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Knowledge management has appeared as a mechanism to confirm the growth and business sustenance of companies. It portrays a necessary program for a firm to retain a competitive edge. It is the successful sharing of information across a company. It is all about preserving, interpreting, encrypting, and communicating relevant data. This report assesses how well knowledge management is relevant to increasing the success of a multinational company that sets its corporate universities. The main objective of this report is to discuss the notion of knowledge management, the purposes for the setup of corporate universities in Shell and General Electric, the profits, and further recommendation.
Table of Contents
The history of knowledge management
Role of corporate universities in multinational companies.
In the century of knowledge and age of electronic development, advanced knowledge, and constant learning are very important to both individuals and the company. Knowledge management offers a creative approach for developing and changing the development and exchange of information and typically involves a set of best practices for learning, reuse, and understanding (Halawi et al. 2017). The productive success of multinational corporations (MNCs) significantly relies on the potential to incorporate relevant information and develop an innovative understanding with the help of a corporate university. It has inspired the requirement for a detailed and accurate explanation of how knowledge is integrated within MNCs.
Clinton, Merritt, and Murray (2009) propose that every company needs to support its staff with the opportunity to "constantly rebuild their strengths and knowledge" and to develop them beyond on-the-job training, which is essentially assumed feasible through a corporate university system. A corporate university helps the company to accomplish its target. Several analyses have addressed the advantages of training and skills development by a corporate university system. As per Clinton, Merritt, and Murray (2009), a corporate university contributes to enhanced budget benefits, better execution of company strategy, and value proposition. A corporate university supports staff members in developing and executing active sales and promotional techniques to bring importance to the company and enhance profits. Noe (2016) confirms that corporate universities are showing tremendous knowledge sharing service, consumer satisfaction, productivity enhancement, a decline in expenses, and revenues in multinational companies. In general, the purpose of the corporate university is to allow the effective transmission of the right knowledge to the correct teams at the best time, in the right structure. The purpose of this report is to determine how knowledge management can be applied and how beneficial it can be for multinational companies like Shell and General Electric.
The report is focusing on different aspects: literature review related to knowledge management, the role of corporate universities in multinational companies along with two examples, and the concept of knowledge management in both the companies. Finally, it concludes the paper and provides further recommendations on whether corporate universities are a worthwhile investment for multinational companies or not.
Multinational companies’ (MNCs) ultimate goal is to leverage knowledge to achieve comparative advantage (Tubigi and Alshawi 2015). Knowledge has been identified as one of the most valuable and extremely valued properties (Hegazy and Ghorab 2015). It includes data that is available and can be employed to create decisions and activities (Chang and Lin 2015). Anand and Walsh (2016) acknowledged that knowledge comprises of data, experience, and competencies. However, Ansari et al. (2012) concluded that knowledge without appropriate management can be redundant and worthless. Therefore, companies need to incorporate and introduce a set of procedures for knowledge management (OuYang 2015).
Various researchers have described the knowledge management in many contexts. Gao and Bernard (2018) described knowledge management as the established mechanism or activity of establishing the potential within an MNC to build, collect, analyze and network, preserve and catalogue, manage and distribute the understanding of the company. However, Perry and Bernard (2014) defined knowledge management as a method that facilitates a beneficial structure for the detection, collection, review, storage, maintenance, and exchange of all information properties of a company. In support of this, knowledge management can be described as a system of information capture, storage, distribution, and utilization (Chang and Lin 2015). Pawlowski and Bick (2012) argued that the practical interpretation of organizational knowledge is still in the initiation phase. Knowledge management encompasses four essential modules and mechanisms (Turner et al. 2012):
Knowledge Acquisition: It is the practice of getting information developed, related, and bound to current knowledge (Brix 2017).
Knowledge storage: It corresponds to the designing of a shared area where staff can monitor and understand their coworkers' activities (Lim et al. 2017).
Knowledge Dissemination: The companies must verify during this system that the knowledge is transformed from secret information to clear information to avoid the lack of conceptual frameworks (Pirkkalainen and Pawlowski 2013).
