Implications Of Knowledge Processes Management Essay
In the human perspective, the tool of knowing can help explain how individuals and groups draw upon the four forms of knowledge and the interplay between knowledge and knowing can generate new knowledge and new ways of knowing. Today, innovation is essential; which depends on developing and accumulating knowledge in wide variety, for technological change. This essay will examine some of the theories between these two perspectives, and define their linkage and implications of knowledge processes and innovation in a case study – B&Q.
B&Q Plc. is one of the major home improvement and garden retailer centres of Kingfisher Group Plc. (largest in Europe) which is the UK’s largest leading DIY and is the third globally. In 1969, the founders Richard Block and David Quayle privately held a company in Southampton, England. Then it changed to be public in 1979 before acquiring a Scottish DIY chain Dodge City by F. W. Woolworth in 1980. Afterwards, he sold it to the current owners Kingfisher Group. As a result, B&Q Plc. contributes 45% total retail sales within the group (B&Q website, 2013)
1969 – B&Q was founded by Richard Block and David Quayle and the first store opened in Portswood, Southampton.
1979 – Company went public; 26 stores in operation.
1980 – B&Q was acquired by FW Woolworth 1982. Takeover of FW Woolworth and B&Q by Paternoster, now Kingfisher plc.
1984 – 155 stores following internal growth and acquisitions.
1990 – Evolutionary development from Depot to Warehouse format began.
1991 – B&Q launched its supplier Environmental Audit.
1995 – First ‘true’ B&Q Warehouse opened in Aberdeen.
1996 – First B&Q store opened in Taiwan.
1998 – Acquisition of NOMI, Poland’s leading DIY retailer. Merger with Castorama, the French number one in DIY.
1999 – Acquisition of Dickens and Screwfix, the UK’s largest hardware mail order shopping business.
2001 – www.diy.com, B&Q’s transactional website launched. Largest B&Q store worldwide opened in Shanghai, China, on the traditionally lucky date for the Chinese – the eighth day of the eighth month. The Yangpu store was B&Q’s third store in Shanghai and fourth in China.
2002 – B&Q opened its first store in the Republic of Ireland.
2003 – 100th B&Q Warehouse opened in Northern Ireland.
2004 – B&Q announced a four-year partnership (until 31 December 2008) with the British Olympic Association to sponsor Team GB to the Turin Winter and Beijing Summer Olympic Games.
2005 – B&Q sponsored Ellen MacArthur to become the fastest solo sailor non-stop around the world.
2006 – B&Q launched an energy efficiency campaign to encourage its customers to make improvements around the home to save energy and as a result save money and protect the environment.
2007 – B&Q re-launched its decorative brand ‘Colours’ with new range of paints, wallpapers, curtains and soft furnishings.
2008 – B&Q signed a three year partnership with BioRegional to move towards becoming a One Planet LivingÂ® business in order to reduce its impact on the world’s resources. B&Q is awarded chain-of-custody certification for both Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification schemes (PEFC).
2009 – B&Q begins one year sponsorship of 4homes, Channel 4’s property strand including established programmes Grand Designs, Property Ladder, Location Location Location and Relocation Relocation. B&Q opened its most eco store in New Malden, London.
Source: B&Q, 2013
Application of “knowledge”
Basics of “knowledge”
Figure 1: Model of knowledge
Source: Nick Finck, Mary Hodder, and Biz Stone, 1994 – 2005
Within the context of actions various forms of knowledge and ‘knowing’ have equal importance, Cook and Brown support this with strong evidence showing how they are linked to the classical Greek model (Cook and Brown, 1999). The approach of knowledge is a wide and conceptual notion that involves two kinds of epistemologies: “epistemology of possession” and “epistemology of practice”.
Forms of knowledge i.e. “explicit / tacit “and” individual / group” which have specific, simple and traditional assumptions are “Possession”. “Tacit knowledge” is defined as “knowledge difficult to articulate” (Nonaka and Takeuchi, 1995; Baumard, 1999) know-how and often used for practical situations. For example expertise and professional intuition are entrenched as individual’s experiences. It has been contrasted with codified, formal and “know-what” objective knowledge which is easy to share in words and numbers (Busch, 2008). This is “explicit knowledge” (Brown and Duguid, 1998) which is easy to identify, store and retrieve.
