Knowledge Management

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART 1

Introduction of the knowledge management

Leaders of successful organizations are consistently searching for better ways to improve

performance and results. Frequent disappointments with past management initiatives have

motivated managers to gain new understandings into the underlying, but complex mechanisms ‐ such as knowledge ‐ which govern an enterprise’s effectiveness. Knowledge Management, far

from being a management “fad”, is broad, multi‐dimensional and covers most aspects of the

enterprise’s activities. To be competitive and successful, experience shows that enterprises must

create and sustain a balanced intellectual capital portfolio. They need to set broad priorities and

integrate the goals of managing intellectual capital and the corresponding effective knowledge

processes. This requires systematic Knowledge Management. With knowledge as the major

driving force behind the “economics of ideas”, we can expect that the emphasis on knowledge

creation, development, organization and leverage will continue to be the prime focus for

improving society.

Introduction of the WALLMART

In the past two decades Wal-Mart has been the leading domestic retailer. Its primary success has

come from its excellence in customer service, supply chain management, and ability to keep prices low.

The problem facing Wal-Mart is determining how to sustain its dominance in the industry. The

underlying strategic factors contributing to this problem are the United States’ retail market becoming

very saturated and Wal-Mart’s inability to be profitable globally.

In 1994 Wal-Mart’s store sales rates began to fall from the double digits to between four and

seven percent. With the U.S. retail market becoming more saturated, Wal-Mart knew that to sustain its


leadership it would have to expand globally. Wal-Mart entered Mexico with a joint venture and later

entered Canada, Puerto Rico, Argentina, Brazil, Japan, Korea, China and Germany. Despite Wal-Mart’s

numerous efforts, its international division’s profitability lagged well behind that of domestic operations.

This is mainly due to Wal-Mart’s inability to adapt to local cultures, maintain its excellence in customer

service, and maintain low prices.

Case Analysis

Knowledge management refers to the practices and strategies that a company uses in an

attempt to create distribute and enable adoption of strategic insights and specific experiences

(O'Leary, 2002). This knowledge can be embodied in either individual or organizational

practices or processes. Successful business firms and companies have committed hefty

investments towards development of internal knowledge management efforts. One such

company is Wal-Mart Stores Inc. which through this effort has emerged the world’s largest

corporation.

Knowledge has to be organized for it to be useful and valuable. Depending on what use

will be made of it, knowledge should be organized differently. Addicott et al, (2006, identified

four dimensions to knowledge management. These are connectedness, completeness, perspective

and congruency. Creation of knowledge is brought about through recognition of gaps existing in

an organization’s knowledge management practices. Choo, (2002), says that knowledge gaps can

stand in the way of problem solving and decision making and therefore hinder development of

new products. Choo developed a model for decision making which aids in knowledge


management. This model involves identifying and evaluating alternatives by processing all

information and knowledge collected up to date.

In its efforts at developing and nurturing insightful knowledge management skills, Wal-

Mart focuses on its organizational objectives which specifically include improved business

performance, innovation, competitive advantage as well as continuous improvement of business

operations and processes. The company’s knowledge management incorporates such important

issues as formal apprenticeship, discussion forums, corporate libraries, mentoring programs and

professional training. The company also employs specific adaptations of such technologies as

expert systems, knowledge bases, group decision support systems, intranets, knowledge

repositories and also computer supported cooperative work.

Importance of knowledge management at the Wal-Mart stores

Wal-Mart stores have created an indelible mark in the retail business industry. The giant

chain store has an overwhelmingly effective knowledge management program that has enabled it

to retain its competitive advantage even at times of turbulent economic situations. The

corporation’s goals are being achieved simultaneously by strictly adhering to business aims and

balancing operations with the economic growth. Accordingly, economic gin as a result of

positive knowledge management strategies is achieved throughout. The corporations’ knowledge

management strategies have enabled it to focus its strategic business operations into cutting

operational costs and building up a value for its shareholders.


