Knowledge Management and Risk Management Connection explained with Unilever

Wee Kim Wee School of Communication and Information

Division of Knowledge Management

K6213 – Knowledge Management Technologies

“Fusing Knowledge Management practices into Traditional Risk Management –

Moving towards a person-centric approach”

A Unilever case study

Submitted By

Ronit Naor Tal (G1101786J)

Thangavelu Muthu Kumaar (G1101765E)

Venkataramanujam Kannan (G1101791L)

Members Contribution Peer Evaluation

Thangavelu Muthu Kumaar KM frameworks and RM

framework fusion and

conceptualization

=

Ronit Naor Tal Unilever interview and

Enterprise tools in

Unilever that can be

associated with RM and

KM

=

Venkataramanujam Kannan Risk Map and KM

Actions that can be

associated to manage risks

in Unilever

=

Table of Contents 1. Introduction .................................................................................................................................... 5

2. Theory of Risk .................................................................................................................................. 5

3. Traditional Risk Management ......................................................................................................... 6

4. KM and RM fusion and Conceptualization ...................................................................................... 6

4.1 SECI Model - KM as an enabler of RM .......................................................................................... 6

4.2 Identifying the Risk flow by relating to K-flow in KM Systems Process ........................................ 7

4.3 The impact of fusion – KM and RM in the organization ............................................................... 8

5. Unilever as a Case Study ................................................................................................................. 8

5.1 Potential Risks to corporate assets – Risk Analysis (Traditional RM framework) ......................... 9

5.2 Applying OLSM in the Unilever Organization Setting to demonstrate the effectiveness of RM

and KM Fusion .................................................................................................................................. 14

5.2.1 Learning frame 1 - Environmental Interface to Adaptation ................................................ 14

5.2.2 Learning Frame 2 - Meaning and Memory to Culture ......................................................... 15

5.2.3 Learning Frame 3 - Dissemination and Diffusion to Integration .......................................... 19

5.2.4 Learning Frame 4 - Action and Reflection to Goal attainment ............................................ 19

Conclusion ............................................................................................................................................. 22

References ............................................................................................................................................ 23

Abstract:

“Every morning in Africa, a gazelle wakes up.

It knows it must run faster than the fastest lion or it will be killed.

Every morning in Africa, a lion wakes up.

It knows it must outrun the slowest gazelle or it will starve to death.

It does not matter whether you are a lion, a gazelle, or an enterprise.

When the sun comes up, you’d better be running to meet the needs of the day.”

A thoughtful extension of Dan Montano’s (1985) quote is to reflect the competitive nature of

present day’s enterprises. The essence of winning or even survival rests on maximizing the

value of the corporate assets. The organization should not only stand to create value and

defend their assets, but also proactively manage the risks in the competitive landscape,

operating environment and markets. Risk management involves measuring the identified

risks in all dimensions and mapping with its prime axes – likelihood and business impact.

The traditional solutions of risk management has a financial and operational focus

implemented by the executives and managers often to cut down costs of low priority tasks,

divest, change their product or service pricing, change their operating mechanisms and

practices. The paper recommends a broader solution to manage risks in a Knowledge

perspective seeking into identification of inadequate knowledge at process and strategic

layers of communication, collaboration and cognition, which in turn can aid in better risk

management. This paper in the latter part offers insight of the conceptualization with tools

and technologies that can be directly attributed to Risk Management (RM) and Knowledge

Management (KM) in a globally present and one of the most successful enterprises in the

world, ‘Unilever’. It starts with the measurement of risks with a ‘Risk Map’ and transitioning

into a ‘Knowledge Map’ with Know what’s and know how’s for risk mitigation, then

applying Knowledge Management practices to act upon and learn the broad spectrum of

Knowledge in processes and technologies with a long term focus to proactively manage the

risks in the future. Knowledge Management is the central theme for the day to enhance

learning, thereby eliminating risks and maximizing performance strategically and proactively.

In this study, Traditional RM framework is fused with KM frameworks to create a better RM

solution – Risk Map Framework is fused with Schwandt’s Organization Learning Systems

Model (OLSM) and associated with traditional KM theories – SECI and KMS process.