Each of them cannot obtain or modify each other (Cook Brown, 1999), however, they “are not totally separate but mutually complementary entities” in a current debate (Nonaka and Takeuchi, 1995). In general, humans require understanding conceptually because each of us has separate practical purposes. In addition, it suggests that knowledge is stored in an individual’s mind with concepts and propositions. On the other hand, “practice” means “knowing” an action either individually or collectively gained from real-life experiences.
Figure 2: Model of knowledge and knowing
Source: Cook & Brown, 1999
According to Cook and Brown’s framework, there are a four types of knowledge (i.e. “know-what, know-why, know-how and who-knows-what”) and its ways of knowing (Cook and brown, 1999).
Firstly, “know-what” is explicit knowledge relating to organizational facts and conventions (Weick, 1995). In the ways of knowing, “concepts” stand for individual, explicit or subjective forms of knowledge.
Secondly, “know-why” is explicit knowledge relating to behaviour models and global rules. Tacit knowledge relates to normative practice, local and socially situations. “Stories” relate to the application of specific knowledge in specific situations in regards to “knowing”. This is in order to provide a foundation of applications and cultural meanings, that legitimize a rationale within the organizational culture.
Thirdly, “know-how” is tacit knowledge relating to accumulated internalization and recursive interpretation, by learning skills for professional capabilities and expertise. In the relation to knowing, “skills” represent individual and tacit knowledge that allowed to be applied unreflectively. This becomes communicated and internalized by shared practice. “Genres” are used to make a group knowledgeable and accessible within specific communities through shared practices and conventions.
Lastly, “who-knows-what” relates to wide social networks of knowledge for individuals i.e. explicit knowledge. This allows groups to be more stable in accessing and influencing perceptions throughout processes, community boundaries, expert claims and use of specific genres.
Figure 3: Cook and Brown’s Knowledge management
Source: Cook and Brown, 1999
Importance of “knowledge”
Today, knowledge management is applied in any type of industry, organizations, institutions and the public around the world. Throughout collecting and transferring the data, they can easily know how to manage and gain value and benefits from it. It’s also possible to motivate and develop implementation effectively. The better the knowledge, more knowledge will be gained. Importantly is to create, transfer and apply knowledge with goals of achieving its objective. Hence effective knowledge management is the key driver for the innovation process which results in new products, services and solutions.
Analysis of case – B&Q
Figure 4: Nonaka’s framework
Source: Nonaka, 1994
How B&Q to gain “epistemology of possession” in Inter-organizational level
Individual Explicit knowledge according to Spender’s framework (Spender, 1998) states that information gained personally through structured programs and schemes provides knowledge that the receiver actively knows and understands to the extent that it can be used within a situation. B&Q has various training systems in place for their employees based upon their current and preferred future roles are in the company infrastructure. For example Fast Track focuses on development of supervisory and management roles, while apprenticeships focus on gaining trades and all employees can gain accredited qualifications from City and Guilds.
The Kingfisher Academy provides a B&Q’s managerial level support system improve their leadership qualities and business awareness. Over 250 of the top managers in the Kingfisher group; which B&Q is a part of, attended these modules in 2012. This resulted in managers analysing their financial strategy on those seminar techniques. The seminars themselves were designed with the expertise of the senior directorial level of Kingfisher group. Hence this is an example of explicit social knowledge within Spender’s framework (Spender, 1998) this is because the knowledge and the use of it in the ‘knowing’ process was gained from separate data entities such as directors’ personal knowledge, research papers and previous experiences, applied in an internal networked community within the company.
How B&Q to gain “epistemology of possession” in Intra-organizational level
Employees in general apply their personal knowledge to achieve or complete their required duties or targets within a working context. As B&Q is a primary sales based corporation it relies heavily on the skills and qualifications of the people currently employed as well as their personality and attitude to their duties. As shown in Spender’s framework (Spender, 1998) B&Q employees are subtlety encouraged to show a positive professional manner to their customers this results in employees providing personalised service; in the form of opinions and reviews, of products and services.
Kingfisher Group has maintained a high level of employee engagement to the company’s mission of providing expertise to self-home improvements. This is done by ensuring that every employee is enthusiastic and knowledgeable about the products and services available. Apart from specific skills or experiences Kingfisher Group knows that it is vitally important to establish a collective knowledge basis as defined by Spender’s framework (Spender, 1998). For example, B&Q’s sister French counterpart Castorama has launched online product forums for employees to learn and share product knowledge across the business.