Knowledge can be classified into three broad forms, namely public, shared and personal

knowledge (Alavi, 2001). Public knowledge can be accessed through public domains such as

internet or books. Shared knowledge on the other hand refers to knowledge that is exclusively

held by employees and is only used in work. Personal knowledge is the least accessible

knowledge and is used mainly in work and daily life.

Through focused differentiation, the Wal-Mart has succeeded in cultivating enormous

productivity and making. The corporation is now the leading of its type in not only the USA but

the whole world itself. Nevertheless, the Wal-Mart stores have encountered numerous challenges

in their attempt at introducing various knowledge management strategies. Change management

analysis has greatly overridden the corporation’s organizational growth (Alavi, Maryam, Leidner

& Dorothy, 2001). Effective knowledge management at the Wal-Mart stores is largely

contributed by its ushering in of big financial gains on annual production. This important and

positive trend has reigned over all major stores associated with the corporation all over the

world. The Wal-Mart stores are now ideal for businesses, organizations and units at the modern

global age. Improved employee skills as one way of enhancing effective knowledge management

by the corporation has proved extremely successful in countering challenges encountered

threatening its overall mission (O'Leary, 2002).

The stores effective and reliable knowledge management skills have enhanced efficiency

in service delivery and customer care as well as development of great competition. The

corporation now seems success or failure of its business as a deliverable of staff productivity.

The management’s intellectuality focuses on strengthening the staff by way of transformational


leadership. The company plans language to its employee’s loyalty, diligence and good conduct

and this has gone along way into ensuring long service in duty by the employees. Apt knowledge

management in the company has enabled it to satisfactorily solve all issues related to

organizational practices and conduct as well as make decisions and discover such issues as

animosity.

How the stores apply Knowledge Management in Human Resource Management

Human resource strategies refer to the ways in organizations and business firms select,

recruit, train and nurture their workforces for effective performance and delivery of services.

Different human resource strategies are implemented by different organization and much as this

would be different, they all achieve similar or almost same goals. Effective human resource

strategies have enabled Wal-Mart to implement policies for management of its vast human

resource. The application of effective human resource management strategies in the company is

not a new phenomenon and this has enabled it receive much recognition in the recent years all

over the world.

As an integral part of knowledge management, Wal-Mart’s human resource management

strategies are used chiefly to enable the organization and its vast array of branches manage their

managerial activities through coordination of employee related processes. The effective use of

these strategies has resulted to improved return on investments and has minimized the

company’s financial risks. This has largely been achieved by integrating skilled workforce with

the firm’s existing work force. This is done in line with the organization’s future business plans

and requirements for securing its future success and survival. For that case, the organization


implements human resource strategies taking into account the current state of its business

operations as well as its future goals and objectives (O'Leary, 2002).

As Wolpert, (2001) says, the success of an organization more especially in the field of

knowledge management is determined mainly by the kind of Human Resource management

strategies displayed. Accordingly, Human Resource management strategies involve the power of

an individual to persuade and inspire others towards attaining the objectives and goals of the

organization. Managers across all Wal-Mart’s branches motivate their workers to achieve the

objectives and goals of the organization and out-do their rivals. As leaders, they daily interact

with workers freely and offer directions personally and within teams, various departments as

well as divisions. The effective and sound management of Wal-Mart is a big strength to the

organization in achieving is objectives and remaining competitive (Wolpert, 2001)

Effective human resource management has contributed immensely to redefining

knowledge management at Wal-Mart stores. In its efforts to remain competitive, the company

has made substantial progress in relation to restructuring its long term objectives so that it can

stand abetter chance of achieving its goals. Just like any other business, the Wal-Mart Stores Inc.

has undertaken tremendous transformations with regard to adoption and implementation of the

best knowledge management strategies. As an organization, it has found it useful for it to learn to

manage its people and business operations in a well planned and coherent framework which is

well reflected in the business’ strategy. This way, all its branches have been able to ensure that

all aspects of personnel management are reinforced for the purpose of improving and developing

the performance of the business.