1. Introduction

“Risk comes from not knowing what you're doing” (Warren Buffett, 2007) – As the quote of

the billionaire’s investor and the CEO of Berkshire Hathaway states, risk is where the action

and reflection is unaware of the business intent. This means risk arises from the act of ‘not

knowing’, the lack of knowledge. The traditional risk management practices has a financial

perspective balancing the costs, revenue and investments or an operational focus acting upon

the processing mechanisms, standards and alternatives. The objective of this study is to

demonstrate the knowledge perspective of risk management by fusing RM and KM with the

existing KM technology stack. Traditional RM uses a data-centric analysis tool integrated

with the Decision Support Systems (DSS) (Olszak & Ziemba, 2003). This is a Bottom- Up

approach looking more at numbers to gain insights for action. Dougherty argues that

‘Knowledge is about people, not databases’ (1999). A right strategy is with a mix of Bottom-

Up and Top-Down approaches guides in a positive way of managing risks in a Person-Centric

approach with appropriate use of technology (Neil, Allen, Woodhead et al, 2009). Knowledge

Management is a people centred process driven by learning strategies - people to documents

as in ‘codification’ and people to people as in ‘personalization’ (Hansen, Nohria & Tierney,

1999). A fusion ERM and KM principles can set a road map to efficient risk management,

driving organizations with the power of learning and doing, hence improving the business

performance with the right strategy and vision in long term.

2. Theory of Risk: Risk literature separates ‘risk’ from ‘uncertainty’ and defines the risk as a measurable

probability that something will happen. In common usage the words ‘risk’ and ‘uncertainty’

are often synonymous (Lupton, 1999 p9)

According to Ghosal, Any Multi National Corporation faces four major risks -

Macroeconomic, Political, Competitive and Resource risks (1987).

Macroeconomic – Wars and natural calamities, uncertain and random movements in wage,

interest and exchange rates.

Political – Policy actions of national governments, legal and regulatory mechanisms

Competitive – uncertainty about competitor’s actions or development of competitive

technology

Resource – lack of human resources and technology capital

This classification is adopted to categorize the risks in the Unilever case study in the later

part. Hansson argues that: risks are inextricably connected with interpersonal relationships.

They do not just ‘exist’; they are taken, run or imposed (2000 p4).

3. Traditional Risk Management:

The traditional technocratic and objective approaches of managing risks tend to lose the

‘person’. Alaszewski and Alaszewski (2002) argue that taking a narrow leader centric

approach to risk will contribute to common people’s disempowerment in the organization and

a sense of irresponsibility during a crisis. The business executives and leaders should insist

and allow employees to be exposed to the strategic and operational risks that an organization

is facing and motivate them to contribute proactively to manage risks with a long term

perspective. “Risks are results of actions that are neither necessary nor impossible; they are

contingent” (Thompson, 1985) and depend on human actions. Solving risks involves

identifying what is important to a person from his or her own perspective and find out

appropriate solutions (DH, 2007 p4). Power (2004) calls for ‘intelligent’ risk management

without swamping managerial attention and relying on independent critical imagination

characterised by learning and doing rather than rule-based processes. Most Enterprises driven

by technology now have increasingly high focus on financial and operational capability when

it comes to managing risks. The Enterprise Risk Management approach should carry a social

construction where there is a long term vision of knowledge embodiment in processes and

practices.

4. KM and RM fusion and Conceptualization:

4.1 SECI Model - KM as an enabler of RM:

KM and knowledge management systems are based on the interactions among people, which

correspond to the movements from tacit and explicit knowledge to tacit and explicit

knowledge on the individual and organizational level (Nonaka and Takeuchi, 1995).

“Risk Management is frequently not a problem with lack of information, but rather lack of

knowledge with which to interpret its meaning” (Marshal and Prusak 1996). Once a new risk

is identified it implies that new knowledge is required (Fourie & Shilawa 2005).