4.3 How B&Q to gain “epistemology of practice” in Intra-organizational level
Based on Socialisation and Internalisation within Nonaka’s framework (Nonaka, 1994), in order to achieve their objectives in providing with the best products at the best prices to customers; B&Q stakeholders recognize that suppliers hold the key in achieving that from group sourcing ambitions (Kingfisher website- supplier). For B&Q to find suppliers that met their exact standards of quality and value, it was required to share experiences and knowledge from strategy to development (Kingfisher website- Management & committees), this also developed a strong and equally beneficial relationships with manufacturers (Kingfisher website – Our strategy – Creating the Leader). If the company has to make the most of combined buying scale, then it is essential to continuously improve and develop partnerships by effectively ensuring that standards are met in the condition of supply. Thus, B&Q currently provides further support and communication to their international suppliers in relationship-building to fulfil their mission of increasing the business.
4.4 How B&Q to gain “epistemology of practice” in Inter-organizational level
Based on, B&Q is design the “code of conduct” and “nine Critical Failure Points” (Operational Standards for Supply Chains, 2007) in action plans (externalization), in purpose to able the factories and worksites to meet all of the international standards and define a condition of supply with engagement. During an annual assessment within operation processes, each vendor is required to provide details of all factories and worksites that supply B&Q. Additionally, site managers have a commitment to B&Q’s values and aims. The exchange and ‘Combination’ of knowledge from different relevant parties can help them reach the required standards set within a certain period of time. This is example of Externalisation and Combination of Nonaka’s framework (Nonaka, 1994) shows that when B&Q designed their “Code of Conduct” and “Nine Critical Failure Points” (B&Q’s Operational Standards for Supply Chains, 2007) for the purpose of all factories and worksites distributing with B&Q has met international standards and conditions of supply engagement.
As part of the Kingfisher group, B&Q benefits from the strategies implemented to strengthen international supplier partnerships with the aim to continuously support and develop those relationships. In October 2009, Kingfisher Supplier Conference had a title of ‘Re-invent the home’ this lead to suppliers the opportunity to exchange views on market trends and lifestyle (Kingfisher Group website 2012 – Strategic Suppliers). This externalisation of moving strategic vision from the intra perspective i.e. board of directors to the independent suppliers shows that Kingfisher group understands the importance of explicit knowledge to the logistic process (Nonaka, 1994).
4.5 How B&Q to apply “possession” and “practice” knowledge to “Innovation”
B&Q could expand upon Castorama’s ‘super-sized’ brainstorm session by using their employee’s personalised products and services information into an online community forum with separate regular local, regional and national discussions (Kingfishers website 2012 – Investing in our leadership capability) .
Also through supplier partnerships it was possible for B&Q to create specific products geared towards their suppliers’ expertise and research into the emerging market trends. For example their partnership with BioRegional, B&Q have established an extensive set of sustainable products and services such as the One Planet Home range that manage consumer’s home environmental impact (B&Q website 2012 – Environment: One Planet Home).
Both of the above show how individual and social possession knowledge can be used to create new business concepts. While the Kingfishers Economic Profit is a key measure to improve financial returns this was and is done by creating a strategy that focuses on making the group become the world’s expert on home improvement, ‘Creating a Leader’ strategy was launched in March 2012 and exemplifies that “practical” knowledge of establishing well-defined goals and objectives can lead to an innovative business methodology (Kingfisher website 2012 – Creating a Leader).
Application of “product, process and organizational” innovation
Basics of “innovation”
“Innovation is the process of making changes, large and small, radical and incremental, to products, processes, and services that results in the introduction of something new for the organization that adds value to customers and contributes to the knowledge store of the organization”( O’Sullivan, David, 2009).
To start with product innovation, it is the beginning of a good or service that is new or significantly improved for generating revenue. It can mostly be found and applied in new or existing technology, for example electronic and computer products. Next, process innovation is the implementation of a new significantly improved production or delivery processes for saving costs. It indicates significant changes in equipment, techniques and/or software, for example “EDI” and “RFID” systems. Finally, organizational innovation is the implementation of new organizational processes in changing business practices, the workplace and relationships with parties externally. For example, teams plan to let employees have greater independence in decision making and inspire them to contribute their ideas and feedback. “Network formation is important here in developing shared practice and, hence, shared meanings” (Brown and Duguid, 2001; Carlile, 2002).
