You are on page 1of 17

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

Introduction of the knowledge management


Leaders of successful organizations are consistently searching for better ways to improve
performance and results. Frequent disappointments with past management initiatives have
motivated managers to gain new understandings into the underlying, but complex mechanisms
such as knowledge which govern an enterprises effectiveness. Knowledge Management, far
from being a management fad, is broad, multidimensional and covers most aspects of the
enterprises activities. To be competitive and successful, experience shows that enterprises must
create and sustain a balanced intellectual capital portfolio. They need to set broad priorities and
integrate the goals of managing intellectual capital and the corresponding effective knowledge
processes. This requires systematic Knowledge Management. With knowledge as the major
driving force behind the economics of ideas, we can expect that the emphasis on knowledge
creation, development, organization and leverage will continue to be the prime focus for
improving society.
Introduction of the WALLMART
In the past two decades Wal-Mart has been the leading domestic retailer. Its primary success has
come from its excellence in customer service, supply chain management, and ability to keep prices low.
The problem facing Wal-Mart is determining how to sustain its dominance in the industry. The underlying
strategic factors contributing to this problem are the United States retail market becoming very saturated
and Wal-Marts inability to be profitable globally.

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

In 1994 Wal-Marts store sales rates began to fall from the double digits to between four and
seven percent. With the U.S. retail market becoming more saturated, Wal-Mart knew that to sustain its
leadership it would have to expand globally. Wal-Mart entered Mexico with a joint venture and later
entered Canada, Puerto Rico, Argentina, Brazil, Japan, Korea, China and Germany. Despite Wal-Marts
numerous efforts, its international divisions profitability lagged well behind that of domestic operations.
This is mainly due to Wal-Marts inability to adapt to local cultures, maintain its excellence in customer
service, and maintain low prices.

Case Analysis
Knowledge management refers to the practices and strategies that a company uses in an
attempt to create distribute and enable adoption of strategic insights and specific experiences
(O'Leary, 2002). This knowledge can be embodied in either individual or organizational practices
or processes. Successful business firms and companies have committed hefty investments
towards development of internal knowledge management efforts. One such company is Wal-Mart
Stores Inc. which through this effort has emerged the worlds largest corporation.
Knowledge has to be organized for it to be useful and valuable. Depending on what use
will be made of it, knowledge should be organized differently. Addicott et al, (2006, identified
four dimensions to knowledge management. These are connectedness, completeness, perspective
and congruency. Creation of knowledge is brought about through recognition of gaps existing in
an organizations knowledge management practices. Choo, (2002), says that knowledge gaps can
stand in the way of problem solving and decision making and therefore hinder development of
new products. Choo developed a model for decision making which aids in knowledge

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

management. This model involves identifying and evaluating alternatives by processing all
information and knowledge collected up to date.
In its efforts at developing and nurturing insightful knowledge management skills, WalMart focuses on its organizational objectives which specifically include improved business
performance, innovation, competitive advantage as well as continuous improvement of business
operations and processes. The companys knowledge management incorporates such important
issues as formal apprenticeship, discussion forums, corporate libraries, mentoring programs and
professional training. The company also employs specific adaptations of such technologies as
expert systems, knowledge bases, group decision support systems, intranets, knowledge
repositories and also computer supported cooperative work.
Importance of knowledge management at the Wal-Mart stores
Wal-Mart stores have created an indelible mark in the retail business industry. The giant
chain store has an overwhelmingly effective knowledge management program that has enabled it
to retain its competitive advantage even at times of turbulent economic situations. The
corporations goals are being achieved simultaneously by strictly adhering to business aims and
balancing operations with the economic growth. Accordingly, economic gin as a result of
positive knowledge management strategies is achieved throughout. The corporations knowledge
management strategies have enabled it to focus its strategic business operations into cutting
operational costs and building up a value for its shareholders.

