Knowledge & Technology Management Audit Report: Scientific Instruments, Ambala

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Knowledge & Technology Management Audit Report: Scientific Instruments, Ambala

  1. 1. THAPAR UNIVERSITYKnowledge & Technology Audit Report: Scientific Instruments, Ambala Submitted by 1G2 1G2 members: Bhavya Pabby Bhupinder Kumar Ankur Verma Amit Kalaniya Abhinav Parmar
  2. 2. Table of ContentsAcknowledgement................................................................................................................................... 3Need of the project ................................................................................................................................. 4Conceptual background on the 5 KMPs ................................................................................................... 6 KMPs and Information Management ................................................................................................... 6 KMPs in Human Resource Management .............................................................................................. 7 KMPs in R&D ..................................................................................................................................... 10 KMPs & Strategy................................................................................................................................ 11 KMPs in Intellectual Property Management ....................................................................................... 11Audit details .......................................................................................................................................... 12Porter’s 5 force analysis on the scientific instruments industry .............................................................. 13 Bargaining power of customers ......................................................................................................... 14 Bargaining power of suppliers............................................................................................................ 15 Competitive rivalry within the industry............................................................................................... 15 Threat of new entrants ...................................................................................................................... 15 Threat of substitute products ............................................................................................................. 16Research Methodology.......................................................................................................................... 16Findings & Conclusion ........................................................................................................................... 17Limitations of the Study ......................................................................................................................... 18References ............................................................................................................................................ 19Appendix……………………………………………………………………………………………………………………………………………….20 2|Page
  3. 3. AcknowledgementAt the outset of this report, we would like to thank our guides and professors, Dr. Piyush Verma& Dr. Harsh Samalia for their direction and support which was a pre requisite to the completionof this project. We would also like to extend our gratitude to the persons who extended us theircoordination and participated in this knowledge and technology audit. The participation of thesepeople helped us get a better insight into the functioning of the scientific instruments industry inAmbala Cantt. 3|Page
  4. 4. Need of the projectKnowledge has long ago been recognized as an important asset for sustaining competitiveadvantage. Recently, the use of information technologies within an organization has beenidentified, by many companies, as an important tool for managing or sharing organizationalknowledge in order to improve business performance.According to Grant, the knowledge-based view is founded on a set of basic assumptions. First,knowledge is a vital source for value to be added to business products and services and a key togaining strategic competitive advantage. Second, explicit and tacit knowledge vary on theirtransferability, which also depends upon the capacity of the recipient to accumulate knowledge.Third, tacit knowledge rests inside individuals who have a certain learning capacity. The depth ofknowledge required for knowledge creation sometimes needs to be sacrificed to the width ofknowledge that production applications require. Fourth, most knowledge, and especially explicitknowledge, when developed for a certain application ought to be made available to additionalapplications, for reasons of economy of scale.People can use their competence to create value in two directions: by transferring and convertingknowledge externally or internally to the organization they belong to. When the managers of afirm direct the efforts of their employees internally, they create tangible goods and intangiblestructures such as better processes and new designs for products. When they direct their attentionoutwards, in addition to delivery of goods and money they also create intangible structures, suchas customer relationships, brand awareness, reputation and new experiences for the customers.Effective knowledge management, using more collective and systematic processes, will alsoreduce our tendency to ‘repeat the same mistakes’. This is, again, extremely costly andinefficient. Effective knowledge management, therefore, can dramatically improve quality ofproducts and/or services.Better knowing our stakeholder needs, customer needs, employee needs, industry needs, forexample, has an obvious immediate effect on our relationship management. 4|Page