Importance of “innovation”
Due to the exponential technological growth in recent years, innovation stands as a vital role and drives opportunity and growth in the new market. As every organization has to face challenges and adapt to any transformation of competitors. Furthermore, customers have more choice in selecting their products and focusing more on the quality, price and customization, as well as new products. Therefore, business has to diversify products to satisfy the needs and increase profits. In summary, innovation is valued prominently within nations to drive economic growth and bring benefits to individuals. For organizations, it can compete and supersede their rivals with outstanding performance.
“Socially” and “politically” elements that drive “innovation”
Internal drivers of “innovation”
Innovation relies upon the ease of access of resources in all of the divisions involved within a company, also all the parties need to be collectively involved from manufacturing prototypes to pitching the final idea or product to potential clients. This is to ensure that innovation is an efficient and effective part of the company’s business and organizational system.
Traditionally innovations were create within a company by particular employees which had the expert know-how and their personal networks to colleagues and management that could acquire the resources and business planning needed to get the innovation from idea to final product (Hardy and Dougherty, 1996). These networks were constructed through long term employment within the company usually from employees that have worked with various divisions and know how to manoeuvre around the formal constricted managerial system using social events and activities to build a multifunctional team to spearhead the innovation process. The success of innovations was solely based upon the influence and managerial status of the innovator which could give a political lever to overcome obstacles. However Hardy and Dougherty (1996) stated that the key for sustained innovative process is to establish a political shift away from individual innovators and senior management to an organization-wide system.
Even though Hardy and Dougherty acknowledged that from low to high level employees are part of the innovative process and should be engaged and integrated with each other, their approach focused on companies that had a conservative hierarchy either a top-down or bottom-up management. These systems are not compatible with innovative thinking as most senior managerial positions’ role are to protect the interests of the stakeholders or at least consider them this leads to the ultimate decision on whether an innovation is given permission to proceed to the process stage is at least considered or rejected if conflict could arise. This view should be furthered that political power resides not only in managerial powers but also in networks; resources and coordination respectively, which leads to a focus shift away from stakeholder interest to innovation process of forming networks and innovation meaning to set-up networks on particular ideas (Swan, 2005).
External drivers to “Innovation”
So far this section focused on the internal elements of political power and social networks. However Stoneman explains that government bodies, NGOs, research councils and the like all contribute to the amount and wealth of information available. Particularly in the UK, The Arts Council influences several creative industries as well as scientific and technological sectors by having funding and new innovators available, expert knowledge, regional hubs and partnerships that all contribute to increase innovative effort (Stoneman, 2010).
Government influences on innovation is wide reaching and depending on where and what type of industry the company is can make or break its innovation system. For instance in the UK, Spain and Norway all provide tax incentives for small to middle sized companies to boost their R&D activities, it is shown by the Community Innovation Survey within Germany and Flanders, on public funded firms verses non-funded firms, it was shown that where firms were subsidised had a more actively innovative (Aerts and Schmidt, 2008).
Whilst influence and managerial status are important for the organisational and product innovation, without proper understanding of what the innovation stands for in terms of strategic value and commitment innovations are either will be failures or one off achievements, for example BANKCO’s failed innovations (Hardy and Dougherty, 1996). Therefore comprehensive understanding of the involved parties interests and assumptions will lead to constructive dialogue and communication (Jackson, 2006). Innovations need support both physically i.e. resources and organisational systems and conceptually i.e. commitment and enthusiasm for it to be a success (Swan, 2006).
Analysis of case – B&Q
How B&Q apply the elements of Inter-organizational in managerial levels
The commercial success of a new product depends on how well the product’s design meets customers’ needs (Rothwell et al. 1974; Lilien and Yoon 1988). B&Q focuses on home improvement i.e. improve people’s lives in helping them to create an ideal home. For this reason, it produces sustainable products and services for the customers in an eco-product innovation that positively significantly lowers impact on the environment during production, manufacture, usage and disposal (Eco-products summary, 2012). B&Q ensures that eco-products are manufactured at a factory or production site that works towards meeting their minimum standards for operations as mentioned in section 4.1. The chief executive regularly monitors a set of buying standards and signed policies that address issues surrounding conditions and sustainable procurement of worksites and factories. Additionally it complies with local and national environmental legislation and demonstrates an action plan to improve (CFP8).