Knowledge Application: The person can take benefit of the knowledge that other people hold without having that information (Hegazy and Ghorab 2014).
Moreover, Choe (2011) discussed that the company has two forms of information exchange and knowledge management techniques, called the codification approach and personalization method. The codification technique concerns with acquiring detailed information from the individual who develops it, placing it in archives, making it accessible so that everyone in the company can use it (Kumar and Ganesh 2011). The codification method's main benefit is the reuse of specific information from which a company can conserve income, time, and energy (Greiner, Bohmann and Krcmar 2007). Moreover, the personalization approach relies on mutual information and distribution within the company. It can be attributed to system expansion by which staff can communicate their confidential data (Kumar and Ganesh 2011). Ali and Khan (2017) illustrated the relationship between the personalization approach and the codification approach into a theory of the KM system as shown in figure 1.
As multinational corporations have expanded rapidly during the past decade, by mergers and partnerships, corporate universities have emerged a powerful asset for improving the skills. The word ‘corporate university’ is reciprocally related to the terms like University or Academy or hub of Excellence. It is established as an in-house academic department by a multinational corporation to act as a strategic platform for accomplishing the targets. It emerged as an advancement over conventional training courses in the late 1980s. Multinational companies have designed Corporate Universities as platforms to synchronize their templates of management, community, and corporate standards (Ilie et al. 2014).
The objective of corporate universities has been stretched. It now functions as a forum for executive manager strategic analysis, as well as a framework for coordinating methods across the company. Corporate Universities perform the following two functions: support to certify that multinational corporate strategies can fulfil specific goals through training programs and to pass awareness and ethical guidelines from a multinational to a local framework, and vice versa. It also encourages the progress of essential capabilities of the human strength within the organization, driven by the techniques of the company (Lui and Li 2012).
Two of the most widely used strategies for certified leadership in the strategic observation activities by Spanish and international multinational Corporate Universities are arranging sessions to determine challenges and benefits and managing training and conferences to execute the plan and sustain in the market. The inclusion of seminars and discussions with specialists from other domains or companies, government agencies, and private businesses is another responsibility allocated to some Corporate Universities. Such analysis can allow senior managers to identify the financial, geostrategic, and cultural background in which their businesses work, explore new directions of business, and develop corporate partnerships (Hughes 2006). It can also perform a vital role in developing a partnership among the company's various participants (staff, executives, shareholders, government, distributors, consumers, and the public). A corporate university provides staff with the power to introduce benefit to the knowledge and experiences as well as in revert, the output by creativity, reliability, and productivity to the company. In every company, corporate universities were developed solely to generate skilled staff and build intellectual assets.
It is also noticed that as the corporate university campaign earned attention, the staff has demonstrated more consistency in their performance. They have learned the latest techniques and also obtained certificates and qualifications that would improve their futures. Presently, corporate universities are operating to establish several programs, specifically focusing on business priorities and corporate management.
A study of 210 North American corporate universities was undertaken by Lui Abel and Li (2012). The results of the research show that corporate universities undertake certain practices for its establishment like arrangement and implementation reportedly requires a detailed evaluation of the organization’s staff members' existing knowledge and expertise without which the company could not evaluate their certain capabilities, developing certain knowledge and skills that meet company priorities and enable the company to achieve the comparative benefit, application of relevant technologies to promote functional knowledge, assessment of training and results, encouraging companies to evaluate and track the skill levels of the staff members, and lastly collaboration with the academy.
Moreover, Noe (2016) discusses the top five companies' priorities of the corporate university by enhancing user support and loyalty, increasing performance, lowering costs, attracting skilled workers, and raising profits. Noe also claims that such priorities can only be accomplished by training activities conducted through a university system. It must include a wide variety of projects and modules throughout its training program, and that like successful classroom practice in a conventional university, a corporate university also implements "best training techniques" throughout the multinational company. However, Dutkowsky (2014) highlights that companies need to understand the importance and relevance of their workers and render their training and development more efficient and productive to deliver a good return on investment (ROI).
