Knowledge Management and Risk Management Connection explained with Unilever

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“Fusing Knowledge Management practices into Traditional Risk Management – Moving towards a person-centric approach”
A Unilever case study

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Knowledge Management and Risk Management Connection explained with Unilever

  1. 1. 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)
  2. 2. Members Contribution Peer EvaluationThangavelu Muthu Kumaar KM frameworks and RM = framework fusion and conceptualizationRonit Naor Tal Unilever interview and = Enterprise tools in Unilever that can be associated with RM and KMVenkataramanujam Kannan Risk Map and KM = Actions that can be associated to manage risks in Unilever
  3. 3. Table of Contents1. Introduction .................................................................................................................................... 52. Theory of Risk.................................................................................................................................. 53. Traditional Risk Management ......................................................................................................... 64. 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 ............................................................... 85. 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 ............................................ 19Conclusion ............................................................................................................................................. 22References ............................................................................................................................................ 23
  4. 4. 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 ofpresent day’s enterprises. The essence of winning or even survival rests on maximizing thevalue of the corporate assets. The organization should not only stand to create value anddefend their assets, but also proactively manage the risks in the competitive landscape,operating environment and markets. Risk management involves measuring the identifiedrisks in all dimensions and mapping with its prime axes – likelihood and business impact.The traditional solutions of risk management has a financial and operational focusimplemented 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 andpractices. The paper recommends a broader solution to manage risks in a Knowledgeperspective seeking into identification of inadequate knowledge at process and strategiclayers of communication, collaboration and cognition, which in turn can aid in better riskmanagement. This paper in the latter part offers insight of the conceptualization with toolsand technologies that can be directly attributed to Risk Management (RM) and KnowledgeManagement (KM) in a globally present and one of the most successful enterprises in theworld, ‘Unilever’. It starts with the measurement of risks with a ‘Risk Map’ and transitioninginto a ‘Knowledge Map’ with Know what’s and know how’s for risk mitigation, thenapplying Knowledge Management practices to act upon and learn the broad spectrum ofKnowledge in processes and technologies with a long term focus to proactively manage therisks in the future. Knowledge Management is the central theme for the day to enhancelearning, thereby eliminating risks and maximizing performance strategically and proactively.In this study, Traditional RM framework is fused with KM frameworks to create a better RMsolution – Risk Map Framework is fused with Schwandt’s Organization Learning SystemsModel (OLSM) and associated with traditional KM theories – SECI and KMS process.
  5. 5. 1. Introduction“Risk comes from not knowing what youre doing” (Warren Buffett, 2007) – As the quote ofthe billionaire’s investor and the CEO of Berkshire Hathaway states, risk is where the actionand reflection is unaware of the business intent. This means risk arises from the act of ‘notknowing’, the lack of knowledge. The traditional risk management practices has a financialperspective balancing the costs, revenue and investments or an operational focus acting uponthe processing mechanisms, standards and alternatives. The objective of this study is todemonstrate the knowledge perspective of risk management by fusing RM and KM with theexisting KM technology stack. Traditional RM uses a data-centric analysis tool integratedwith the Decision Support Systems (DSS) (Olszak & Ziemba, 2003). This is a Bottom- Upapproach 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-Centricapproach with appropriate use of technology (Neil, Allen, Woodhead et al, 2009). KnowledgeManagement is a people centred process driven by learning strategies - people to documentsas 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 businessperformance 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 measurableprobability 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 mechanismsCompetitive – uncertainty about competitor’s actions or development of competitivetechnology
  6. 6. Resource – lack of human resources and technology capitalThis classification is adopted to categorize the risks in the Unilever case study in the laterpart. 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 centricapproach to risk will contribute to common people’s disempowerment in the organization anda sense of irresponsibility during a crisis. The business executives and leaders should insistand allow employees to be exposed to the strategic and operational risks that an organizationis facing and motivate them to contribute proactively to manage risks with a long termperspective. “Risks are results of actions that are neither necessary nor impossible; they arecontingent” (Thompson, 1985) and depend on human actions. Solving risks involvesidentifying what is important to a person from his or her own perspective and find outappropriate solutions (DH, 2007 p4). Power (2004) calls for ‘intelligent’ risk managementwithout swamping managerial attention and relying on independent critical imaginationcharacterised by learning and doing rather than rule-based processes. Most Enterprises drivenby technology now have increasingly high focus on financial and operational capability whenit comes to managing risks. The Enterprise Risk Management approach should carry a socialconstruction where there is a long term vision of knowledge embodiment in processes andpractices. 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, whichcorrespond to the movements from tacit and explicit knowledge to tacit and explicitknowledge on the individual and organizational level (Nonaka and Takeuchi, 1995).“Risk Management is frequently not a problem with lack of information, but rather lack ofknowledge with which to interpret its meaning” (Marshal and Prusak 1996). Once a new riskis identified it implies that new knowledge is required (Fourie & Shilawa 2005).