Zetie, (2003), argues that there is no any knowledge management strategy that can

transform the operations of a multi-branched business organization. A particular player an

industry will have to define and develop specific knowledge management strategies that are

unique to their aspirations, goals and performance objectives. Thus, they should take into

account the demands of other players and stakeholders as well (Zetie, 2003).

Majority of typical knowledge management strategies last for a relatively very short

while and may require to be re-evaluated on half-year or annual basis to ensure that the

strategies are both in line with the direction of the company’s objectives and also take into

consideration the situation in the market and the world. Effective knowledge management

has helped Wal-Mart define its goals and also acts as a guide to help employees

acknowledge their importance in the company and how to link this with the company’s

overall objectives.

Knowledge management with regard to communication and feedback at the Wal-Mart

At the Wal-Mart stores, knowledge management is made into use with regard to conflict

management and as such, a complex system of solving conflicts has been created. The

company’s intellectual negotiation capability enables it to differentiate between principles and

discover prone areas and discard them. Ascending principles and self-esteem are two key issues

that have been addressed appropriately through subjective application of knowledge management

in enhancing effective communication in company (Zetie, 2003).


Managers at the Wal-Mart have succeeded primarily due to their ability to man oeuvre

the staff into undertaking positive transformations. The mangers are very intellectual in tackling

company targets and are able to dictate the decision making conclusions without necessarily

having to court grievances from some quarters of the staff. The management is always ready to

guide and protect the staff by providing articulate resources through which the staff and the

management can share their knowledge management experiences and the management is always

ready for unexpected issues raised by the staff. The environment at the Wal-Mart stores

encourages team work with great focus on future growth.

Through the use of knowledge management practices, the Wal-Mart stores has managed

to usher in a new form of employee motivation that focuses on employee retention till retirement

and gives annual rewards to best performing employees with great emphasis on appraisals as

well as potentiality in performance and productivity. For this reason, knowledge management at

the Wal-Mart has greatly been enhanced by managers who have always ensure that the staff are

well maintained and can get time offs and cash rewards which includes gift vouchers prioritizing

family needs. Production and performance has been achieved by the collective responsibility of

the staff and the company is now able to balance management roles with global trends in the

same industry (Wolpert, 2001).

The extent of knowledge management

Enhancing knowledge and talent management at the Wal-Mart’s intellect for quick

requirement has really widened its scope for global gains with respect to the corporation’s

targeted goals and tasks. At the Wal-Mart stores, assignments and projects are monitored


continuously. Checking operation progress thoroughly ensures high productivity and

performance for all staff. In the Wal-Mart jobs are always checked fully to ensure that staff and

employers blend for one target of productivity and targeted tasks. Continuous need for

productivity is essential for upheavals identification. Help in performance for staff has

significantly elevated the appraisal times thereby enabling constant blending between managers

and staff (Wolpert, 2001).

In enhancing the stores’ acceleration of performance, it has been extremely essential for it

to define its objectives. The company’s staff is very competent throughout the branches and

subsidiaries and thus, they can accept any new applications with respect to knowledge

management. Performing required duties on all necessary management issues will result in

excellence in the firm thus motivating the corporation’s all staff to go up the ladder.

Promotions for staff annually by “on the Job Training” achieve a greater scope in

implementation of the productivity and performance of staff and manager. At any moment,

appraisal granting it necessary to staff by pay grade increases moral and motivation of all

employees. An updated current summation of staff will comfort staff due to their frequent

performances. It is quite satisfying for the staff at the Wal-Mart when they receive Awards and

cash gifts from the manager to enhance their morals. Perfect performance is derived by The

Manager of Wal-Mart selecting the best employee of the year annually to lift up the staff spirit

and motivation by issuing gift vouchers as rewards. The conclusion for the Wal-Mart is achieved

by a thorough management checked by performance. Need to check out behavioural perfection

for all components blending in together.


At the Wal-Mart stores, staffs are a priority with union factors being checked out

carefully, plus added value to stakeholders for stability. There should be no interference with

staff due to less staff levelling. The recruitment should administer to correct quality and quantity,

who will be accountants, admits, producing items, selling and managerial. Unions thus should

be more co-operational to staff and managers. Staff priorities family even with perfect packages

given with benefits, whose expectation and goal is deemed important to the firm. The staff are

motivated properly and always focused for positivist throughout, and not just qualifications

stashed away in office metal cabinets (Wolpert, 2001).

