Social Capital and Communities of Practice at Caterpillar

From my understanding of the research done by Coleman, it seems that the basis for success of communities of practice at Caterpillar, and at other organizations, is social capital. The definitions of communities of practice and social capital are very similar, along with the benefits received by both. I do not necessarily see the Caterpillar article in a different light given the social capital theory, but it does provide greater insight into certain findings in the Caterpillar article.

I believe one important aspect presented by Coleman that relates to the effectiveness of the communities of practice (CoP) at Caterpillar is the trustworthiness of the structure. As the Caterpillar study noted, the most significant success factor in the CoP was that knowledge sharing was part of the organizational culture. The second and third most common reason given as success factors were: individuals were willing to share knowledge based on intrinsic motives; and the communities were actively supported by managers and experts. All of these reasons given as success factors can be associated with individuals viewing the CoP as trustworthy. They trust their organization in setting up the structure to effectively share knowledge and their co-workers to participate in the knowledge sharing.

Coleman also discusses information channels and norms as forms of social capital. I believe all three success factors presented above relate to both of these. Caterpillar provided a structure that facilitated the development of information channels. Caterpillar, along with employees who actively participated in the CoP, established norms of participating in knowledge sharing through corporate culture and continued support of the CoP. I believe that establishing the structure to share knowledge combined with actively encouraging participation in CoP are the ultimate determining success factors for any organization trying to establish an effective knowledge sharing environment.

Coleman next discusses social capital in the creation of human capital. Although Coleman does not look at human capital in the context of business, I think the distinction does not diminish the overall findings of the study when applied to the business setting. In fact, I believe the findings in Coleman’s study can be very useful in helping organizations that are trying to establish knowledge sharing platforms. As Coleman’s study established, the more social capital that was invested in the students’ education, in the form of active participation by the parents, increased the chances of success for the students. This highlights the importance of the organization actively participating in the knowledge sharing of its employees. As I stated previously, this was the top success factor given by employees of Caterpillar for the CoP. Simply setting up the infrastructure will not guarantee a successful knowledge sharing project.  The organization has to take an active role in establishing knowledge sharing as part of the overall organizational culture, and constantly reinforce the importance of knowledge sharing throughout the company. This investment in knowledge sharing will have a significant positive impact on the creation of human capital within the organization. My biggest takeaway from the Coleman study is that the more social capital that is invested, in any context, the more human capital is created; thus benefiting society as a whole.

Virtual CoP's at Caterpillar

1. Many knowledge management projects have failed to produce promised benefits. Why?

 

One of the main reasons knowledge management projects fail is that the organizational culture has not established the importance of knowledge sharing. For knowledge sharing to become a norm, the firm must communicate the importance of knowledge sharing to its employees. Another reason knowledge management projects have failed is the organization fails to provide a framework for employees to share knowledge, with rules and standards to guide employees. A final reason knowledge management projects fail is the lack of volunteers in the organization to act as managers and experts. This leads to the knowledge management project becoming disorganized and employees lacking confidence in the value of information contained within it.

 

2. What are the characteristics of a community of practice (CoP)? What are the pros and cons of a virtual CoP as contrasted with one that has its members meeting offline?

 

A community of practice is an informal group of individuals that share common areas of interest, professional credentials, or specific shared problems. The pros of a virtual CoP versus a traditional CoP are related to the increased knowledge sharing potential. When virtual CoP’s are used, it gives more individuals access to the knowledge and expertise of others. More access to the knowledge can lead to a larger variety of ideas and solutions to specific problems. This act of sharing information and ideas leads to a greater amount of knowledge contained within the virtual CoP than could otherwise be obtained through more traditional methods. Cons of a virtual CoP are the reluctance of individuals to contribute the same knowledge as they do in a traditional meeting and the ability of non-experts to contribute ideas to solve a specific problem.

 

3. Describe characteristics of Caterpillar's virtual communities of practice (or communities of knowledge sharing).

 

Caterpillar’s virtual communities of practice are contained within the company’s Knowledge Network, which is supported by a group of knowledge management technology experts. The Knowledge Network contains more than 600 online communities with more than 16,000 members worldwide. Most of the communities within the Knowledge Network were started by employees and relate to specific subjects or common professional activities. The typical community in Caterpillar’s Knowledge Network includes a community manager, who is elected by the team due to their experience with the subject. Communities also have one or more delegates, who are responsible for running the community in the absence of the community manager and performing certain community management activities. Experts are also contained within the typical community. They are individuals who have skills and knowledge in specific areas and participate by answering questions, posting knowledge, and reviewing information posted by others. The last element of the typical community is the subscriber. A subscriber is anyone who needs access to the information in a certain community and requests this access to view the knowledge.