  5. 5. So it is very easy to see how effective knowledge management will greatly contribute toimproved excellence, which is to:a) dramatically reduce costsb) provide potential to expand and growc) increase our value and/or profitabilityd) improve our products and servicese) respond fasterThe strategies, methods and tools of knowledge management will undoubtedly change, but thetimeless principles will, of course, remain unchanged.And to survive and succeed in the new global knowledge economy, organizations must becomefar more effective and more productive. Organizations must always strive for the best relationsand highest quality.To do that, the successful organizations and individuals will not allow themselves to keep ‘re-inventing the wheel’ or ‘repeating the same mistakes. This is so costly that good leaders willsimply not tolerate, nor be able to afford, such cost inefficiencies caused by knowledge gaps andbad knowledge flows. [1]Also, technology and innovation are core driving parameters of organizational performance.Some of the reasons these are becoming important are: • Technology is changing fast, new products come from new competitors • Fast changing environment, product lifetimes shorter, need to replace products sooner 5|Page
  6. 6. • Products are increasingly difficult to differentiate • Customers are more sophisticated, segmented and demanding, and expect more in terms of customization, newness, quality and price • Customers have more choice • Apparently separate technologies come together • Markets forming and changing fast • With markets and technology changing fast, and good ideas quickly copied, there is continual pressure to devise new and better products, processes and services fasterConceptual background on the 5 KMPsKMPs and Information ManagementThe information technology infrastructure should provide a seamless "pipeline" for the flow ofexplicit knowledge through the 5 stages of the refining process to enable  capturing knowledge,  defining, storing, categorizing, indexing and linking digital objects corresponding to knowledge units,  searching for ("pulling") and subscribing to ("pushing") relevant content,  presenting content with sufficient flexibility to render it meaningful and applicable across multiple contexts of use.Information technologies such as the World Wide Web and Lotus Notes offer a potentially usefulenvironment within which to build a multimedia repository for rich, explicit knowledge. Input iscaptured by forms for assigning various labels, categories, and indices to each unit of knowledge.The structure is flexible enough to create knowledge units, indexed and linked using categories 6|Page
  7. 7. that reflect the structure of the contextual knowledge and the content of factual knowledge of theorganization, displayed as flexible subsets via dynamically customizable views.Effective use of information technology to communicate knowledge requires an organization toshare an interpretive context. The more that communicators share similar knowledge,background and experience, the more effectively knowledge can be communicated viaelectronically mediated channels. At one extreme, the dissemination of explicit, factualknowledge within a stable community having a high degree of shared contextual knowledge canbe accomplished through access to a central electronic repository. However, when interpretivecontext is moderately shared, or the knowledge exchanged is less explicit, or the community isloosely affiliated, then more interactive modes such as electronic mail or discussion databasesare appropriate. When context is not well shared and knowledge is primarily tacit,communication and narrated experience is best supported with the richest and most interactivemodes such as video conferencing or face-to-face conversation. [2]KMPs in Human Resource ManagementThere are several roles that can be played by HR in developing knowledge management system.First, HR should help the organization articulate the purpose of the knowledge managementsystem. Investing in a knowledge management initiative without a clear sense of purpose is likeinvesting in an expensive camera that has far more capabilities than you need to take goodpictures of family and friends. Too often, organizations embrace technologies to solve problemsbefore theyve even identified the problems they are trying to solve. Then, once they realize theerror, they find it difficult to abandon the original solution and difficult to gather the resourcesneeded to invest in a solution to the real problem. Effectively framing the knowledgemanagement issue, before deciding on a course of action, is a crucial prerequisite for success.Second, as a knowledge facilitator, HRM must ensure alignment among an organizationsmission, statement of ethics, and policies: These should all be directed toward creating anenvironment of sharing and using knowledge with full understanding of the competitive 7|Page