The process of RM can be applied in SECI model as follows –

Socialization: RM involves a complex decision making process with collaborative efforts of

stake holders, vendors/suppliers, employees and executives and share a common risk

modelling experience and risk knowledge discovered by socialization. (Tacit to Tacit)

Externalization: Codification of risk knowledge and case based RM practices, lessons learnt

by the managers involved in the risk modelling process. (Tacit to Explicit)

Combination: The discovered risk knowledge is combined with existing risk knowledge and

best practices. Reclassifying and synthesizing the existing knowledge is to ease the

application in RM in the future. (Explicit to Explicit)

Internalization: Learning and understanding the risk knowledge to change appropriate work

flow in the process under risk or implementing a holistic RM model considering all the

internal and external risk events of the organization. (Explicit to Tacit)

4.2 Identifying the Risk flow by relating to K-flow in KM Systems Process: Bosua and Scheepers (2007) investigated for insights in the knowledge flow mechanism and

inferred that “formal and informal SNs (social networks) complemented by a shared network

of integrated information and knowledge-based artifacts are determinants for effective

knowledge sharing in complex environments.”

In RM context (a complex environment), KM processes act as enablers to improve the

efficiency of teams in assessing the risks and sharing a common decision experience by

effectively collaborating with people involved (Wang et al., 2006).

Knowledge Discovery: A new risk implies new ways of measurement and the potential

events and workflow in the organization that could be affected in such a situation. Fusing and

applying the existing risk knowledge can help in understanding the new or current risks.

Knowledge Capture: RM requires the captured risk knowledge to be codified, stored,

organized and indexed within the knowledge base.

Knowledge Transfer: RM is a cross disciplinary, inter-departmental action requiring a

holistic view to support individuals, organizations, inter-organizations, business partners to

learn and transfer risk knowledge to develop the capacity to manage them.

Knowledge Application: Risk knowledge can be embedded into new product development,

converted into competitive advantage by adopting the lessons learnt and best practices.

4.3 The impact of fusion – KM and RM in the organization:

The fusion considers a collaborative RM decision making process considering users, stake

holders, suppliers or vendors associated where there are more chances of solving the risk with

a broader view. It encourages a positive and informed risk management practice with a

‘learning’ based KM approach. Most importantly, it contextualises human behaviour along

with the process and revenue level impacts. It develops a learning culture. It motivates people

to codify case based RM approaches, lessons learnt and new risk knowledge discovered. It

creates a shared risk modelling experience and helps us to adapt to dynamic changes in the

business. Tolerable risks in turn stimulate creativity and innovation. Social networks, portals,

blogs and communities can be a platform for collaboration and group think to probe deep into

issues that the organization is facing and the viable solutions validated and suggested by

peers. This eases the thrust on top management by opening up the new way of looking at

risks, by adding value to employees, empowering them to act on risks. However, the

solutions need not be necessarily taken for implementation of RM, but the employees learn

and it will be visible in the next cycle of product development or process management.

5. Unilever as a Case Study:

About the organization:

Unilever owns many of the prominent brands in the food and beverages (Knorr, Lipton,

Hellmans, Bertolli), detergents (Cif, Comfort, Omo) and personal care products (Axe, Dove,

ponds). It is a dual-listed company consisting of Unilever N.V. in Netherlands and Unilever

PLC in United Kingdom. Both Unilever companies have the same directors, and they operate

as a single business. The current non-executive Chairman of Unilever N.V. and PLC is

Michael Treschow while Paul Polman is the Group Chief Executive.

There are more than 171,000 employees around the world working in Unilever (as of 2011)

and the worldwide turnover in 2011 was €46.5 billion. Unilever products are sold in over

than 190 countries. €1 billion invested in R&D worldwide in 2011. They are already 13 years

as the food Producers sector leader in the Dow Jones Sustainability.

*Unilever Enterprise tools associated with Risk Management and Knowledge Management

mentioned in this paper are based on an interview with a senior finance associate in Unilever,

Singapore (The tools are confidential and can be used in the context of this term paper only)

Corporate assets – Intellectual Capital:

Unilever assets can be broadly classified into human, structural and relational capital and

listed below:

Brand Value

Suppliers, Retailers and Customers Network

Strategic alliances and Outsourcing models

Global Market Investments

Manufacturing processes, practices and methods

Policies and procedures

ICT systems

Enterprise Knowledge Portals

R & D wing

Knowledge and Intelligence in Human Resources

5.1 Potential Risks to corporate assets – Risk Analysis (Traditional RM

framework):

To study the impact of risks on the corporate assets identified, a Risk Map is created based

on the input from Unilever Annual and Accounts Reports – Outlook and Risks section (2011

& 2010). The factors and events in the report directed in analysing the risks in the dimensions

of traditional RM where the top management looks into potential events affected in the

business, threats to profitability and the likelihood of occurrence. They are often based on

Cause and Effect Diagrams, SWOT (Strength, Weakness, Opportunities, and Threat) and

PEST (Political, Economic, Social, and Technological) frameworks.