 

4. What the a few selected major organizational benefits of Caterpillar's CoPs?

 

The four top organizational benefits identified by the research were: 1) the system helped new people integrate and become productive faster, 2) the system provides geographically dispersed units a place to work together and communicate better, 3) access to best practices, 4) access to a lessons learned database.

 

5. What are the critical success factors?            

 

Three critical success factors were identified in the study. The first is that knowledge sharing is part of Caterpillar’s organizational culture. This culture resulted in the majority interview respondents viewing their knowledge as a public good that belonged to the organization. The second critical success factor is that employees at Caterpillar are willing to share their knowledge based on intrinsic motives. Employees revealed their reasons for sharing knowledge were the need to establish themselves as experts, and the opportunity to mentor new employees and share their expertise. Interview participants also credited their willingness to share knowledge to the culture at Caterpillar. The third critical success factor is the knowledge sharing communities are supported by volunteer community managers and groups of active experts. It was noted that less successful communities did not have experts that actively participated.

 

6. What are major barriers?

 

The two major barriers to employees’ contributing to these communities were the employees’ reluctance to post information and increased security measures resulting in difficulties accessing the system. Employees’ reluctance to share information was not attributed to information hoarding in this study. Employees were more concerned that the information they shared would be viewed as not important, irrelevant, or inaccurate. They feared this could lead to others questioning their posts or competency in a specific area. The security measures that resulted in difficulties accessing the system were from various joint ventures of Caterpillar, contractors working for Caterpillar, and retired Caterpillar employees.

 

7. What lessons can be learned from Caterpillar by other companies?

 

 One of the most important lessons that can be learned by other companies from this study of Caterpillar is that the organization must emphasize the importance of knowledge sharing to its employees and create a framework that enables this knowledge sharing. This has a positive effect on every aspect of the knowledge management system. It will not only facilitate the sharing of knowledge, but make employees more likely to start communities, share information, and use the shared information in a constructive manner to help solve problems and expand the organizations overall knowledge base.

Sharing Global Supply Chain Knowledge

1. Why, in general, is knowledge sharing not a common practice in the work place? Identify and discuss the obstacles that keep people from sharing their professional (work) knowledge.

I believe that the primary reason for the lack of knowledge sharing in the workplace is due to individuals not wanting to lose their perceived competitive advantage and value to the firm. Most people identify themselves as separate from the organization for which they work and fear that the knowledge they bring to the company determines their relative value compared to other employees. Since employees view their knowledge as the key determining factor in their value to the firm, then it is logical that they would be apprehensive in sharing this with co-workers. I think a common belief is that once specific knowledge is shared with others in the organization, that individual becomes dispensable since the knowledge is now “knowledge of the entity”. This ties to the article since knowledge sharing benefits both parties in the long-term. Just like the hesitant suppliers, individuals will ultimately benefit from the knowledge obtained from co-workers, which increases their value to not only their current employer, but to all employers.

 

2. In global supply chain management, how may knowledge sharing create a win-win benefit for every entity involved?

As the article discussed, suppliers usually have more room for improvement than do buyers. When I first saw the title of the article, my first thought was that it would be adverse to a supplier to share knowledge outside of basic data with a buyer. As I read the article though, I was surprised to find that the suppliers were the ones who were actually benefiting more from the increased collaboration. The reasons for this, as the authors pointed out, were very logical from both the suppliers and buyers’ perspective. The buyer benefits because they are better able to meet their customers’ demands due to less downtime, higher quality products, and faster responsiveness to market conditions. Suppliers benefit because they are able to increase their operating efficiency by having more insight into customer demands, thus not producing inventory they will not be able to sell to buyers.

 

3. The article suggests that the benefit resulting from knowledge sharing may not be evenly divided among all participating parties. Identify an example, other than what's given in the article, to illustrate this situation. Discuss what can be done to effectively alleviate this situation.

I was not able to find an example of a specific company that benefited more than the other did from knowledge sharing in the supply chain. I did find a few articles that identified the benefits of both the supplier and the buyer, but they did not identify which one received the greatest benefit from the collaboration.  One example I found discussed how Chrysler collaborated with their suppliers in the 1980’s as they were experiencing difficulties. This resulted in the creation of the SCORE program (Supplier Cost Reduction ), which saved Chrysler billions of dollars. The article stated that Chrysler only asked their suppliers to pass 50% of the savings they received as a result of the program to Chrysler. All parties benefited from this program, but I am not sure who benefited the most. Long-term contracts and commitments are one way to help alleviate the situation where one party feels they will not benefit from the steps involved in setting up a collaborative relationship.