  8. 8. consequences. Furthermore, HRM must nourish a culture that embraces getting the rightinformation to the right people at the right time.Third, HRM should also create the "ultimate employee experience." That is, by transformingtacit knowledge into explicit knowledge through education, organizations must build employeeskills, competencies, and careers, creating "bench strength." This combines the traditionaltraining and development responsibilities of HRM with the new responsibilities of human capitalsteward: using all of the organizations resources to create strategic capability. Disneys new stafforientation, which emphasizes the firms mission, values, and history within a context of the"magic kingdom" experience, is an example of this process of making tacit knowledge morevisible.Fourth, HRM must integrate effective knowledge sharing and usage into daily life. That is,knowledge sharing must be expected, recognized, and rewarded. For many individuals andorganizations, this reverses the conventional relationship between knowledge and power. Often,the common pattern was to hoard knowledge because it made the individual more valuable andmore difficult to replace. Effective knowledge management requires this trend to be overturnedand requires those with information to become teachers and mentors who ensure that others inthe firm know what they know. Teaching must become part of everyones job. Clearly, for such acultural shift to take place, HRM must overhaul selection, appraisal, and compensation practices.Human resource management has the capabilities for creating, measuring, and reinforcing aknowledge-sharing expectation.Fifth, HRM must relax controls and allow (even encourage) behaviors that, in the clockworkworld of industrial efficiency, never would have been tolerated. For example, conversations atthe water cooler were viewed in the past as unproductive uses of employee time—after all,employees were not at their desks completing specified tasks detailed in their job descriptions. Inthe knowledge economy, conversations inside and outside the company are the chief mechanismfor making change and renewal an ongoing part of the companys culture. 8|Page
  9. 9. As another example, consider individuals in organizations described as "gossips," who wouldrather talk than work. Frederick Taylors industrial engineers would have eliminated thesegossips from workplaces in the early twentieth century, since they did nothing that wasperceptibly valuable. However, in the knowledge economy, if the conversations are relevant tothe firms strategic intent, these same people may be described as "knowledge brokers": thoseindividuals who like to move around the company to hear what is going on, sparking newknowledge creation by carrying ideas between groups of people who do not communicatedirectly. If the topics serve organizational needs, these individuals play a role similar to bees thatcross-pollinate flowers and sustain a larger ecosystem.Organizations should selectively recognize and reward, rather than universally discourage andpunish, these types of behaviors. Clearly, not all conversation is productive and constructive.Human resource management still must play a role in discouraging gossip that undermines,rather than promotes, a learning community. Human resource management will need to adjustboth its own perspective (from rule-enforcer) as well as that of managers and others who holdoutdated notions of what is "real work."Sixth, HRM must take a strategic approach to helping firms manage email, instant messenger,internet surfing, and similar uses of technology. Clearly, the Internet has a role in generating anddisseminating knowledge, and therefore is an integral part of knowledge management. A relatedissue is HRMs role in helping firms manage the distancing consequences of electroniccommunication. As employees increasingly rely on technology to communicate, they loseopportunities to develop the rich, multifaceted relationships that encourage the communication oftacit knowledge. Human resource management can contribute to developing social capital bysensitizing employees to the negative consequences of excessive reliance on electronic mediaand by creating opportunities for face-to-face contact.Seventh, HRM must champion the low-tech solutions to knowledge management. Although itshould not ignore the high-tech knowledge management tools, HRM contains the expertise todevelop low-tech knowledge management strategies. For example, when the team that developedthe Dust buster vacuum tool was created, they were given a "war room" in which they could 9|Page
  10. 10. spread out their materials and leave sketches, models, notes, and so on plastered on walls andthroughout the workspace. These visible outputs of their thinking processes helped create ashared context for their efforts and turned the room into a truly collaborative workspace.Some Asian firms, such as Dai-Ichi, create special rooms (with green tea and comfortable placesto sit), where researchers are expected to spend a half-hour daily, telling whomever they meetabout their current work. [3]KMPs in R&DAlthough many of the underlying assumptions of KM are not new, the formal study andapplication of KM in R&D organizations is a relatively young discipline. The goal of the studywas threefold:  Identify a model for knowledge flow in the R&D process that could be a visual point of contact for discussions around the key issues R&D managers face and the ways to manage knowledge flow.  Highlight aspects of KM that are unique or especially important to the process of R&D.  Catalog "better practices" that R&D managers use to facilitate knowledge flow and the knowledge creation process. 10 | P a g e