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

Knowledge can be classified into three broad forms, namely public, shared and personal
knowledge (Alavi, 2001). Public knowledge can be accessed through public domains such as
internet or books. Shared knowledge on the other hand refers to knowledge that is exclusively
held by employees and is only used in work. Personal knowledge is the least accessible
knowledge and is used mainly in work and daily life.
Through focused differentiation, the Wal-Mart has succeeded in cultivating enormous
productivity and making. The corporation is now the leading of its type in not only the USA but
the whole world itself. Nevertheless, the Wal-Mart stores have encountered numerous challenges
in their attempt at introducing various knowledge management strategies. Change management
analysis has greatly overridden the corporations organizational growth (Alavi, Maryam, Leidner
& Dorothy, 2001). Effective knowledge management at the Wal-Mart stores is largely
contributed by its ushering in of big financial gains on annual production. This important and
positive trend has reigned over all major stores associated with the corporation all over the
world. The Wal-Mart stores are now ideal for businesses, organizations and units at the modern
global age. Improved employee skills as one way of enhancing effective knowledge management
by the corporation has proved extremely successful in countering challenges encountered
threatening its overall mission (O'Leary, 2002).
The stores effective and reliable knowledge management skills have enhanced efficiency
in service delivery and customer care as well as development of great competition. The
corporation now seems success or failure of its business as a deliverable of staff productivity.
The managements intellectuality focuses on strengthening the staff by way of transformational

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

leadership. The company plans language to its employees loyalty, diligence and good conduct
and this has gone along way into ensuring long service in duty by the employees. Apt knowledge
management in the company has enabled it to satisfactorily solve all issues related to
organizational practices and conduct as well as make decisions and discover such issues as
animosity.
How the stores apply Knowledge Management in Human Resource Management
Human resource strategies refer to the ways in organizations and business firms select,
recruit, train and nurture their workforces for effective performance and delivery of services.
Different human resource strategies are implemented by different organization and much as this
would be different, they all achieve similar or almost same goals. Effective human resource
strategies have enabled Wal-Mart to implement policies for management of its vast human
resource. The application of effective human resource management strategies in the company is
not a new phenomenon and this has enabled it receive much recognition in the recent years all
over the world.
As an integral part of knowledge management, Wal-Marts human resource management
strategies are used chiefly to enable the organization and its vast array of branches manage their
managerial activities through coordination of employee related processes. The effective use of
these strategies has resulted to improved return on investments and has minimized the companys
financial risks. This has largely been achieved by integrating skilled workforce with the firms
existing work force. This is done in line with the organizations future business plans and
requirements for securing its future success and survival. For that case, the organization

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

implements human resource strategies taking into account the current state of its business
operations as well as its future goals and objectives (O'Leary, 2002).
As Wolpert, (2001) says, the success of an organization more especially in the field of
knowledge management is determined mainly by the kind of Human Resource management
strategies displayed. Accordingly, Human Resource management strategies involve the power of
an individual to persuade and inspire others towards attaining the objectives and goals of the
organization. Managers across all Wal-Marts branches motivate their workers to achieve the
objectives and goals of the organization and out-do their rivals. As leaders, they daily interact
with workers freely and offer directions personally and within teams, various departments as
well as divisions. The effective and sound management of Wal-Mart is a big strength to the
organization in achieving is objectives and remaining competitive (Wolpert, 2001)
Effective human resource management has contributed immensely to redefining
knowledge management at Wal-Mart stores. In its efforts to remain competitive, the company
has made substantial progress in relation to restructuring its long term objectives so that it can
stand abetter chance of achieving its goals. Just like any other business, the Wal-Mart Stores Inc.
has undertaken tremendous transformations with regard to adoption and implementation of the
best knowledge management strategies. As an organization, it has found it useful for it to learn to
manage its people and business operations in a well planned and coherent framework which is
well reflected in the business strategy. This way, all its branches have been able to ensure that all
aspects of personnel management are reinforced for the purpose of improving and developing the
performance of the business.