  7. 7. The process of RM can be applied in SECI model as follows –Socialization: RM involves a complex decision making process with collaborative efforts ofstake holders, vendors/suppliers, employees and executives and share a common riskmodelling experience and risk knowledge discovered by socialization. (Tacit to Tacit)Externalization: Codification of risk knowledge and case based RM practices, lessons learntby the managers involved in the risk modelling process. (Tacit to Explicit)Combination: The discovered risk knowledge is combined with existing risk knowledge andbest practices. Reclassifying and synthesizing the existing knowledge is to ease theapplication in RM in the future. (Explicit to Explicit)Internalization: Learning and understanding the risk knowledge to change appropriate workflow in the process under risk or implementing a holistic RM model considering all theinternal 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 andinferred that “formal and informal SNs (social networks) complemented by a shared networkof integrated information and knowledge-based artifacts are determinants for effectiveknowledge sharing in complex environments.”In RM context (a complex environment), KM processes act as enablers to improve theefficiency of teams in assessing the risks and sharing a common decision experience byeffectively collaborating with people involved (Wang et al., 2006).Knowledge Discovery: A new risk implies new ways of measurement and the potentialevents and workflow in the organization that could be affected in such a situation. Fusing andapplying 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 aholistic view to support individuals, organizations, inter-organizations, business partners tolearn 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.
  8. 8. 4.3 The impact of fusion – KM and RM in the organization:The fusion considers a collaborative RM decision making process considering users, stakeholders, suppliers or vendors associated where there are more chances of solving the risk witha broader view. It encourages a positive and informed risk management practice with a‘learning’ based KM approach. Most importantly, it contextualises human behaviour alongwith the process and revenue level impacts. It develops a learning culture. It motivates peopleto codify case based RM approaches, lessons learnt and new risk knowledge discovered. Itcreates a shared risk modelling experience and helps us to adapt to dynamic changes in thebusiness. 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 intoissues that the organization is facing and the viable solutions validated and suggested bypeers. This eases the thrust on top management by opening up the new way of looking atrisks, by adding value to employees, empowering them to act on risks. However, thesolutions need not be necessarily taken for implementation of RM, but the employees learnand 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 UnileverPLC in United Kingdom. Both Unilever companies have the same directors, and they operateas a single business. The current non-executive Chairman of Unilever N.V. and PLC isMichael 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 overthan 190 countries. €1 billion invested in R&D worldwide in 2011. They are already 13 yearsas the food Producers sector leader in the Dow Jones Sustainability.*Unilever Enterprise tools associated with Risk Management and Knowledge Managementmentioned 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)
  9. 9. Corporate assets – Intellectual Capital:Unilever assets can be broadly classified into human, structural and relational capital andlisted below:Brand Value Relational CapitalSuppliers, Retailers and Customers NetworkStrategic alliances and Outsourcing modelsGlobal Market InvestmentsManufacturing processes, practices and methods Structural CapitalPolicies and proceduresICT systemsEnterprise Knowledge PortalsR & D wing Human capitalKnowledge and Intelligence in Human Resources5.1 Potential Risks to corporate assets – Risk Analysis (Traditional RMframework):To study the impact of risks on the corporate assets identified, a Risk Map is created basedon 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 dimensionsof traditional RM where the top management looks into potential events affected in thebusiness, threats to profitability and the likelihood of occurrence. They are often based onCause and Effect Diagrams, SWOT (Strength, Weakness, Opportunities, and Threat) andPEST (Political, Economic, Social, and Technological) frameworks.