Relational Capital

Structural Capital

Human capital

Figure 1: Unilever Risk Map

Tool Used: Clear Risk Manager available at www.clearrisk.com

For risk classification, Ghosal’s risk theory (1987) is used.

Risk

ID

Risk Event Risk

Category

Likelihood

Scale (1-10)

Business

Impact

Scale (1-10)

1 Regional political unrest Macroeconomic Low High

2 Forecasting errors and loss of

key suppliers

Resource High Medium

3 Change in customer consumption

trends

Competitive High High

4 Compliance with and

anticipation of new legal and

regulatory requirements

Political Medium Medium

5 Decline in business during an

economic downturn

Macroeconomic/

Political

Medium Medium

6 Higher shipping costs with

increase in oil price

Resource Medium Low

http://www.clearrisk.com/

7 Uncertainty of weather patterns

and natural calamities

Resource/

Macroeconomic

Low High

8 Difficulty in D&E market

investment and procurement with

forex fluctuations

Macroeconomic High High

9 Change Management in Mergers

and Acquisitions

Competitive Low Medium

10 Maintenance of high social and

environmental standards

Competitive High Medium

*Scale: Low (1-3) Medium (4-6) High (7-10)

Source: Unilever Annual and Account Report, Outlook and Risks section (2011 & 2010)

5.1.1 Risk Impact Assertion:

Regional political unrest: Supply chains are exposed to fallout from political unrests; it can

disrupt the entire supply chain like procurement to delivery of finished goods to the end

consumer. Supply chain may be interrupted due to the wars, government change and riots.

Political unrest also can cause the prices to rise and fall passionately. (Oke &

Gopalakrishnan, 2008)

Forecasting errors and loss of key suppliers: Forecasting errors lead to demand

unpredictability and leads to forecasting inaccuracies in certain areas linked with short

product lifecycle, lead-time, and promotions. These are very frequently happening risks that

leads to misallocation of resources in inventory and information management, pricing,

sourcing and bullwhip effect (Niranjan, Wagnera & Aggarwal, 2011). Loss of key suppliers

occurs infrequently its mainly due to not meeting of regulatory standards, instability with

quality standards, running out of the business, not able to meet up with increase in supply

(Oke & Gopalakrishnan, 2008).

Change in customer consumption trends: Product quality, service quality and emergence

of new brands and trends create more switching options for consumers. Promotions lead to

high consumption followed by less consumption during non-promotional pricing period (Huo

& Zhang, 2010).

Compliance with and anticipation of new legal and regulatory requirements:

Government regulations may impose more rigorous needs on companies and increases the

cost. Regulatory requirements will vary amid the time period. It is more or less related with

the political party, unpredictable and it leads to medium level risk impact.

Decline in business during an economic downturn: The impact rests on the severity of the

situation and the alternate consumption trends in the region. This has a fair impact on

business where the changes should be addressed with change in production capacity and

change in marketing mix, product promotion and pricing need to be proactively sketched to

fit the needs of the day (Huo & Zhang, 2010).

Higher shipping costs with increase in oil price: Rising oil and transportation costs would

impact profitability of entire supply chain. It is more obvious that the global rise in oil price

impacts the entire business distribution network like trade-off with producing costs and trade-

offs with inventory costs1.

Uncertainty of weather patterns and natural calamities: Weather patterns are predictably

accoutring risks needs to be planned accordingly, while natural calamities like floods,

earthquake, and break out of pandemic diseases occurs infrequently however brutally affects

the supply (Oke & Gopalakrishnan, 2008).

Difficulty in D&E market investment and procurement with forex fluctuations: The fall

and rise currency values will affect the procurement costs, thus influencing the operations of

supply chain performance. It can be associated to higher risks especially in developing and

emerging markets (Huo & Zhang, 2010).

Change Management in Mergers and Acquisitions: This type of risk comes into play for

dynamic and expanding organizations like Unilever and is susceptible to cultural changes

which can change way of sharing information and knowledge and thus can result in a

collision affecting the chain of operations if not properly planned.