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

Zetie, (2003), argues that there is no any knowledge management strategy that can
transform the operations of a multi-branched business organization. A particular player an
industry will have to define and develop specific knowledge management strategies that are
unique to their aspirations, goals and performance objectives. Thus, they should take into
account the demands of other players and stakeholders as well (Zetie, 2003).
Majority of typical knowledge management strategies last for a relatively very short
while and may require to be re-evaluated on half-year or annual basis to ensure that the
strategies are both in line with the direction of the companys objectives and also take into
consideration the situation in the market and the world. Effective knowledge management
has helped Wal-Mart define its goals and also acts as a guide to help employees
acknowledge their importance in the company and how to link this with the companys
overall objectives.
Knowledge management with regard to communication and feedback at the Wal-Mart
At the Wal-Mart stores, knowledge management is made into use with regard to conflict
management and as such, a complex system of solving conflicts has been created. The
companys intellectual negotiation capability enables it to differentiate between principles and
discover prone areas and discard them. Ascending principles and self-esteem are two key issues
that have been addressed appropriately through subjective application of knowledge management
in enhancing effective communication in company (Zetie, 2003).
Managers at the Wal-Mart have succeeded primarily due to their ability to man oeuvre the
staff into undertaking positive transformations. The mangers are very intellectual in tackling

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

company targets and are able to dictate the decision making conclusions without necessarily
having to court grievances from some quarters of the staff. The management is always ready to
guide and protect the staff by providing articulate resources through which the staff and the
management can share their knowledge management experiences and the management is always
ready for unexpected issues raised by the staff. The environment at the Wal-Mart stores
encourages team work with great focus on future growth.
Through the use of knowledge management practices, the Wal-Mart stores has managed
to usher in a new form of employee motivation that focuses on employee retention till retirement
and gives annual rewards to best performing employees with great emphasis on appraisals as
well as potentiality in performance and productivity. For this reason, knowledge management at
the Wal-Mart has greatly been enhanced by managers who have always ensure that the staff are
well maintained and can get time offs and cash rewards which includes gift vouchers prioritizing
family needs. Production and performance has been achieved by the collective responsibility of
the staff and the company is now able to balance management roles with global trends in the
same industry (Wolpert, 2001).
The extent of knowledge management
Enhancing knowledge and talent management at the Wal-Marts intellect for quick
requirement has really widened its scope for global gains with respect to the corporations
targeted goals and tasks. At the Wal-Mart stores, assignments and projects are monitored
continuously. Checking operation progress thoroughly ensures high productivity and
performance for all staff. In the Wal-Mart jobs are always checked fully to ensure that staff and

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

employers blend for one target of productivity and targeted tasks. Continuous need for
productivity is essential for upheavals identification. Help in performance for staff has
significantly elevated the appraisal times thereby enabling constant blending between managers
and staff (Wolpert, 2001).
In enhancing the stores acceleration of performance, it has been extremely essential for it
to define its objectives. The companys staff is very competent throughout the branches and
subsidiaries and thus, they can accept any new applications with respect to knowledge
management. Performing required duties on all necessary management issues will result in
excellence in the firm thus motivating the corporations all staff to go up the ladder.
Promotions for staff annually by on the Job Training achieve a greater scope in
implementation of the productivity and performance of staff and manager. At any moment,
appraisal granting it necessary to staff by pay grade increases moral and motivation of all
employees. An updated current summation of staff will comfort staff due to their frequent
performances. It is quite satisfying for the staff at the Wal-Mart when they receive Awards and
cash gifts from the manager to enhance their morals. Perfect performance is derived by The
Manager of Wal-Mart selecting the best employee of the year annually to lift up the staff spirit
and motivation by issuing gift vouchers as rewards. The conclusion for the Wal-Mart is achieved
by a thorough management checked by performance. Need to check out behavioural perfection
for all components blending in together.
At the Wal-Mart stores, staffs are a priority with union factors being checked out
carefully, plus added value to stakeholders for stability. There should be no interference with

