Knowledge management within Tesco

Research Paper (undergraduate) 2012 24 Pages

Business economics - Information Management


Table of Content:

1. Executive summary

2. Literature review
2.1. What is knowledge? And what is tacit knowledge?
2.2. Competitive advantages of knowledge
2.3. What is knowledge based economy?
2.4. What is knowledge management?
2.5. What are knowledge sharing and its barriers?

3. Background of Tesco and range of products
3.1. Tesco’s business goals and objectives

4. KM in Tesco
4.1. Current method of Knowledge management in Tesco
4.2. The type and range of products to justify managing Tesco’s tacit knowledge
4.3. Develop a new framework for knowledge management in Tesco
4.4. Barriers and Critical success factors for new KM framework

5. Conclusion

6. References


Table 2: barriers of knowledge sharing based on the communication model

1. Executive summary

In contrast of classical economy in neoclassical economy, knowledge is one of the main factors of production. Since the mid-1980s, there has been an increasing recognition that “knowledge is a fundamental factor behind an enterprise’s success”. Scholar emphasises on invaluableness of knowledge and its dominant role among the other competitive advantages. They argue that knowledge causes sustainability in volatile environment. And many executives inaugurated methods of knowledge management as a complementary process of previous activities; such as total quality management (TQM), to grab some more competitive advantages among their rivals.

The first brick of structuring knowledge management (KM) is identifying the meaning of knowledge, information and data. These definitions and their differences are mentioned beneath the literature review. And one of the most novel and powerful KM framework is introduced which comes from communication science. In the field of communication science, there is one dominant theory for process of information sharing which is based on mathematics and statistical analyses. By interpreting this model to organisation’s routine activities, companies can use it as a basic framework for the whole process of knowledge sharing.

This model of knowledge sharing (communication model) has a better control over finding barriers among the other frameworks. More than dozens of barriers are declared in the scientific journals, but some of them may reveal within the particular case and by utilising this model it is possible to categorised barriers in manifold ways. Besides, communication framework has more clarity. This model elucidates relations among various parts of organisations, so finding critical success factors are easier than before. This model also supports other dominant theories in KM and KMS; such as knowledge creation, which this part will be discussed concisely.

Suggesting a new KM method is based on communication framework model. Tesco has significant IT infrastructure and data mining. The new KM framework utilise current method and also use current KM for justifying the knowledge. This is very important that knowledge should be justified. This new KM framework focuses on employee’s perception that is not exploited by other retailers in UK; therefore, it can become one the key competitive advantages for Tesco.

2. Literature Review

2.1. What is knowledge? And what is tacit knowledge?

What is knowledge? And what is a difference between data, information, and knowledge?

Defining knowledge is the first brick of understanding and building the whole structure of knowledge management. According to one of the pragmatic definition, knowledge is a continuum process that is start form collecting data, processing data to become meaningful to individuals, this processed data is called information; finally, utilising information in productive way (Armstrong, 2006). This productive utilisation is personal and often intangible. Knowledge, information, and data have significant differences and this difference can be understood with this definition.

Knowledge is produced by human act, knowledge is the residue of thinking, knowledge is created in the present moment, knowledge belongs to communities, knowledge circulates through communities in many ways, and new knowledge is created at the boundaries of old (Poston and Speier, 2005; Ryu et al., 2005; Sambamurthy and Subramani, 2005; Tanriverdi, 2005; Wasko and Faraj, 2005; Gottschalk, 2008). So, new knowledge stems from people and their activities on processed data, or information.

What is tacit knowledge?

Nonaka and Takeuchi (1995), based on Polanyi (1967), divide knowledge in two main categories which are tacit and explicit knowledge. Tacit knowledge is one that is understood by individual thoughts and activities; so it cannot be expressed verbally and directly and it is commonly understood as unstructured knowledge. Instead of tacit knowledge, explicit knowledge can be expressed directly and verbally. It is commonly known as structured knowledge (Jennex, 2008; Ein-Dor, 2008; Jones and Leonard, 2009).

Understanding the knowledge taxonomy and its categorisations is the key link to manipulate it and design effective knowledge management system for an organisation. Following table is one of the main taxonomy of knowledge which is also simple and popular one.