Maintenance of high social and environmental standards: Corporate Social Responsibility

recently is an action incorporated in the long term vision of most organization to showcase

their value to society and environment. Particularly direct consumer facing organizations like

1 http://www.scdigest.com

http://www.scdigest.com/

Unilever should have a higher perceived value to the end customers through such actions and

the risks incurred from not adopting to such standards can cause a serious threat to their

product and brand value.

Transitioning into a Knowledge Map from Risk Map:

Knowledge management can be seen as a system that integrates together people, process and

technology and makes it possible to increase performance through learning. Schwandt’s four

learning subsystems (environmental interface, action & reflection, meaning & memory,

dissemination & diffusion) are interdependent. If all the four works well, it can be expected

that the organizational learning system will transform new information into valued

knowledge through actions. The OLSM in the Figure 2 show the integration of performance

through learning using KM methods and tools.

The aim of OLSM model is to analyse the relationship between actions of people and their

individual and collective ability to adapt to their environment.

The model raises the following questions:

What do we know as an organization?

How can we apply what we know faster and more efficiently?

How can we generate more and better knowledge faster?

(Carol Gorelick, 2004)

Figure 2: OLSM KM model

Source: Gorelick & Tantawy-Monsou (2005)

5.2 Applying OLSM in the Unilever Organization Setting to demonstrate the

effectiveness of RM and KM Fusion:

To associate and fuse KM practices in the traditional risk management framework (Risk Map

previously derived), the mapped risks are captured into the four frames of learning system.

The knowledge required for managing the captured risk in a person-centric view or the KM

view is analysed and associated with the existing RM/KM solutions in Unilever. (Neef, 2005)

The key aspect of the new conceptual model lies in having ‘people’ as the key actor and

connecting him to people, information, technology and business in the learning environment.

KM tools used by Unilever can be associated directly with the mapped risks and

management. The learning system frames for capturing the risks and associating Unilever

RM tools which are directly associated with KM are also related to the phases in SECI

process and KM systems process.

5.2.1 Learning frame 1 -Environmental Interface to Adaptation:

5.2.1.1 Risks Captured:

Regional political unrest

Decline in regional business during an economic downturn

Higher shipping costs with increase in oil price

Uncertainty of weather patterns and natural calamities

5.2.1.2 Most Prominent solution for RM identified with KM theory:

SECI: Socialization

KMS Process: Knowledge Discovery

5.2.1.3 Knowledge Dimensions of the Risk and KM actions:

Knowledge about regional geo-political events, cost drivers in transportation and knowledge

about alternative energy use, dynamic pricing knowledge during supply demand fluctuations,

alternative suppliers knowledge base, insights from consulting partners about the market –

These knowledge dimensions can help in managing the risks

People to People: Market Intelligence and Competitive Intelligence insights from consulting

partners, communities of practice for employees, external customer communities

People to Information: Back up plans, crisis management plans and stories shared in

Enterprise Information Portal

People to Technology: Intelligent agent technologies alerting people in the organization

about dynamic risk events happening around in real time and available solutions

People to Business: What-if analysis to realize the impact of supply demand fluctuations on

business costs and revenue

5.2.1.4 People-Centric RM solutions directly associated with KM in Unilever:

Collaborative Planning, Forecasting and Replenishment:

The process standard adopted by Unilever helps in effective collaboration between trading

partners. KM plays an important role in extending the cooperation and trust needed between

both parties.

Collaboration with consulting partners to reveal trends:

Unilever collaborates with agencies, analytics and consulting partners like Nielsen to reveal

trends about the market and the competitors to plan their pricing, marketing mix and

promotion.

Back-up plan:

SAP ERP portal helps in deciding the alternative suppliers and enables change in workflow

and transactions. Integration of retail demand intelligence (RDI) solution with ERP, where

demand forecasting and analytics are core components underpinning the replenishment

decisions and other core retail processes.

