Assignment 2

Theories of Management Assignment

“Discuss with reference to appropriate literature sources, the extent to which the
creation, sharing and utilization of knowledge is central to this resource-based view of
competitive advantage.”

According to Dasgupta and Gupta “The increasing turbulence in the external business
environment has focused attention on the resources and organizational capabilities as
the principal source of competitive advantage.” (2009, p.204).

R1808D5989251
UU-MBA712 Theories of Management
Tanusree Sengupta

11th January, 2019.

According to Dasgupta and Gupta (2009), in a world where globalization, market
segmentation and the needs of the community are constantly changing, it is important
that organizations focus their capabilities on improving their competitive advantage.

Organizations might find it very difficult to survive without proper plans for
sustainability development through modern-day innovation (Antonie Botha, 2008).
Globalization and market segmentation have increased the need to translate innovation
into organizations and exploit the integration of diversity and heterogeneity in
companies.

Organizations need to learn how it grows to gain a competitive edge over other
organizations in its sector or industry. Organizations must create an enabling
environment in which members of staffs are encouraged to be creative in their service
delivery and also be courageous in implementing them (Frączek, Bačová, Hintošová, &
Siviček, 2017). They are encouraged to develop new ideas, technologies and practices;
evaluate their own performance and commit to continuously improving their
performance. An organization's knowledge management strategy should foster
innovation, share ideas, use healthy communication methods and understand how
important it is to understand the needs of the customer and the external /
environmental impact that affects productivity. Organizations must understand the
changes in the environment and how they affect the internal structure, culture, and
knowledge of their organization. Modern days organization are meant to understand
how “PESTLE-N” analysis affect their structure and how to always balance their
“SWOT“ analysis in a growing economy.

The PESTLE is a tactical structure for understanding external influences on a business

(Processpolicy, 2018). PESTLE mean "Political, Economic, Social, Technological, Legal
and Environmental, the “N” stands for Nature" all these factors are used for business
and organizational strategic planning and development. It is also advisable that modern
day organizations are to identify their Strength, Weaknesses, Opportunities and Threats
(SWOT) for organizational development. It is a technique used in identifying
organizational strengths and weaknesses as against the opportunities and threats
identified in the external environment. When proper plans and strategy are effectively
implemented using the SWOT hypothesis, organizational success is inevitable.

Global competition has made it crucial for organizations to have cultures and structures
that support sustainable growth and development. I presently work as an Information
Technology (IT) Support Officer with the Lagos Metropolitan Area Transport Authority
(LAMATA), a World Bank assisted Agency of the Lagos State Government, where
organizational structure is highly embraced and enforced for rapid development in all
aspect of transportation within the Lagos Metropolis (LAMATA, Lamata, 2019). When
LAMATA came on board to transform the face of public transportation in Lagos state,
they were charged to integrate with the old public transport structure and find a way
of reengineering the whole structure (LAMATA, Lamata, 2019), it was discovered that
the level of illiteracy among the unions they are meant to share knowledge with for
rapid transformation of the state is quite tasking, so, they have to ensure that the unions
have to unlearn old knowledge systems, learn new knowledge systems, and also
integrate old and new knowledge by sharing information, to introduce new services
and products, and to develop new business models relating to smooth transportation
across the state.

The ability of an organization to change determines its ability to innovate through the
strategic use of human resources as knowledge resources, which can provide the
organization with a lucrative advantage. For knowledge management to be effective
and efficient, managers must integrate innovation practices and knowledge
management practices to harness knowledge for innovation. Knowledge management
and Human Resources Management (HRM) practices are essential for the repeated
teaching of knowledge-sharing environments in organizations. Both implicit and explicit
knowledge must be managed to foster organizational learning, which in turn enhances
experimentation within the organization and stimulates the innovation process, thus
enhancing the organization's competitiveness. To enhance the organizational
knowledge and human resource management alongside their innovation capability, the
organizational environment must be independent of its success or failure and must
provide more lessons in which the organization can innovate on a regular basis.
According to LAMATA (LAMATA, Knowledge Sharing Policy and Guidelines, 2014), we
aimed to become a foremost knowledge-sharing organization in the domestic and
international transport sectors and In order to realize this vision, they aim to achieve
some major knowledge sharing goals. These goals are supported by concrete
organization-wide policies with detailed implementation guidelines on procedures and
practices. LAMATA believes that each individual and the organizational unit must have
a clear understanding of the roles and responsibilities assigned for capturing, storing and
sharing knowledge. In the creation of knowledge, according to Gupta and Dasgupta
(2009), is the generation of new knowledge in a collaborative environment.

Knowledge is defined as the market, products, mistakes, achievements, processes, tools,

and approaches required to apply what the organization knows about achieving its
strategic goals (Dasgupta & Gupta, 2009). The creation of knowledge depends on
internal and external factors that can be learning activities. Creating knowledge requires
a dynamic organizational capacity to deal with the turbulent environment in which the
company operates. Capacities help customization and resilience to gain a competitive
advantage. Porter’s generic strategy states that “It is a way of gaining competitive
advantage – in other words, developing the "edge" that gets you the sale and takes it
away from your competitors” (MindToolsContentTeam, 2019),

According to Kurtz and Varvakis (2016), a capacity approach to how an organization

operates should identify how much competitive advantage can be maintained in rapidly
changing contexts. It is important to consider the company's resources and capabilities
in adapting to a changing environment, as turbulence, difficulties and instability
stemming from the external environment may affect the company's growth potential
and survival. An organization Creating knowledge thus creates an internal environment
that enhances the ability of the organization to recover, thereby facilitating the
adaptation of the organization to changes outside the organization. This is the first step
in developing dynamic skills and resilience for businesses, especially small and medium-
sized enterprises.
In addition, Nonaka suggests that organizational knowledge arises through the
involvement of the dialogue between implicit knowledge and explicit knowledge. The
knowledge must be managed and this determines how it was created. Implicit
knowledge management involves the management of a variety of factors that
contribute to the structure, culture, leadership and technology of a company. The
creation of new knowledge stimulates innovation. Innovation in a turbulent
environment creates competitive advantages. For a company to develop new products
and services and/or improve existing ones, organizational learning must be combined
with knowledge management to prepare better for the subsequent turbulence in the
environment. The successful introduction of something new and useful is crucial for
business development, as it is a survival tool in a hostile market. The creation of
knowledge is a learning process for organizations and should focus on how the
company interacts with the environment to achieve competitiveness by identifying
relevant information and generating new knowledge from it. The structure, leadership,
technology and culture of an organization must promote the strategic and efficient use
of corporate resources so that it is capable of managing human resources to capture the
implicit knowledge and innovate to obtain a competitive advantage. The use of
information technology has improved the exchange of knowledge with improvements
in communication. Knowledge management tools for the exchange of information are
hardware, software and databases, collaboration tools and smart tools.

Information sharing creates competitive advantages that do not affect profit margins,
and most institutions have focused on technologies to increase competitiveness, such as
increased online shopping, online advertising, and free Do it yourself (DIY) software
applications. The internal environment of a company must lead the promotion of
creativity, innovation, diversity and heterogeneity, allowing employees to discover and
define problems and solutions. Leadership must perform challenging tasks, support
subordinates and recognize incentive efforts as a culture to stimulate the exchange of
implicit knowledge, as this is essential for successful teamwork. Knowledge management
entails identifying, investing and cataloguing all institutional knowledge which will
eventually assist in knowing who holds what expertise within the organization, it will
also help in accelerating the speed of locating relevant expertise and promote greater
efficiency by reducing the need to reinvent the wheel. For multinational cooperation,
it is important that they use their knowledge effectively and efficiently. They should
facilitate the exchange of knowledge to maximize the value of all available knowledge
resources. Multinational companies use knowledge management systems to share
knowledge and use it to support decision making. Knowledge is one of the most
important economic resources of multinational cooperation. To succeed globally in a
heterogeneous and politically correct world, they need to identify, evaluate, create,
develop and share knowledge on a regular basis. Therefore, initiating the process that
facilitates the collection, coding and exchange of knowledge in organizations, hence,
leading to a well-informed decision-making process. According to Brix (2017),
organizational learning cannot be separated from knowledge management and
innovation, since both must be motivated by external turbulence. It is advisable to
always respect the organizational environment when seeking for institutional
development. In today's dynamic world, multinationals face the challenge of evolving
from the billions invested in projects, such as insufficient network backbone to carry
call traffic by the telecommunication companies in Nigeria, as well as regular power
outage challenges.

However, internal innovation does not guarantee a competitive advantage in rigid

environments where adaptability to change is not guaranteed. Environments can be
deeply rooted in a particular culture and changes are not easily accepted. Therefore,
environments must determine organizational innovation. Effective, efficient and explicit
knowledge management promotes the creation of new lessons, innovations and
lessons. According to Gupta and Dasgupta, the process of a learning organization
transforms valuable ideas into valuable new ways of creating value. Learning is crucial
in uncertain technological and market situations and helps overcome socio-economic
challenges. Organizations must adapt to change and work together to build a unique
competitive advantage. LAMATA as a political organization has over the years built a
sustainability culture that is able to stand and also integrate with any administration.
They have been able to cooperate with so many stakeholders in ensuring that they
stand the test of time, while doing these, they leverage on peoples knowledge to
engineer new idea and also plan towards implementing those ideas for the benefit of
the society at large.

The use of knowledge can risk losing the profit margins of any organization. However,
organizations must be able to accept, correct and learn from mistakes as a learning
process. Common values, beliefs, routine behaviour, human capital, strategies and
motivation of employees. Organizations should always create a platform whereby
employees are given the liberty to freely integrate with the hierarchy of reports and
processes, the procedures and the relationships must be customizable and flexible.
Companies must look outside to change if the structure of the company is formal,
central or autonomous.

The use of knowledge may require an organization to change its technology, culture
and structure. External turbulence, such as market segmentation, the shortened product
life cycle and the changing needs of consumers or customers over the years, has created
an internal environment within companies that focuses on resources and capabilities to
obtain a competitive advantage. Organizational structure and standard is the result of
effective, efficient and appropriate use of knowledge. As organizations reduce costs in
the production process to increase profit margins through good communication and
the appropriate use of knowledge, organizations can gain a competitive advantage.
The challenge for most organizations is to reduce costs and continue to obtain healthy
benefits. External factors, such as instability, determine what knowledge is acquired,
shared and used in organizational terms and, ultimately, is used. The use of knowledge
creates space for innovation and organizational change. The challenges facing a
multicultural and rapidly changing environments in which businesses operate in the 21st
century are key to determining how and why they focus on the resources and
capabilities to gain a competitive advantage. It is also a means to survive and benefit
organizations, an organization that works values their employees will always create a
conducive environment for them which eventually improve productivity. For example,
Glo Nigeria, the only indigenous telecommunications service provider in Nigeria, has
survived because it promotes technological progress and social responsibility, while
meeting the demands of the environment in which people craved for such as, the
introduction of different bonanza packages for the customers across the nation which
is just a fraction of their promise to their stakeholders (TheCapital, 2017). Majority of
their services shows that, they always find ways of communicating with their customers
and stakeholder.

Organizational strength is a competitive need since organizations must make basic

predictions on market trends. Technology is a key component of organizational
strength and flexibility. Technology is expected to act as a critical facilitator of changes
in the use and acquisition of knowledge so that companies can use it as a critical data
gathering tool. In most cases internal bureaucracy is a critical factor for organizational
change, it is advisable to ensure that there is a general buying from the inception of the
change process. The most common barriers to business responsiveness are slow decision
making, conflicting goals and priorities of departments and cultures that are adverse to
risk. The needs of meeting the needs of customers across the globe are no longer static:
over the years, static or monopolized companies are no longer the most profitable. In
today's globalized free market environment, the ability to meet customer expectations
is a key factor in profitability. Current customer requirements change rapidly and are
unpredictable. Swiftness in business is to always look for new or alternative funding
sources which will be adopted in different forms for different functions, depending on
the organizational structure, culture, environmental culture and market trends.

