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BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCE

Work Integrated Learning Programme Division

M.S. Consultancy Management

Second Semester

Course : KNOWLEDGE MANAGEMENT

Assignment No : Ist

Submitted by : GAURAV JAIN

ID. No. : 2012HZ58049

Signature:

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S.No Particulars Page No.

1 Assignment 3-5

2Do you agree that the consultant’s observation that problem of Cablex is linked to knowledge management? Please justify your answer in brief. 6-7

3What is the core knowledge to Cablex business? Was moving to four wheeler cables and engine part manufacturing a correct decision? Please justify your answer in brief

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4Why were resignation and retirement a problem in Cablex? What could be done about this? 9

5Has technology change impacted the way people work and perform task at Cablex? How has this influenced the way Cablex operate? 10

6

Identify the reasons for Gyani’s concerns on leadership. How Smart’s leadership has affected the business. Please suggest what major changes Smart can bring in his leadership style to improve Cablex company wide operations?

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BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE, PILANI

DISTANCE LEARNING PROGRAMMES DIVISION

M.S. Consultancy Management in collaboration with CDC, New Delhi

SECOND SEMESTER 2012-2013

Course Number : CM ZG542

Course Title : Knowledge Management

Date of Submission : 10 Feb 2013

Assignment –I

Cablex Industries liked to be seen as itself a bastion of tradition. The original owner, Jagan, had

maintained close control over the business for 25 years as it developed a number of cables for two

wheelers. Until he retired in 1995, Jagan knew the names of every one of the 250 staff members and

their families. He made all decisions about products, clients, and employment conditions, even signed

every leave application. Jagan knew all dealers and major two wheeler manufacturers personally.

Jagan was Cablex Industries. He knew his industry and business very well. Cablex’s business

comprising of two wheelers cables consisted of manufacturing factory, packaging division and

distribution, sales and office. Cablex had maintained the same business focus and systems for a long

time. Sales were steady and reliable- after all, from 1970 to 1995- every Indian middle class dream

was to own a two wheelers. Auto spare market was booming.

Employees were proud to tell friends that 95% of staff had been with the company for over 20 years.

They boasted of their well developed systems and everyone had complete control on their work.

Everybody has had a particular role, and there was a strong informal understanding of where each

fitted. Everyday was predictable, and the level of work was comfortable. No one needed to think too

hard, or consider how things could be done differently.

Jagan’ son Smart took over the reins of Cablex on his retirement. Smart was a MBA who believed

that his father ran Cablex like a welfare state and felt that with changes company can become the

market leader in auto part Industry. Jagn died of heart attack within three months of his retirement.

The death of Jagan caused major upheaval. Smart started to hire expensive industry managers, and

started acquiring new businesses by diversify from two wheeler cables to four wheelers cables and

engine components manufacturing. The company expended to 1000 employees in two years. The

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number of cable products was reduced, and the output of each product was increased by more

automation and computer controlled machines. Several teams were responsible for building similar

products, and bonuses were introduced for higher performance. This created great stress among old

hands as they had never worked in competitive work environment earlier. A new centralized

computer based management information systems was introduced in all functions and departments.

The introduction of computer into all areas caused additional stress for those who were in company

for long. They did not know basics of computers and were being asked to enter their work time, leave

applications and supervisory records online. Stress was very high and taking a toll in accidents,

absenteeism and turnover.

Within two years, Smart found that 100 of original 250 staff had retired or voluntarily retired or

resigned. They indicated that they could not see where they fitted now and were feeling too over

whelmed with the rate of change. Many quoted they could not sleep at night, because they were being

asked to learn too quickly. In addition a number of newly acquired people were also resigning. Many

were commenting that it was too hard to integrate with the Cablex old People. They felt that new staff

is not been provided any hand holding and support from old timers. Old timers when confronted that

they cannot share much as everything was in their brain and it is too difficult to explain. Besides,

there was not enough time to stop and natter when they themselves had so much to do and learn in

their new work roles. Many key people found new jobs and left, often taking several other good

members of team with them to competitors.