5.2.2 Learning Frame 2 - Meaning and Memory to Culture:


Change in customer consumption trends

Compliance with and anticipation of new legal and regulatory requirements


SECI: Externalization

KMS Process: Knowledge Capture


Knowledge about customers, Knowledge about the policies and procedures, best practices,

standard templates and methods (Know hows) of different departments – marketing, sales,

customer service and product development, Collective knowledge in communities and idea

aggregators, Customer and Market intelligence, Knowledge about quality standards

People to People: ‘Know how’s shared through communities and meetings, Shared work

spaces

People to Information: Personalized marketing, customer, business and process insights by

shared in Common Enterprise Information Portal

People to Technology: Conceptual Modelling tools and interactive video and audio based

training and process know how’s

People to Business: Newsletters, magazines and personalized Emails to reveal the

performance of business and participation required from the user’s end.


IPM, Innovation Process Management:

This RM/KM solution is the best example to realize the effectiveness of proactive risk

management by fusing KM practices and clearly long term and proactive RM solutions like

this helps Unilever to sustain the competitive advantage in the market.

The program follows the product from concept to market, and examines the market

integration year after its release.

The steps are: idea, feasibility, capability, market ready, market deployment, post launch

After each step there is an internal test that checks the value index for each project, it should

check what is profitable for the company and what isn’t.

It starts as idea: each department may come with the ideas about new concept or product and

it is captured in the system. Every month, there is a team meeting of the heads of all

departments like: marketing, R&D, production, and finance, they decide together which

products can go up to the next level. After the product is moved to the next level, it is tested

according to the criteria for the company’s capability and market suitability

Feasibility: Is it possible to do this product?

Capability: Can Unilever do it?

Market ready: Are we ready to launch the product?

Market deployment: After 6 months to one year there is examining of the product to explore

if it is meeting the target in several areas: finance, marketing, advertising, representation,

branding . They analyse the summaries and point out the credentials and the mistakes and

then the idea is moved to the repository for strategic application in the future. Only the

marketing team is allowed to upload a new project to the system and they control the access

and visibility of the dashboard to all other employees.

Learning: The learning centre portal enables employees to register for courses that they are

interest on them. It also gives them option to learn online courses. Each employee has “my

passport” and there he can find all the courses that he did and need to do. Some courses are

professional and some are for general information, the employee receives summons for

courses through the site and the employer may require him to take courses relevant to his

work area.

SharePoint: Each and every department can upload relevant documents and useful electronic

material to work and share them with others. SharePoint have options to direct and invite

people for sharing knowledge, there is collaboration zone that explains how to open this share

point and certainly use it for effective collaboration. The index can include employee’s

preferences like: forms, list, support team, training materials, dissuasion, feedback, groups.

5.2.3 Learning Frame 3 - Dissemination and Diffusion to Integration:


Forecasting errors and loss of key suppliers

Difficulty in D&E market investment and procurement with forex fluctuations


SECI: Combination

KMS Process: Knowledge Sharing


Knowledge about experts, Information shared in corporate blogs and advanced

communication software like tele presence and video conference, knowledge about customers

from social CRM, Knowledge about business processes and supply chain from ERP,

Knowledge and insights from BI tools, knowledge from research databases like Forrester

People to People: Expert locator, Office communicator, Desktop sharing, Video

conferencing

People to Information: Enterprise Resource Planning, Customer Relationship Management,

Corporate blogs, Secure Enterprise Application Integration to shared research databases,

Enterprise Information Portal housing Exchange rate and dynamic economic indicators from

Bloomberg, Reuters and IQ Capital for people in finance department.

People to Technology: Telecommuting, Remote Process monitoring, Process simulation,

Intelligent Routing and communication devices for efficient logistics

People to Business: Business Intelligence tools provide insights for managers to decide on

the market expansions and helps them to perform ‘What If Analysis’ to take key decisions


‘I need to’: This is another unique example for KM/RM fusion to create value for employees

and proactively engage them in RM. This application in Unilever clearly had Person-Centric

view and empowers employees.

Inside this application, we can find all the available jobs within Unilever, it is possible to

order business trip (flight, hotel) and report on expense instantaneously.

Travel and expense: Each employee is entitled to hold a credit card provided by Unilever that

can connect with citi bank directly; all expenses are instantly processed. If the expenditure is

not personally marked by the employee, the system helps in identifying the section budgets to

move it in. After the expenses are marked online, the direct manager checks and passes along

with the receipts to finance and they give the final approval. This saves a lot of time and

autonomy to employees to work and claim to their ease, particularly in uncertain or

demanding situations.