Wal-Mart’s concept map

The need to have a sound knowledge management system is one key driving force behind

Wal-Mart’s success. The corporation maintains and acts upon awareness in a potentially

changing scope and as such, the directions of many of its investment projects has been the major

compelling factors in determining which strategy to best adopt. In this regard, Wal-Mart

regularly has established and regularly assesses the scope of its knowledge management

Endeavour. The corporation’s experience has shown that failure to keep track of changes in

knowledge management can lead to adverse elicitation effort that may well go into directions

that do not serve the goals and aspirations of the business (Terreberry, 1968).

Wal-Mart’s actual elicitation of knowledge takes different forms and these can be

categorized broadly into those which are direct and the indirect. Direct methods of eliciting

knowledge occur in collaboration with expert programs and are very efficient in knowledge

management. These are chosen from a vast array of techniques some of which are based upon


interviews and analysis of familiar techniques. Indirect methods of eliciting knowledge are on

the other hand enhanced through study or use of relevant information resources as can be

identified by knowledge engineer. Knowledge management and elicitation process as such leads

to creation of concept maps that are included in the corporation’s knowledge models.

Strength of the knowledge management in WALLMART

Knowledge has to be organized for it to be useful and valuable. Depending on what use

will be made of it, knowledge should be organized differently. Addicott et al, (2006, identified

four dimensions to knowledge management. These are connectedness, completeness, perspective

and congruency. Company’s knowledge management incorporates such important issues as

formal apprenticeship, discussion forums, corporate libraries, mentoring programs and

professional training. The company also employs specific adaptations of such technologies as

expert systems, knowledge bases, group decision support systems, intranets, knowledge

repositories and also computer supported cooperative work Creation of knowledge is brought

about through recognition of gaps existing in an organization’s knowledge management

practices. Choo, (2002), says that knowledge gaps can stand in the way of problem solving and

decision making and therefore hinder development of new products. Choo developed a model for

decision making which aids in knowledge management. This model involves identifying and

evaluating alternatives by processing all information and knowledge collected up to date.

As an organization, Wal-Mart has found it useful for it to learn to manage its people and

business operations in a well planned and coherent framework which is well reflected in the

business’ strategy. This way, all its branches have been able to ensure that all aspects of


personnel management are reinforced for the purpose of improving and developing the

performance of the business.

- Just like any other business, the Wal-Mart Stores Inc. has undertaken tremendous

transformations with regard to adoption and implementation of the best knowledge

management strategies.

- At the Wal-Mart stores, knowledge management is made into use with regard to conflict

management and as such, a complex system of solving conflicts has been created.

- Effective HRM has contributed in a large part to redefining knowledge management at

Wal-Mart stores. In its efforts to remain competitive, the company has made substantial

progress in relation to restructuring its long term objectives so that it can stand a better

chance of achieving its goals.

Through the use of knowledge management practices, the Wal-Mart stores has managed to

obtain a new form of employee motivation that focuses on employee retention till retirement and

gives annual rewards to best performing employees with great emphasis on appraisals as well as

potentiality in performance and productivity.

- For this reason, knowledge management at the Wall- Mart has greatly been enhanced by

managers who have always ensure that the staff are well maintained and can get time offs

and cash rewards which includes gift coupons prioritizing family needs.

Recommendation


Wal-Mart will need to continually upgrade their competencies or develop new ones that

satisfy shifting customer/market requirements. Firms suffer losses at the hands of nimble

competitors not because they do not have strategic plans, but because their strategies do not

prepare them to anticipate and deal with competitive developments. Here the wall mart should

give emphasis knowledge management model to improve the knowledge management. Here, we

use a three-step knowledge management model – learn before, learn during, and learn after. This

model is integrated into our approach and becomes an essential component for any repetitive

project or process. The immediate result of applying the Exceed Knowledge Management Model

is an accelerated learning curve, shared intelligence, improved performance, and higher levels of

innovation.