Source:

https://www.bcgperspectives.com/content/articles/sourcing_procurement_supply_chain_management_buyer_supplier_collaboration_roadmap_for_success/

bcg.perspectives  by The Boston Consulting Group

“Buyer-Supplier Collaboration : A Roadmap for Success”

August 21, 2013

By: Robert Tevelson, Jonathan Zygelman, Paul Farrell, Stefan Benett, Peter Rosenfeld, and Andreas Alsén

 

4. The article also contends that cultural difference does not significantly hinder knowledge sharing across borders. What do you think? Explain your opinion.

As the article states, “cross-cultural differences have always mattered less in business-to-business relationships than they have in business-to-consumer exchanges.” I believe this to be absolutely true, especially when dealing with multinational corporations as the authors’ study does. However, I do believe that cultural differences do have the potential to hinder knowledge sharing between certain countries. There are certain places in the world where the native culture has not had much exposure to cultural influences from other groups, which could impact their willingness to share knowledge. As a whole, I agree with the article that the worldwide cultural integration that has taken place over the past 20 years and the expanding reach of multinational corporations have made knowledge sharing across borders a non-issue.

 

5. Discuss the role of IT, esp. Internet-enabled IT, in global supply chain knowledge sharing.

I found a good article that focused specifically on how Web 2.0 technology has helped organizations, and discusses the integration of the buyer-supplier relationship. Technology has had an impact on every aspect of business since the introduction of the internet. I think knowledge sharing is the most significant product of the internet, and as worldwide IT capabilities increase, the knowledge sharing in the global supply chain will continue to influence these intercompany relationships. The article I read highlighted how companies are using Web platforms to manage their external relationships, including suppliers. Internet-enabled IT can make the collaboration discussed in the “Sharing Global Supply Chain Knowledge” article easier to achieve and at a lower cost. Platforms such as this blog are one method discussed in the Web 2.0 article I read that are being utilized by companies to facilitate knowledge sharing. The internet has given suppliers real-time access to their customers (buyers) information, which leads to better service and increased agility to meet demands.

Source:

http://www.mckinsey.com/insights/business_technology/how_companies_are_benefiting_from_web_20_mckinsey_global_survey_results

Survey|McKinsey Quarterly

“How companies are benefiting from Web 2.0: McKinsey Global Survey results”

Business Globalization

The article “The Fear Factor: Why Asian Firms Need to Take on the World” makes the argument for Asian companies to expand into international markets. The author points to Cannon as a success story of an Asian company expanding their business into other markets. Then, an argument is made that Asian firms could focus on domestic markets due to their size and the margins produced by American companies domestically. This argument is then rejected because Asian firms already face international competition that was not present when American companies began expanding. The author then discusses the difficulties Asian firms face in trying to reach new markets. This is due to the competition they already face from multinational firms, which also acts as a barrier to domestic growth. The author concludes that Asian firms will have a hard time being competitive without international expansion.

The article “Globalization's Two-Way Street: The U.S. Begins to Reciprocate” focuses more on the cultural impact of globalization. The author states "Globalization is usually thought of as a euphemism for Americanization,” highlighting the impact American culture has on consumer demand internationally. The influence that other cultures have on Americans is discussed, presented as "reverse globalization.”  Technology, mainly internet and television, are the main delivery mechanisms for this trend. The author highlights the availability of international news and television to an increasing number of consumers seeking them.

My view on the future of globalization trends is tied to aspects of both articles. I do think that the cultural impact internationally branded companies have gives them a distinct competitive advantage. As Mr. Gomes pointed out, this might not be what is in the long-term best interest for other countries and their distinct culture. There are certain aspects of American culture that I do not think are particularly good and could potentially be a negative influence on developing nations.  As has been constantly proclaimed to me in all of my business courses, the only objective of corporation is to increase shareholder value. Having stated this, I am not sure there is much that can be done to deter the influence these multinational corporations have as long as they are profiting in other markets. I would not think this to be negative if these entities acted as good citizens of the communities where they have operations. It is my opinion that many of these companies have a practice of exploiting developing nations due to a lack of regulations and their desperate need for jobs. I do think that this practice will continue to face scrutiny as it has in recent years, and this will impact how companies from developed nations expand into developing countries. This will increase the living standards in these developing nations, providing more discretionary income to the citizens, which increases demand for other products. The end result will be more companies entering these markets to provide the products and services and domestic companies expanding their offerings to compete. I think this will ultimately help Asian firms, especially those in poor and developing nations, gain some market share and possibly enable them to expand internationally if they are successful enough domestically.

Test post

Test post