  11. 11. KMPs & StrategyStrategic plans are developed and deployed to close the gap between what a firm can do andmust do to be competitive. Knowledge strategies are devised to close the gap between what afirm knows and what a firm must know to be competitive. A knowledge strategy defines theactions necessary to ensure the organisation’s knowledge assets meet organisational objectivesand support its strategies. In line with competitive strategies, knowledge strategies provide goals,a unified vision, a base for decision-making, a communication tool, and a foundation forconsistent operations. A knowledge strategy includes actions or options to:• determine which knowledge assets are required;• acquire or develop new knowledge assets;• make major changes to existing knowledge assets;• maintain the existing knowledge assets;• make the knowledge available; and,• dispose of redundant knowledge assetsKMPs in Intellectual Property ManagementIntellectual property rights as a collective term includes the following independent IP rightswhich can be collectively used for protecting different aspects of an inventive work for multipleprotection:-  Patents  Copyrights  Trademarks  Registered ( industrial) design  Protection of IC layout design  Geographical indications 11 | P a g e
  12. 12.  Protection of undisclosed informationIntellectual property is an aspect of property rights which augments the importance of know howassets. Knowledge assets are often inherently difficult to copy; moreover, like physical assets,some knowledge assets enjoy protection against theft under the Intellectual property laws ofIndividual nation states. In advanced nations, these laws typically embrace patents, trademarks,trade secrets and copyright. There are many other dimensions along which knowledge could bedefined or along which innovations could be classifieds. However, the only other key dimensionsto be identified here is whether or not the knowledge in question enjoys protection under theintellectual property laws. Patents, trade secrets, trademarks provide protection for differentmediums in different ways. The strongest form of intellectual property is patent. A valid patentprovides rights for exclusive use by the owner, although depending on the scope of the patent itmay be possible to invent around it, albeit at some cost.The growth of IT has also amplified the importance of intellectual property and has injectedintellectual property into new contexts. E.g. it is not uncommon to discover the foundations ofcorporate success for wholesalers and retailers buried in copyrighted software and in informationtechnology supporting order entry and logistics.Audit detailsIndustry assigned: Scientific InstrumentsRegion: Ambala CanttOrganizations that participated in audit:  Labomed Microscopes  Shiv Dial Sud & Sons  Kanwaljit Scientific instruments  Quality scientific & mechanical works  International Biological Laboratories 12 | P a g e
  13. 13. Porter’s 5 force analysis on the scientific instruments industryPorters five forces analysis is a framework for industry analysis and business strategydevelopment formed by Michael E. Porter of Harvard Business School in 1979. It drawsupon industrial organization (IO) economics to derive five forces that determine the competitiveintensity and therefore attractiveness of a market. Attractiveness in this context refers to theoverall industry profitability. An "unattractive" industry is one in which the combination of thesefive forces acts to drive down overall profitability. A very unattractive industry would be oneapproaching "pure competition", in which available profits for all firms are driven to normalprofit.Three of Porters five forces refer to competition from external sources. The remainders areinternal threats. 13 | P a g e
  14. 14. Porter referred to these forces as the micro environment, to contrast it with the more generalterm macro environment. They consist of those forces close to a company that affect its ability toserve its customers and make a profit. A change in any of the forces normally, requires abusiness unit to re-assess the marketplace given the overall change in industry information. Theoverall industry attractiveness does not imply that every firm in the industry will return the sameprofitability. Firms are able to apply their core competencies, business model or network toachieve a profit above the industry average.Porters five forces include - three forces from horizontal competition: threat of substituteproducts, the threat of established rivals, and the threat of new entrants; and two forces fromvertical competition: the bargaining power of suppliers and the bargaining power of customers.Bargaining power of customersThere are 2 types of customer segments that the scientific industry segment in Ambala serves:one, the domestic segment and the other, is the export market. For the export market,manufacturers of scientific instruments sell their goods through traders who get export ordersfrom mainly US and Europe. Since, threat of backward integration is low from the trader’s sideas they require substantial working capital and expertise to do so, manufacturers concentratemost of their business on these segments (export) whenever they can as they can dominate.The domestic market, on the other hand is relatively fuller and more competitive as consumerstransact in domestic currency and have more options to choose from (102+ firms). This does notleave the manufacturers with much scope for profit in the domestic segment as compared to theexport segment.So in the export market the bargaining power of customers is relatively lower than the domesticsegment. 14 | P a g e