Accelerated Learning

Knowledge Management has always existed in some form or another. On-the-job

discussions, mentorship programs and professional training are all examples of informal

knowledge management systems. Our systematic three step approach to Knowledge

Management is:

Learn Before – Einstein’s advice on time management was to use 90% of available time

for planning, and 10% for execution. This principle is just applicable to project execution. The

more focused time is spent on pre-project learning, the more this will enable you to properly plan

each step of the project and work smarter. Pre-project learning is accomplished through team

sharing, Peer Assist sessions, and subject matter expert interviews.


Learn During – Learning from others gives your team the knowledge to enter the

execution stage with confidence. However, you can never completely plan for the unexpected,

and there will be many steps and activities that, for better or worse, don’t go according to plan.

Each of these deviations from the expected is an opportunity to learn.

We use After Action Reviews to identify activities that exceeded our expectations as well

as areas where we didn’t make the mark. Actions are assigned and closed out quickly and the

lessons learnt are shared across the team.

Learn After – Upon conclusion of any project, we facilitate a comprehensive post-project

assessment, conducted with the team. Any and all lessons learnt are collected, documented, and

distributed. Teams and others who can benefit from the identified learning experiences are

invited to a knowledge sharing session. This in turn forms part of their learning before and

enables accelerated learning across the organization

Here, as we know that, Wal-Mart will be able to sustain its leadership in the industry if they can

find a way to be profitable globally. The pressures in foreign countries for local adaptation and to lower

costs are high. To cope with these pressures Wal-Mart should obtain a transnational strategy. The

international strategy will enable Wal-Mart to adapt to local markets, locate activities in optimal

locations, and attain economies of scale, and increase knowledge flows and learning. For this, the wall-

mart needs to improve the knowledge management continuously.

Conclusion


Although knowledge management activities are all over the map in as far as Wal-Mart

stores is concerned particularity in regard to technology development and its subsequent

implementation, the stores have not yet fully reaped all the benefits that accrue from its

implementation. Recent analyses on the corporation’s pursuit of knowledge management

strategies have demonstrated on the relationship between technological investment and

improvement in business performance. All in all, the corporation seems to be faring quite well

with regard to the way in which it is implementing knowledge management not only as a way of

enhancing profitability and financial growth but also as a way of remaining competitive in a

turbulent world of businesses.

As of now, the company is contend with its leading position in the retail business on the

global scale but still has more work ahead to ensure that it retains this commanding position. The

realization of this will no doubt depend on the corporation’s ability to bolster up its knowledge

management strategies and also focus on offering services and products that meet its customer’s

diverse needs. Wal-Mart expects to enhance its future operations through the application of

modern knowledge management techniques. This will to a great extent result in improved

employee training, innovation, apt responsiveness and also a positive oriented organizational

culture.


References:

Choo, Chun Wei, (2002), Strategic Management of Intellectual Capital and Orginzational

Knowledge. Oxford University Press.

Dalkir, Kimiz, (2005), Knowledge Management In Theory and Practice. Oxford: Elsevier

Butterworth-Heinemann.

O'Leary, D., "Technologies of knowledge storage and assimilation", Holsapple, C.W.,

Handbook on Knowledge Management 1: Knowledge Directions, Springer- Verlag,

Heidelberg, 29-46, 2002.

Terreberry, S., 1968, "The evolution of organizational environments", Administrative

Science Quarterly, 12, 590-613.

Wolpert, D., 2001, "Computational capabilities for physical systems", Physical Review E, 65,

1, 1-27.


Zetie, C., 2003, "Machine-to-machine integration: the next big thing?", Information Week,

April 14, available at: www.informationweek.com/story/showArticle.jhtml?

articleID=8900042.

Addicott, Rachael; McGivern, Gerry; Ferlie, Ewan (2006). "Networks, Organizational

Learning and Knowledge Management: NHS Cancer Networks". Public Money &

Management

Knowledge Management

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