Smart at first was happy that old timers are leaving and fresh blood coming in company. However, he

found that defect rates were increasing. Major customers have started complaining on product quality.

Bajaj Auto cancelled an order of cable SX-4 due to poor quality. Teams started blaming people who

had left Cablex. Records could not show reasons for defects. Cost started going up and productivity

reduced despite the bonus scheme. Things were slipping. Desperate, Smart hired a consultant Gyani

for advice.

Gyani spent some time interviewing a range of current and employees who had left the organization,

looking at the systems in operations and considering thee needs of the organization. He is of the

opinion that Cablex need to introduce better knowledge management at all levels of its operation,

from the strategic positioning to the basic systems and processes which were followed. In particular,

he suggested the need to shift the culture to a more collaborative focus, and also suggested that

leadership was a significant challenge.

Questions

1. Do you agree that the consultant’s observation that problem of Cablex is linked to knowledge

management? Please justify your answer in brief.

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2. What is the core knowledge to Cablex business? Was moving to four wheeler cables and engine

part manufacturing a correct decision? Please justify your answer in brief.

3. Why were resignation and retirement a problem in Cablex? What could be done about this?

4. Has technology change impacted the way people work and perform task at Cablex? How has this

influenced the way Cablex operate?

5. Identify the reasons for Gyani’s concerns on leadership. How Smart’s leadership has affected the

business. Please suggest what major changes Smart can bring in his leadership style to improve

Cablex company wide operations?

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ANSWER 1

Cablex is a company with a stronghold of tradition under the strong guidance of the owner Jagan

Cablex had high level of loyalty from the employees (95% of them been with the company for 20

years). Change of leadership after the death of Jagan created disruption and Collaboration was a very

big challenge. Smart believed challenging economic conditions may adversely impact the demand and

pricing for the products as well as limit Cablex’s ability to grow as a result he started acquiring new

businesses by diversify from two wheeler cables to four wheelers cables and engine components

manufacturing. His thought process was influenced because of the rapid transition from traditional

manufacturing to highly specialized and competitive manufacturing both within the organization and

outside the organization.

According to the definition of Knowledge management ( KM ) it is a process that helps organizations

to identify, select, organize, disseminate and transfer important information and expertise that are part

of the organisation’s memory. A functioning knowledge management system follows six steps in a

cycle which works as follows:

When Jagan was alive he was the face of Cablex and tightly controlled the company and knew the

industry and business very well. As a leader and a visionary he believed in the increasing demand of

the two wheeler industry hence concentrated on the same line of business and maintained the same

processes till his death. He did not identify or forecast the changing business environment and the

challenges which were about to come. During his time the role of knowledge was limited rather

ownership of physical resources equated wealth and power. In short there was complete absence of

Knowledge Management during his tenure. Attrition rate was very low and the employees boasted of

their well developed systems and everyone had complete control on their work.

But Jagan ignored the fact that knowledge is never static. It continually gets refined and

upgraded. In a good knowledge management system knowledge is never finished because the

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environment changes over time and knowledge must be updated to reflect these changes. But at

Cablex everybody had a particular role, and there was a strong informal understanding of where each

fitted. Every day was predictable, and the level of work was comfortable. No one needed to think too

hard, or consider how things could be done differently. Technological up gradation initiatives by

Smart at Cablex was neither planned according to the skill set of the existing employees nor were the

previous employees ready for such speedy adoption. Following the KM cycle Smart ignored the

first four phases and expected the employees to adapt the changes while his father Jagan did not

maintain written records or manuals of the processes so that if there was a new entrant in the

system it would have been easier for him to understand the way Cablex worked. More

importantly there should have been knowledge creation from the beginning but absence of it

made the conditions more vulnerable.