  15. 15. Bargaining power of suppliersSuppliers of raw material for manufacturing instruments include ceramic, plastics and mild steelmanufacturers. These suppliers typically are large scale manufacturers that serve whole clustersof scientific instruments industry located elsewhere in India. Also, apart from certain grades ofthese materials they also manufacture other grades of steel, plastic and ceramic that are used forsurgical instruments industry. Due to this scale of operations, suppliers have a better say on theprices of raw materials they deliver and such SME’s are not wholly needed for their operationsas well. It makes little difference to the supplier whether he gains or loses one or two SMEs.Hence, bargaining power of suppliers is high.Competitive rivalry within the industryBecause of the presence of a large number of firms within the industry and that too in a smallregion (102+ in Ambala Cantt), the industry approaches perfect competition. Players cannot varyprices too much, even though prices alone are not the ultimate determinant. A certain portion ofplayers compete exclusively on prices, while a major portion compete on quality, but only withina certain price range.Thus competitive rivalry is high.Threat of new entrantsSince competitive rivalry is high, margins are moderate but squeezing, domestic buyers are on acertain advantage and suppliers have the upper hand in deciding prices i.e. overall the degree offorces is high, hence this is a relatively unattractive industry for new players (reduced profits).The last entrants to enter were around mid 1990s and since then few have ventured here. 15 | P a g e
  16. 16. Thus, threat of new entrants is low.Threat of substitute productsAs such, there is no real threat of substitute products within the industry.Research MethodologyInterview method was used to process the obtained information from the specialist personnel(expert’s opinion).To attain the objectives of this project, Questionnaire of KM in relation to five differentparameters was provided. Five parameters are:KM and Information Management: This section consists of 7 questions. In this section howcompanies manage to disseminate information within and outside their industry would bemeasured.KM and HRM: This section consists of 7 questions. In this section how companies manage todisseminate information and uses the same for making their HR practices better would bemeasured.KM and Management Practices in R&D: This section consists of 16 questions. In this sectionhow companies utilize KM in making their R& D practices effective and competitive would bemeasured.KM and Strategy: This section consists of 7 questions. In this section how companies manage toalign business strategy with their knowledge goals would be measured. 16 | P a g e
  17. 17. KM and IPR: This section consists of 7 questions. In this section how companies protect theirknowledge using patents and other means is measured.Managers would respond on a five point Likert scale on two dimensions Satisfaction and &Importance. The basic idea here is to understand if the managers understand the importance ofKM in relation to other parameters and they implemented successfully or not.After collecting the data, statistical techniques could be applied. In the present project,Correlation would be used. In each parameter, the correlation between satisfaction andImportance would be calculated.Findings & Conclusion Correlation between Importance and Satisfaction Shiv Dial Labomed Quality Scientific & Sud & Kanwaljit International Microscopes Mechanical Works Sons Sc. Instr. Biological LabInfo. Mgmt 0.915577 0.643524 0.676557 0.804701 0.690137636HumanResourceMgmt 0.67198 1 1 0.88497 0.974631846R&D 0.734643 0.960526 0.895331 0.520165 0.942758076Strategy 0.975237 0.95656 0.948683 0.975237 0.487995425IntellectualPropertyMgmt Na -0.10607 na na na  R & D and HRM are two areas where most firms concentrated the most. There was generally a high correlation between what firms deemed satisfactory and important. This indicates that whatever these firms did in those areas which yielded them satisfactory results, they considered important. They viewed little or no scope for improvement in that area. 17 | P a g e
  18. 18.  Strategy was one area which had a very high correlation throughout. This indicates that an organization was following only those practices that were inherently close to their strategic positioning in the industry. Whatever these companies held satisfactory to their performance was held extremely important.  Use of information management was slight to moderate and companies were satisfied with the existing level of usage.  Intellectual property was one field where very little had been done or explored. Only one firm (Quality Scientific & Mechanical Works) had applied for a patent (malarial parasite detection microscope through capillary method-fluoroscent microscope). But rest of the firms were open to the idea of pursuing patent filing and intellectual property if they came across the opportunity.Limitations of the StudySince it is a pilot survey and data is collected as part of purposive and convenience sampling,generalization of the same cannot be made. Nonetheless this study can be helpful in making thebase for making certain improvements for further research. 18 | P a g e
  19. 19. Referenceshttp://web.cba.neu.edu/~mzack/articles/kmarch/kmarch.htm [1]http://www.allbusiness.com/technology/computer-software/795585-1.html#ixzz1kmKqtpww [2]http://www.explorehr.org/articles/HR_Planning/The_Role_of_HRM_in_Knowledge_Management.html[3] 19 | P a g e
  20. 20. Appendix 20 | P a g e

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