Figure 6: Turning the waste cycle on its head Figure 7: The twin cycles of the circular economy
Source: Ellen Macarthur Foundation, 2012 Source: Ellen Macarthur Foundation, 2012
In 2011, B&Q cooperated in research with the Ellen MacArthur Foundation, whom assists and inspire a generation to re-think, re-design and build a positive future (Ellen Macarthur Foundation website, 2012) into ‘closed loop’ products, that can preserve resource, avoid landfill and increased value in perpetual re-usage in ambitious ways (Kingfisher CR Summary Report 2011/12). Then, B&Q launched 11 product brands worked on applying a common approach to sustainability across their own brands. Such as “Clean Spirit” launched in early 2012 (Kingfisher Group CR performance 2011/12), it is primarily water-based cleaning product formulated with bio-gradable ingredients, virtually odourless and non-flammable, with low VOC properties and no compromise on its effectiveness. “With a relational view” (Scarbrough, 1996), “greater emphasis on the development of sharing understandings and boundary spinning activities prerequisite of integration” (Boland and Tenkasi, 1995). This work is an example of involving partnerships and collaboration with other businesses and institutions.
Figure 8: Cycle of “closed loop” model
Source: Richard Crookes – Ellen MacArthur Foundation, 2012
How B&Q apply the elements of Intra-organizational in managerial levels
B&Q has developed a multi-trip packaging innovation system called “Longspacs” and “Carrierpac” (B&Q’s One Planet Home Action Plan, 2011), by their logistics specialist using personal networks with design consultants “Outpace”, bulk container manufacturer “Storesack” and environmental organization “WRAP”; the Scottish and Welsh Governments are parts of the board (WRAP website, 2013). Those systems greatly facilitate B&Q in reducing costs and replace cardboard packaging used for kitchen components transportation to customers. “Longspacs” is a 3m long polypropylene box which is covered in a woven polypropylene fabric fitted with handles. It can be opened at both ends, is rain proof, rugged and easy to handle. “Carrierpac” is a reusable cover used to transport kitchen worktops this replaces single-use packaging with a greener, cost effective, sustainable multi-use format. “It involves the new product, the new technology, the new market, the new material and the new combination” (Cardinal et al., 2001). The most rewarding aspect is the project can meets their target of exceptional product care, excellent corporate social responsibility, reduced costs and waste in a creative way.
Another activity is called “The B&Q Youth Board” (B&Q website – Youth Board, 2012) which is the company’s first-ever youth board consisting of 16-18 years old. It was also partnered with Ellen MacArthur Foundation in 2011. B&Q UK and Ireland ran a competition to recruit a team of “bright young individuals” on how to create a more sustainable future. All members will search for insights and recommendations to specifically face real sustainable challenges by the company. Finally, B&Q selected nine successful candidates and trained them from the B&Q board on a business sustainability project. The idea is beneficial in giving them a chance to foresee B&Q’s future. In sustainability development, the board still continues to run this activity in schools, scouts and UK Youth (Progess against targets in 2011, 2011). “Pockets of seed money should exist throughout the organization so that ideas have multiple chances for development” (Jelinek & Schoonhoven, 1990).
Figure 9: Kingfisher plc – 2011/12 progress and 2020 target
Key 2020 target:
1,000 products that are closed loop or made from 100% waste material.
We have embarked on a number of closed-loop research projects in trial phase. B&Q UK is also working closely with the Ellen MacArthur Foundation to understand ways to move towards a circular economy, building on its role as a founding corporate partner.
Source: Kingfisher plc – CR Group performance, 2012
Figure 10: Kingfisher plc – 2011/12 progress and 2020 target
Data for 2011/12
% of retail sales
‘Best in class’ eco products – the most innovative
eco products and services in our ranges
‘Eco compliance’ products – products with some
eco credentials e.g. certified timber
All products with eco credentials – including ‘best
in class’ and ‘eco compliance’ products
Source: Kingfisher plc – CR Group performance, 2012