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ANSWER 2

The core knowledge of Cablex business was in cables for two wheelers. After Jagan’s death the

company diversified into four wheeler cables and engine part manufacturing. According to me Cablex

was moving into 21st century, where ‘Change is the only constant’. In the rapidly changing business

environment, survival itself is a challenge. There are innumerable areas as stated below where this

change is visible:-

a) Larger varieties of products and services. Choices are almost limitless.

b) Demanding customer. With innumerable choices available

c) Shorter product life cycle

d) Rapidly changing technology.

e) Products are becoming increasingly complex

f) Globalization

g) Increasing Competition

Smart’s thinking was appropriate as far as the organizational growth was concerned but he failed to

integrate the systems and processes which laid the foundation of Cablex. He failed to identify the

goals for Cablex unlike his father does and failed in utilizing the skills and expertise.

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ANSWER 3

The resignation and the retirement of employees at Cablex can be attributable to the following

reasons:-

Organizational culture was not a collaborative one especially after the death of Jagan.

Unwillingness of old stuffs to share knowledge with the new professionals.

No documentation as transfer of tacit knowledge is easier said than done.

Forced adaptation of the competitive environment.

Forced technology adoption eg. Use of computer systems and changes in production

techniques.

Difficult for new stuffs to locate source of expertise.

Stress was very high and taking a toll in accidents, absenteeism and turnover.

To overcome the retirement and resignation problem at Cables Smart can consider the following

suggestions:

I. Formal & Informal ways of communication

II. Utilization of knowledge and expertise of senior employees

III. Transfer of knowledge through documentation which was not done prior to the death of Jagan

IV. Training for previous employees

V. Employee motivation programmes

VI. Knowledge creation

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ANSWER 4

After Jagan’s death Smart started acquiring new businesses for diversification. Although the company

expended but the number of cable products was reduced, and the output increased by more

automation and computer controlled machines. Heavy bonuses were introduced for higher

performance resulting in great stress among old hands as they had never worked in competitive work

environment earlier. The introduction of computer into all areas caused additional stress for those who

were in company for long. Unlike Jagan, Smart was not successful in identifying the goals and was

inefficient in utilizing the skills and expertise of previous employees. Stress was very high and taking

a toll in accidents, absenteeism and turnover. This had two fold influences on the overall culture at

Cablex.

Absence of training resulted in skill set mismatch: Technological up gradation at Cablex was

neither planned nor the previous employees were ready for such speedy adoption. The implementation

of this up gradation resulted in information overload. Although these technological advances made the

retrieval, production and distribution of products so much easier than in earlier periods. This

acceleration of change should have been accompanied by an increase in the information needed to

keep up with all the developments leading to psychological, physical and social problems which

Smart did not address.

Secondly it was obvious that too much change puts strain on people and company as a whole

leading to a set of severe physical and mental disturbances. Just like people exposed to war or

disaster may develop a nervous breakdown ("shell-shock"), people exposed to the rapid changes of

modern life may develop a state of helplessness and inadequacy.

The way change affects the physical state is evidently through its effects on mental state. The

emotional reaction associated with change is first of all arousal. This a priori neutral state may

develop either into a positive feeling, as when novelty elicits curiosity, excitement and wonder, or into

a negative one, as when lack of understanding triggers confusion, tension and fear. However, the

longer such arousal is sustained, the more likely it is that interest will wear off and fatigue will set in.

If a person does not manage to find an adequate response to the novel stimuli, he or she will

experience loss of control and distress. This distress resulted in high attrition and retirement of senior

workers.

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ANSWER 5

Contrary to the leadership skills of Jagan his son Smart was aggressive and had a different way of

thinking. Gyani’s concern on the leadership of Smart was natural because of his:

I. Inability to identify the goals

II. Inefficiency in utilizing the skills and expertise

III. Difficulties in changing the organization environment, resulting in

Inconsistent system

Different teams working differently

Stress among the stuffs due to competitive environment.

Unavailability of expertise due to unwillingness

Decreased recognition of the profitable value of employee knowledge

Proposed changes in Smart’s Leadership style: