Knowledge management strategies and practices at Tata Steel

¶ … Knowledge Management at Tata Steel

In the post-Age of Information, it may be difficult for some managers to recognize the difference between information and knowledge, and why it is important to management the latter when there is an abundance of the former. One company that has modeled the way for businesses of all sizes and types in the area of effective knowledge management is India's Tata Steel. For more than a century, this enterprise has been an innovator that has been lauded time and again for its enlightened management practices in general and more recently its knowledge management practices in particular. To determine what this company is doing right where others are looking for answers, this paper provides a critical analysis of the approach to knowledge management at Tata Steel. Important findings concerning these issues are presented in the conclusion.

Review and Discussion

Irrespective of the industrial or commercial setting that is involved, it has become widely recognized that knowledge management practices are among the most innovative and significant business management concepts to be advanced in recent years (Motwani 2006). Such accolades have been directed at other management fads, of course, but knowledge management is different because it takes advantage of the tacit knowledge that already exists within the firm. In fact, a growing body of research suggests that Tata Steel has succeeded in creating value for all of its stakeholders by practicing knowledge management techniques that have improved organizational effectiveness, delivered customer value, and improved product innovation and delivery rates (Motwani 2006).

In the first place, the corporate culture established by the top leadership at Tata Steel (hereinafter alternatively "the company" or "Tata") makes it clear that knowledge management is the watchword and all employees are expected to share and seek the knowledge needed to achieve a competitive advantage in an increasingly competitive marketplace (Kumar 2004). The company's 2002-2003 annual report, for example, stresses that, "We recognize and endorse the importance of knowledge of a source of innovation and competitive advantage. We wish to leverage all our associations within and outside the Company to harness the ideas and provide the means for exchanging and growing knowledge" (cited in Kumar 2004, 2).

While this statement may appear nebulous and directionless to industry outsiders, but it would seem that the company's top leadership does in fact know how to leverage its knowledge management approach in profit-generating ways. Indeed, the company's managing director made it clear that they would never rest in their quest for the optimal knowledge management approaches, which suggests the employees at Tata should make this one of their top priorities regardless of their position or capacity.

Because time and knowledge are money, the company has taken steps to wring every last bit of knowledge possible from its far-flung operations to identify best practices that can be applied to its businesses as well as its supply chain partners in ways that are reflective of the codification of knowledge management approach. This approach to knowledge management is termed the codified knowledge management strategy or simply codification (Jahn, 2013). Similarly, Khanna and Mitra (2005, 20) report that knowledge management at Tata Steel was an early focus on top management, and steps were taken to ensure that all knowledge from its far-flung operations was captured and shared to the maximum extent possible. Interestingly, the company took no half-measures with its knowledge management (KM) initiative and participation by all employees was obligatory and was directly tied to performance appraisals (Kumar 2004). As the company gained expertise in managing knowledge in its own operations, it has increasingly sought to apply these practices to and with its supply chain partners (Kumar 2004).

This level of knowledge management expertise, though, did not just fall out of the sky but has been the legacy of the company's founder, Jamshed Nusserwanji Tata (D'Costa 1999). In fact, Singh (2008, 118) emphasizes that Tata Steel is well renowned for its proven track record of success. The company's consistent track record of success has been attributed to its KM approach which, in reality, is fairly straightforward in its focus on linking knowledge with money. According to Singh (2008, 119), the company's core values are a legacy of its founder, and focus on ensuring that all stakeholders are regarded as important and valuable, and essentially irreplaceable.