articulate the key
lowing: success factors here identiﬁed in terms of the 7-S
McKinsey model. This suggests that these factors
* KM can be used by a ﬁrm as a method to develop may be valid for any type of strategy. It is possible
a process of continuous innovation with the that the quality of the strategy introduced can be
participation of all the members of the organiza- measured using these same factors, even where
tion. the strategy itself has used different tools.
170 F J. Forcadell and F Guadamillas
Knowledge and Process Management CASE STUDY
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A Knowledge Management Strategy Oriented to Innovation 171
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