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

10

staff due to less staff levelling. The recruitment should administer to correct quality and quantity,
who will be accountants, admits, producing items, selling and managerial. Unions thus should
be more co-operational to staff and managers. Staff priorities family even with perfect packages
given with benefits, whose expectation and goal is deemed important to the firm. The staff are
motivated properly and always focused for positivist throughout, and not just qualifications
stashed away in office metal cabinets (Wolpert, 2001).
Wal-Marts concept map
The need to have a sound knowledge management system is one key driving force behind
Wal-Marts success. The corporation maintains and acts upon awareness in a potentially
changing scope and as such, the directions of many of its investment projects has been the major
compelling factors in determining which strategy to best adopt. In this regard, Wal-Mart
regularly has established and regularly assesses the scope of its knowledge management
Endeavour. The corporations experience has shown that failure to keep track of changes in
knowledge management can lead to adverse elicitation effort that may well go into directions
that do not serve the goals and aspirations of the business (Terreberry, 1968).
Wal-Marts actual elicitation of knowledge takes different forms and these can be
categorized broadly into those which are direct and the indirect. Direct methods of eliciting
knowledge occur in collaboration with expert programs and are very efficient in knowledge
management. These are chosen from a vast array of techniques some of which are based upon
interviews and analysis of familiar techniques. Indirect methods of eliciting knowledge are on
the other hand enhanced through study or use of relevant information resources as can be

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

11

identified by knowledge engineer. Knowledge management and elicitation process as such leads
to creation of concept maps that are included in the corporations knowledge models.
Strength of the knowledge management in WALLMART
Knowledge has to be organized for it to be useful and valuable. Depending on what use
will be made of it, knowledge should be organized differently. Addicott et al, (2006, identified
four dimensions to knowledge management. These are connectedness, completeness, perspective
and congruency. Companys knowledge management incorporates such important issues as
formal apprenticeship, discussion forums, corporate libraries, mentoring programs and
professional training. The company also employs specific adaptations of such technologies as
expert systems, knowledge bases, group decision support systems, intranets, knowledge
repositories and also computer supported cooperative work Creation of knowledge is brought
about through recognition of gaps existing in an organizations knowledge management
practices. Choo, (2002), says that knowledge gaps can stand in the way of problem solving and
decision making and therefore hinder development of new products. Choo developed a model for
decision making which aids in knowledge management. This model involves identifying and
evaluating alternatives by processing all information and knowledge collected up to date.
As an organization, Wal-Mart has found it useful for it to learn to manage its people and
business operations in a well planned and coherent framework which is well reflected in the
business strategy. This way, all its branches have been able to ensure that all aspects of
personnel management are reinforced for the purpose of improving and developing the
performance of the business.

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

12

Just like any other business, the Wal-Mart Stores Inc. has undertaken tremendous
transformations with regard to adoption and implementation of the best knowledge
management strategies.

At the Wal-Mart stores, knowledge management is made into use with regard to conflict
management and as such, a complex system of solving conflicts has been created.

Effective HRM has contributed in a large part to redefining knowledge management at


Wal-Mart stores. In its efforts to remain competitive, the company has made substantial
progress in relation to restructuring its long term objectives so that it can stand a better
chance of achieving its goals.

Through the use of knowledge management practices, the Wal-Mart stores has managed to
obtain a new form of employee motivation that focuses on employee retention till retirement and
gives annual rewards to best performing employees with great emphasis on appraisals as well as
potentiality in performance and productivity.
-

For this reason, knowledge management at the Wall- Mart has greatly been enhanced by
managers who have always ensure that the staff are well maintained and can get time offs
and cash rewards which includes gift coupons prioritizing family needs.