As a result, staff can improve knowledge and strengths that are unique to identifying business challenges and company objectives such as goal-setting, individual decision-making, strategic technical ability, workload management, teamwork, and communication skills by corporate university concept. These are essential factors for interpreting the company objectives and can therefore have a significant effect on performance, business growth, and efficiency of the employees.
To quote a few instances, one may connect to the corporate university of General Electric, a multinational technology in the United States of America. General Electric is considered to have established the first corporate university. Support Central is the knowledge management (KM) system of General Electric. It is the execution of the former CEO Jack Welsh's strategy of converting the company into an outstanding platform of information (North and Kumta 2018).
At GE, Jack Welch had developed a GE’s corporate university named as Crotonville. It offers a tradition of knowledge sharing, so the transition to the use of KM techniques was seen as a step ahead in the development of the company. It becomes necessary as knowledge is a valuable commodity that the company can efficiently develop, preserve, manage, navigate, and transmit it within the company. Knowledge management is viewed as a required factor, due to the tremendous system of distributed entities that represent the GE Organization. It is not the latest theory for GE.
In the mid-1980s, Welch facilitated integrated diversity, knowledge sharing throughout market segments. His goal for setting up its corporate universities is to integrate its skill sets to improve operational efficiency. The outcome at Crotonville was Support Central, a web platform developed to help for the exchange of information throughout the company. Before developing the Help Center, several critical success variables were described to encourage the company to effectively establish a knowledge management platform such as (North and Kumta 2018):
Support Central is a separate login platform created to provide all staff 24x7 accesses to a wide variety of knowledge repositories and a list of subject matter analysts. It provides exposure to articles, white papers, events, blogs, and discussions. Users can customize the dashboard to meet an individual's necessities. It is enabled by the corporate private system and opens for staff, entrepreneurs, suppliers, and dealers. The outcomes of the deployment of the GE Help Center show a template for knowledge management across a multi-national company (McCarthy and Aronson 2004).
The home page of the GE integrates internal structures with other groups to facilitate an unconstrained sharing of knowledge and thoughts. Several measures are needed to shape a group inside Support Central (McCarthy and Aronson 2004):
The benefits of establishing a corporate university in GE are:
A further instance of Shell corporate university, the American oil company that has standardized the knowledge process can be highlighted (Senge 1996). This company can reasonably be called ‘Learning Company' as it encourages discovering and strives to build a knowledge-mechanism incorporated in its staff. It will offer sufficient skills to meet any kind of difficulty. Such prudence was shown to be far preferable than creating and executing an improvised training program whenever the need arises. Their training is a description of Shell's tagline "Designing while Training," which equips staff with all kinds of ingenuity, tenacity, and the ability to address every kind of transition and randomness in the world oil markets.
The benefits of establishing a corporate university in Shell are (Senge 1996):
This study explores the strategic importance of Corporate Universities based on a literature review of knowledge management and the application of training programs in certain multinationals. It has also been concluded that corporate universities function as a useful aspect of the productive activity of General Electric and Shell. It has also been noticed that CU assistance must be aligned with the company's priorities. It requires to focus on development and training programs to improve the capabilities of new employee and executive teams to facilitate long-term sustainability for the companies. It has also concluded that the implementation of information management and training programs would lead to the growth of General Electric and Shell.
The suggested activity when staff members initially enter a company is to accumulate knowledge about their training. It incorporates short lectures, transcripts, and manuals detailing work priorities and corporate principles (Tannir 2002). Furthermore, a few companies like Apple are assigning new hires to specialized corporate universities (Kodama 2017). These are companies created to deliver on-the-job training for workers. Such a trend has grown in modern times as rivalry increases owing to technological innovations and economic growth. Therefore, with the aid of corporate universities, companies prefer to employ the best skills to ensure that those hires are at the top of the market once they land at the company. It is reasonable to suggest corporate universities from the above studies as a worthwhile investment for multinational companies.
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