Centralized Chat and phone book: All the employees can chat by portal site with all other

employees in Unilever, but it is a closed group where u can decide your chat list. Also,

employees can reach out to experts or process specialists from any department, anywhere in

the world by locating them in the centralized phone book.

Corporate Blog: Allows employees to connect with each other on a social platform to share

personal and professional stories, lessons learnt. This allows the employees to open up and

speak about the work and environment

Single Sign-On Authentication: Enables highly secure and ease of access by making instant

personalization without having to log on.

ERP, CRM, BI tools: Unilever uses tools SAP (ERP), Oracle Siebel (CRM), Cognos (BI)

for managing the internal and external information to act on the risks with insights from data.

5.2.4 Learning Frame 4 - Action and Reflection to Goal attainment:


Maintenance of high social and environmental standards

Change Management in Mergers and Acquisitions


SECI: Internalization

KMS Process: Knowledge Application


Knowledge about environment and sustainability practices, Social network structure,

knowledge of carbon foot print of process, knowledge about employees and their needs,

vision, mission and core values

People to People: Volunteering and initiating external social events, specialized hiring

practices, rewarding sustainable and green ideas from internal and external communities like

schools and universities.

People to Information: Environmental standards, sustainable practices, news feeds,

Communities of practice, Social media, blogs

People to Technology: Simple, intuitive and personalized Human Resource Management

(HRM) processes

People to Business: Spreading brand identity and corporate culture internally and externally

by programmes with Environmental NGOs and Universities


Unilever Business Challenge: To display their corporate social responsibility and to drive

external communities with their corporate image, the organization offers business challenge

case studies every year to selected universities in the globe. The main themes would be to

address future water scarcity, alternative energy sources usage, healthy and hygienic food,

social standards improvement in under developed countries. For instance, In Singapore, the

event was open to NTU, NUS and SMU students.

Corporate University: This program runs through for a year for the newly hired

management associates from universities to expose them to culture, vision, mission, core

values, process and projects to stimulate the strategic thinking and to have a clear insight on

how to work towards achieving Unilever’s business goals. This adds value and empowers

employees by exposing them the assets, risks and management in all departments of the

organization to appreciate the nature of business.

Figure 3: Transitioning to a Knowledge Map from a Risk Map (KM and RM fusion synthesis

in a snap shot)

6. Conclusion:

The conceptualization of the KM and RM fusion and application of such a practice in an

organizational setting has clearly demonstrated better, proactive and long term envisioned

risk management. The 80-20 (People to Technology) rule applies well in the new RM-KM

setting. Adding value to people and empowering them with risk knowledge to think and act

upon, enables better RM rather than just relying on technology to work out statistics,

mathematical forecasting and analysis for the top management. KM based Learning allows

organizations to avoid the risks by incorporating the risk knowledge in new product and

process development in most cases rather than handling after it is encountered. KM enables

people in the organization to understand the culture, live the culture, get influenced with the

environment and apply knowledge to solve business problems and there by enables the

organization to manage its risks to the corporate assets effectively.

7. References:

Gorelick, C., & Tantawy-Monsou, B. (2005), “For performance through learning, knowledge

management is critical practice”. The Learning Organization, 12(2), 125–139.

Neef, D. (2005), ‘‘Managing corporate risk through better knowledge management’’, The

Learning Organization, Vol. 12 No. 2, pp. 112-24.

Neill, M., Allen, J., Woodhead, N., Reid, S., Irwin, L. & Sanderson, H.(2009) , “A Positive

Approach to Risk Requires Person Centre thinking”, Tizard Learning Disability

Review, Pier Professional Publications

Olszak, C. M., & Ziemba, E. (2003), “Business intelligence as a key to management of an

enterprise”, Proceedings of Informing Science and IT Education, 2003. Santa Rosa:

The Informing Science Institute.

Dougherty, V. (1999), “Knowledge is about people, not databases”, Industrial and

Commercial Training, 31 (7), 262-266.

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http://www.unilever.com/images/RisksAR11tcm13282838.pdf

http://www.unilever.com/images/Unilever_20-F_AR10_tcm13-259486.pdf

Knowledge Management and Risk Management Connection explained with Unilever

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