  10. 10. Figure 1: Unilever Risk Map Tool Used: Clear Risk Manager available at www.clearrisk.comFor risk classification, Ghosal’s risk theory (1987) is used.Risk Risk Event Risk Likelihood BusinessID Category Scale (1-10) Impact Scale (1-10)1 Regional political unrest Macroeconomic Low High2 Forecasting errors and loss of Resource High Medium key suppliers3 Change in customer consumption Competitive High High trends4 Compliance with and Political Medium Medium anticipation of new legal and regulatory requirements5 Decline in business during an Macroeconomic/ Medium Medium economic downturn Political6 Higher shipping costs with Resource Medium Low increase in oil price
  11. 11. 7 Uncertainty of weather patterns Resource/ Low High and natural calamities Macroeconomic8 Difficulty in D&E market Macroeconomic High High investment and procurement with forex fluctuations9 Change Management in Mergers Competitive Low Medium and Acquisitions10 Maintenance of high social and Competitive High Medium environmental standards*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 candisrupt the entire supply chain like procurement to delivery of finished goods to the endconsumer. 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 demandunpredictability and leads to forecasting inaccuracies in certain areas linked with shortproduct lifecycle, lead-time, and promotions. These are very frequently happening risks thatleads to misallocation of resources in inventory and information management, pricing,sourcing and bullwhip effect (Niranjan, Wagnera & Aggarwal, 2011). Loss of key suppliersoccurs infrequently its mainly due to not meeting of regulatory standards, instability withquality 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 emergenceof new brands and trends create more switching options for consumers. Promotions lead tohigh consumption followed by less consumption during non-promotional pricing period (Huo& Zhang, 2010).
  12. 12. Compliance with and anticipation of new legal and regulatory requirements:Government regulations may impose more rigorous needs on companies and increases thecost. Regulatory requirements will vary amid the time period. It is more or less related withthe 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 thesituation and the alternate consumption trends in the region. This has a fair impact onbusiness where the changes should be addressed with change in production capacity andchange in marketing mix, product promotion and pricing need to be proactively sketched tofit the needs of the day (Huo & Zhang, 2010).Higher shipping costs with increase in oil price: Rising oil and transportation costs wouldimpact profitability of entire supply chain. It is more obvious that the global rise in oil priceimpacts 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 predictablyaccoutring risks needs to be planned accordingly, while natural calamities like floods,earthquake, and break out of pandemic diseases occurs infrequently however brutally affectsthe supply (Oke & Gopalakrishnan, 2008).Difficulty in D&E market investment and procurement with forex fluctuations: The falland rise currency values will affect the procurement costs, thus influencing the operations ofsupply chain performance. It can be associated to higher risks especially in developing andemerging markets (Huo & Zhang, 2010).Change Management in Mergers and Acquisitions: This type of risk comes into play fordynamic and expanding organizations like Unilever and is susceptible to cultural changeswhich can change way of sharing information and knowledge and thus can result in acollision affecting the chain of operations if not properly planned.Maintenance of high social and environmental standards: Corporate Social Responsibilityrecently is an action incorporated in the long term vision of most organization to showcasetheir value to society and environment. Particularly direct consumer facing organizations like1 http://www.scdigest.com
  13. 13. Unilever should have a higher perceived value to the end customers through such actions andthe risks incurred from not adopting to such standards can cause a serious threat to theirproduct and brand value.Transitioning into a Knowledge Map from Risk Map:Knowledge management can be seen as a system that integrates together people, process andtechnology and makes it possible to increase performance through learning. Schwandt’s fourlearning subsystems (environmental interface, action & reflection, meaning & memory,dissemination & diffusion) are interdependent. If all the four works well, it can be expectedthat the organizational learning system will transform new information into valuedknowledge through actions. The OLSM in the Figure 2 show the integration of performancethrough learning using KM methods and tools.The aim of OLSM model is to analyse the relationship between actions of people and theirindividual 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)