Table 1: Knowledge taxonomies and examples

illustration not visible in this excerpt

based on (Alavi and Leidner, 2001)

2.2. Competitive advantages of knowledge

Since the mid-1980s, there has been an increasing recognition that “knowledge is a fundamental factor behind an enterprise’s success” (Wiij, 1994; Dennis, Marsland and Cockett, 2008). Sunassee and Sewry (2003) declare that knowledge is the fundamental key to success in economy in contemporary era. Liebowitz (2000) mention that managers suppose the most important competitive advantage, which separates their organisations from other competitors, is knowledge. Scholar emphasises on invaluableness of knowledge and its dominant role among the other competitive advantages that causes sustainability in volatile environment (Argotea and Ingram, 2000; Lubit, 2001; Srivastava, 2001; Plessis, 2005; Wang, He and Mahoney, 2009).

Gupta, Sharma and Hsu (2008) assert that knowledge management complements and intensify other organisational activities such as total quality management (TQM) and business process re-engineering (BPR). Although various scholars assert the competitive advantages of knowledge, organisations have not amalgamated KM into their other progresses until a new economic definition has been introduced. This new economic has altered the whole industries significantly.

2.3. What is knowledge based economy?

Concisely, OECD (1996) describe the knowledge economy as economic activities and systems to establish, create, circulate, and apply of the knowledge and information as a main resource and major input of production.

In traditional macroeconomics, production is defined by Y=f (L, K, A, N), where L is the labour, K is the capital, A is the technology, and N is the institution. According to this function, various productions depend on different part of function (Chih-Kai, 2008). For example, in aquaculture and agriculture economies, the L (labours) plays a dominant role because of inactive technologies, lack of capital and etc. So in traditional economies, productions are based on primary resources.

Romer (1990) proposes that technological progress will appear with new knowledge formation; therefore, knowledge can be served as an important factor like as the other factors. The new era of economic has been started which is neoclassical economy . In neoclassical economy knowledge is one of the prime factors of production so investment in knowledge development can increase productive capacity and introducing new products. In this new theory economy should focus on knowledge and knowledge production to grow.

2.4. What is knowledge management?

Knowledge management is an interdisciplinary business model that deals with all aspects of knowledge in order to ameliorate learning in organisation and utilising latent knowledge for innovation. KM comprises of generating new knowledge, acquiring valuable knowledge from outside sources, using this knowledge in decision making, embedding knowledge in processes, products, or services, coding information into documents, databases, and software, facilitating knowledge growth, transferring knowledge to other parts of the organisation, and measuring the value of knowledge assets and the impact of them (Leonard, 1998; Skyrme, 1999, 2001; Gupta, Sharma and Hsu, 2008).

2.5. What is knowledge sharing and its barriers

Cummings (2003) at the most basic level define knowledge sharing is an activity that involves the processes through which knowledge is channelled between a source and a recipient, friends, a community or an organisation(s).

Since the new economic is defined based on knowledge, organisations endeavour to establish KM in their organisations. The most business leaders recognise the value of knowledge sharing and the need of possess and manage knowledge, but many of them are not able to obtain real benefit from their effort because of barriers that impede the process of knowledge sharing (Gupta, Sharma and Hsu, 2008; Lindsey, 2008). So, in order to have efficacious knowledge management system and obtain real benefit from it, organisations should focus on knowledge flows and barriers to knowledge sharing within their organisations. The first step is defining knowledge sharing.

Knowledge management is an interdisciplinary method. So scholars from various fields of science consider to its methods and its issues. Communication model is one of the recent models. By utilising it, organisations ponder on more details and barriers of knowledge flow. This model is unique one in the field of information and communication theory. It is based on a mathematical model of communication which is mentioned by Shannon and Weaver (1949). This model suggests a fundamental model on knowledge transfer that is shown in Fig 1.

Fig 1: knowledge sharing model based on mathematical model of communication

illustration not visible in this excerpt

Researcher previously focused on two major categories of sharing issues that one is how to motivate people to share their knowledge and the other one is focused on individuals who seek for knowledge (King, 2008).



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Knowledge Management Tesco



Title: Knowledge management within Tesco