The evolvement of modern day’s business structure requires companies to refine their
organizational processes and invest in a more effective use of institutional and external
knowledge. (Albena Antonova, 2006).

An organization where the exchange of knowledge takes place gives the organization
the opportunity to take advantage of the institutional knowledge and gain a
competitive advantage. Values and attitudes in a company determine how to exchange
implicit knowledge for use in a turbulent environment. The use of knowledge creates
an atmosphere in which new knowledge is created, particularly in relation to existing
knowledge and innovations. However, environmental turmoil can focus on resources
and organizational skills to gain a competitive advantage. Some companies focus on
being leaders in the innovation process and creating a need in the environment that
only they can satisfy.

In the case of LAMATA, we took a more systematic, results-oriented approach to plan

and implement knowledge-sharing activities, both within our organization and with
external audiences. We also strived to create dedicated opportunities for knowledge
sharing and aim to excel in using a variety of tools and activities to facilitate learning,
we also seek to maximize the value we are able to retrieve from facilitating exchange
visits, raising the profile of LAMATA and increasing the influence of our expertise both
within and outside the organization (LAMATA, Knowledge Sharing Policy and
Guidelines, 2014).

Some organization might decide not to share knowledge across board base on the
sensitivity of the information, but that does not mean that knowledge sharing should
be monopolised in an environment that is craving for innovation and creativity.
Although focusing on resources and organizational skills as principles to increase
competitive value does not always reflect external factors. Sometimes, companies try
to innovate in the hope of changing the external factors of profitability by introducing
a new and improved method of service delivery. LAMATA as an organization has
always strived to continuously improve the way we go about our knowledge sharing
operations by monitoring and evaluating our processes. We therefore, implement a
number of standardized processes to help us get feedback on how we can always share
and learn just to improve our level of productivity at all time. We believe that is at our
own advantage to evaluate the effectiveness of knowledge products and sharing
activities so that we can incorporate lessons learned to further enhance value. We
ensure that the results framework that integrates knowledge sharing indicators and
permits the systematic measurement of impact and the design of follow-up activities are
implemented adequately.

Finally, companies must identify the cultural structure that can improve their
profitability, competitiveness and productivity. In recent time, most organization have
been looking outward to gain a competitive advantage. The unstable and unpredictable
turbulent market and the environment in which organizations operate cannot be
ignored. Companies must focus on the external environment if they want to grow. In
this time and age organizations are expected to innovative and competitive enough in
order to remain relevant in the market space. They are expected to be implementing
policies that will promote the vision and mission statement of the organization.
Organizations are expected to leverage on the evolving Technologies to improve their
social media presence both online and offline. It is also important to note that the
external competition to which most organizations are exposed is the motive to reduce
production costs in order to sell at lower prices and attract customers. Modern day’s
organizations have to ensure that they focus on resources and capabilities since they
will be depending to a large extent on knowledge as the most important asset that will
be giving them a competitive advantage. In addition, the knowledge sharing process
must be managed through an interactive session that can foster rapid data gathering,
where the member of staffs will be encouraged to openly share their lessons learned
within the organization. A special knowledge sharing task could be added to the job
descriptions of all employee, mandating them to actively contribute to the
organizational knowledge pool which will foster operational effectiveness. In order to
institutionalise knowledge sharing in an organization, it is expected that organizational
structure must support knowledge sharing at all levels. Each individual and the
organizational unit must have a clear understanding of the roles and responsibilities
assigned for capturing, storing and sharing knowledge. This means that the external
environment must be respected to ensure that organizational culture and resources can
adapt to external advancement and incentives for the competitive advantage of the
organization. A knowledge-driven change management process will need to be
spearheaded by senior management who are expected to drive the planning and
implementation.
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