  14. 14. 5.2 Applying OLSM in the Unilever Organization Setting to demonstrate theeffectiveness of RM and KM Fusion:To associate and fuse KM practices in the traditional risk management framework (Risk Mappreviously 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 KMview 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 andconnecting him to people, information, technology and business in the learning environment.KM tools used by Unilever can be associated directly with the mapped risks andmanagement. The learning system frames for capturing the risks and associating UnileverRM tools which are directly associated with KM are also related to the phases in SECIprocess and KM systems process.5.2.1 Learning frame 1 -Environmental Interface to Adaptation:5.2.1.1 Risks Captured:Regional political unrestDecline in regional business during an economic downturnHigher shipping costs with increase in oil priceUncertainty of weather patterns and natural calamities5.2.1.2 Most Prominent solution for RM identified with KM theory:SECI: SocializationKMS Process: Knowledge Discovery5.2.1.3 Knowledge Dimensions of the Risk and KM actions:Knowledge about regional geo-political events, cost drivers in transportation and knowledgeabout 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
  15. 15. People to People: Market Intelligence and Competitive Intelligence insights from consultingpartners, communities of practice for employees, external customer communitiesPeople to Information: Back up plans, crisis management plans and stories shared inEnterprise Information PortalPeople to Technology: Intelligent agent technologies alerting people in the organizationabout dynamic risk events happening around in real time and available solutionsPeople to Business: What-if analysis to realize the impact of supply demand fluctuations onbusiness costs and revenue5.2.1.4 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 tradingpartners. KM plays an important role in extending the cooperation and trust needed betweenboth parties.Collaboration with consulting partners to reveal trends:Unilever collaborates with agencies, analytics and consulting partners like Nielsen to revealtrends about the market and the competitors to plan their pricing, marketing mix andpromotion.Back-up plan:SAP ERP portal helps in deciding the alternative suppliers and enables change in workflowand transactions. Integration of retail demand intelligence (RDI) solution with ERP, wheredemand forecasting and analytics are core components underpinning the replenishmentdecisions and other core retail processes.5.2.2 Learning Frame 2 - Meaning and Memory to Culture:5.2.2.1 Risks Captured:Change in customer consumption trendsCompliance with and anticipation of new legal and regulatory requirements
  16. 16. 5.2.2.2 Most Prominent solution for RM identified with KM theory:SECI: ExternalizationKMS Process: Knowledge Capture5.2.2.3 Knowledge Dimensions of the Risk and KM actions: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 ideaaggregators, Customer and Market intelligence, Knowledge about quality standardsPeople to People: ‘Know how’s shared through communities and meetings, Shared workspacesPeople to Information: Personalized marketing, customer, business and process insights byshared in Common Enterprise Information PortalPeople to Technology: Conceptual Modelling tools and interactive video and audio basedtraining and process know how’sPeople to Business: Newsletters, magazines and personalized Emails to reveal theperformance of business and participation required from the user’s end.5.2.2.4 People-Centric RM solutions directly associated with KM in Unilever:IPM, Innovation Process Management:This RM/KM solution is the best example to realize the effectiveness of proactive riskmanagement by fusing KM practices and clearly long term and proactive RM solutions likethis helps Unilever to sustain the competitive advantage in the market.The program follows the product from concept to market, and examines the marketintegration year after its release.The steps are: idea, feasibility, capability, market ready, market deployment, post launchAfter each step there is an internal test that checks the value index for each project, it shouldcheck 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 andit is captured in the system. Every month, there is a team meeting of the heads of all
  17. 17. departments like: marketing, R&D, production, and finance, they decide together whichproducts can go up to the next level. After the product is moved to the next level, it is testedaccording to the criteria for the company’s capability and market suitabilityFeasibility: 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 exploreif 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 andthen the idea is moved to the repository for strategic application in the future. Only themarketing team is allowed to upload a new project to the system and they control the accessand visibility of the dashboard to all other employees.Learning: The learning centre portal enables employees to register for courses that they areinterest on them. It also gives them option to learn online courses. Each employee has “mypassport” and there he can find all the courses that he did and need to do. Some courses areprofessional and some are for general information, the employee receives summons forcourses through the site and the employer may require him to take courses relevant to hiswork area.SharePoint: Each and every department can upload relevant documents and useful electronicmaterial to work and share them with others. SharePoint have options to direct and invitepeople for sharing knowledge, there is collaboration zone that explains how to open this sharepoint and certainly use it for effective collaboration. The index can include employee’spreferences like: forms, list, support team, training materials, dissuasion, feedback, groups.5.2.3 Learning Frame 3 - Dissemination and Diffusion to Integration:5.2.3.1 Risks Captured:Forecasting errors and loss of key suppliersDifficulty in D&E market investment and procurement with forex fluctuations
  18. 18. 5.2.3.2 Most Prominent solution for RM identified with KM theory:SECI: CombinationKMS Process: Knowledge Sharing5.2.3.3 Knowledge Dimensions of the Risk and KM actions:Knowledge about experts, Information shared in corporate blogs and advancedcommunication software like tele presence and video conference, knowledge about customersfrom social CRM, Knowledge about business processes and supply chain from ERP,Knowledge and insights from BI tools, knowledge from research databases like ForresterPeople to People: Expert locator, Office communicator, Desktop sharing, VideoconferencingPeople 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 fromBloomberg, 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 logisticsPeople to Business: Business Intelligence tools provide insights for managers to decide onthe market expansions and helps them to perform ‘What If Analysis’ to take key decisions5.2.3.4 People-Centric RM solutions directly associated with KM in Unilever:‘I need to’: This is another unique example for KM/RM fusion to create value for employeesand proactively engage them in RM. This application in Unilever clearly had Person-Centricview and empowers employees.Inside this application, we can find all the available jobs within Unilever, it is possible toorder business trip (flight, hotel) and report on expense instantaneously.Travel and expense: Each employee is entitled to hold a credit card provided by Unilever thatcan connect with citi bank directly; all expenses are instantly processed. If the expenditure isnot personally marked by the employee, the system helps in identifying the section budgets tomove it in. After the expenses are marked online, the direct manager checks and passes along
  19. 19. with the receipts to finance and they give the final approval. This saves a lot of time andautonomy to employees to work and claim to their ease, particularly in uncertain ordemanding situations.Centralized Chat and phone book: All the employees can chat by portal site with all otheremployees 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 inthe world by locating them in the centralized phone book.Corporate Blog: Allows employees to connect with each other on a social platform to sharepersonal and professional stories, lessons learnt. This allows the employees to open up andspeak about the work and environmentSingle Sign-On Authentication: Enables highly secure and ease of access by making instantpersonalization 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:5.2.4.1 Risks Captured:Maintenance of high social and environmental standardsChange Management in Mergers and Acquisitions5.2.4.2 Most Prominent solution for RM identified with KM theory:SECI: InternalizationKMS Process: Knowledge Application
  20. 20. 5.2.4.3 Knowledge Dimensions of the Risk and KM actions: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 valuesPeople to People: Volunteering and initiating external social events, specialized hiringpractices, rewarding sustainable and green ideas from internal and external communities likeschools and universities.People to Information: Environmental standards, sustainable practices, news feeds,Communities of practice, Social media, blogsPeople to Technology: Simple, intuitive and personalized Human Resource Management(HRM) processesPeople to Business: Spreading brand identity and corporate culture internally and externallyby programmes with Environmental NGOs and Universities5.2.4.4 People-Centric RM solutions directly associated with KM in Unilever:Unilever Business Challenge: To display their corporate social responsibility and to driveexternal communities with their corporate image, the organization offers business challengecase studies every year to selected universities in the globe. The main themes would be toaddress future water scarcity, alternative energy sources usage, healthy and hygienic food,social standards improvement in under developed countries. For instance, In Singapore, theevent was open to NTU, NUS and SMU students.Corporate University: This program runs through for a year for the newly hiredmanagement associates from universities to expose them to culture, vision, mission, corevalues, process and projects to stimulate the strategic thinking and to have a clear insight onhow to work towards achieving Unilever’s business goals. This adds value and empowersemployees by exposing them the assets, risks and management in all departments of theorganization to appreciate the nature of business.
  21. 21. Figure 3: Transitioning to a Knowledge Map from a Risk Map (KM and RM fusion synthesisin a snap shot)
  22. 22. 6. Conclusion:The conceptualization of the KM and RM fusion and application of such a practice in anorganizational setting has clearly demonstrated better, proactive and long term envisionedrisk management. The 80-20 (People to Technology) rule applies well in the new RM-KMsetting. Adding value to people and empowering them with risk knowledge to think and actupon, enables better RM rather than just relying on technology to work out statistics,mathematical forecasting and analysis for the top management. KM based Learning allowsorganizations to avoid the risks by incorporating the risk knowledge in new product andprocess development in most cases rather than handling after it is encountered. KM enablespeople in the organization to understand the culture, live the culture, get influenced with theenvironment and apply knowledge to solve business problems and there by enables theorganization to manage its risks to the corporate assets effectively.
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