Recommendation
Wal-Mart will need to continually upgrade their competencies or develop new ones that
satisfy shifting customer/market requirements. Firms suffer losses at the hands of nimble

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

13

competitors not because they do not have strategic plans, but because their strategies do not
prepare them to anticipate and deal with competitive developments. Here the wall mart should
give emphasis knowledge management model to improve the knowledge management. Here, we
use a three-step knowledge management model learn before, learn during, and learn after. This
model is integrated into our approach and becomes an essential component for any repetitive
project or process. The immediate result of applying the Exceed Knowledge Management Model
is an accelerated learning curve, shared intelligence, improved performance, and higher levels of
innovation.
Accelerated Learning
Knowledge Management has always existed in some form or another. On-the-job
discussions, mentorship programs and professional training are all examples of informal
knowledge management systems. Our systematic three step approach to Knowledge
Management is:
Learn Before Einsteins advice on time management was to use 90% of available time
for planning, and 10% for execution. This principle is just applicable to project execution. The
more focused time is spent on pre-project learning, the more this will enable you to properly plan
each step of the project and work smarter. Pre-project learning is accomplished through team
sharing, Peer Assist sessions, and subject matter expert interviews.
Learn During Learning from others gives your team the knowledge to enter the
execution stage with confidence. However, you can never completely plan for the unexpected,

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

14

and there will be many steps and activities that, for better or worse, dont go according to plan.
Each of these deviations from the expected is an opportunity to learn.
We use After Action Reviews to identify activities that exceeded our expectations as well
as areas where we didnt make the mark. Actions are assigned and closed out quickly and the
lessons learnt are shared across the team.
Learn After Upon conclusion of any project, we facilitate a comprehensive post-project
assessment, conducted with the team. Any and all lessons learnt are collected, documented, and
distributed. Teams and others who can benefit from the identified learning experiences are
invited to a knowledge sharing session. This in turn forms part of their learning before and
enables accelerated learning across the organization
Here, as we know that, Wal-Mart will be able to sustain its leadership in the industry if they can
find a way to be profitable globally. The pressures in foreign countries for local adaptation and to lower
costs are high. To cope with these pressures Wal-Mart should obtain a transnational strategy. The
international strategy will enable Wal-Mart to adapt to local markets, locate activities in optimal locations,
and attain economies of scale, and increase knowledge flows and learning. For this, the wall-mart needs
to improve the knowledge management continuously.

Conclusion
Although knowledge management activities are all over the map in as far as Wal-Mart
stores is concerned particularity in regard to technology development and its subsequent
implementation, the stores have not yet fully reaped all the benefits that accrue from its

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

15

implementation. Recent analyses on the corporations pursuit of knowledge management


strategies have demonstrated on the relationship between technological investment and
improvement in business performance. All in all, the corporation seems to be faring quite well
with regard to the way in which it is implementing knowledge management not only as a way of
enhancing profitability and financial growth but also as a way of remaining competitive in a
turbulent world of businesses.
As of now, the company is contend with its leading position in the retail business on the
global scale but still has more work ahead to ensure that it retains this commanding position. The
realization of this will no doubt depend on the corporations ability to bolster up its knowledge
management strategies and also focus on offering services and products that meet its customers
diverse needs. Wal-Mart expects to enhance its future operations through the application of
modern knowledge management techniques. This will to a great extent result in improved
employee training, innovation, apt responsiveness and also a positive oriented organizational
culture.

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

16

References:
Choo, Chun Wei, (2002), Strategic Management of Intellectual Capital

and Orginzational

Knowledge. Oxford University Press.


Dalkir, Kimiz, (2005), Knowledge Management In Theory and Practice. Oxford: Elsevier
Butterworth-Heinemann.
O'Leary, D., "Technologies of knowledge storage and assimilation", Holsapple, C.W.,
Handbook on Knowledge Management 1: Knowledge Directions, Springer-

Verlag,

Heidelberg, 29-46, 2002.


Terreberry, S., 1968, "The evolution of organizational environments", Administrative
Science Quarterly, 12, 590-613.
Wolpert, D., 2001, "Computational capabilities for physical systems", Physical Review

E, 65,

1, 1-27.
Zetie, C., 2003, "Machine-to-machine integration: the next big thing?", Information
April 14, available at:
articleID=8900042.

www.informationweek.com/story/showArticle.jhtml?

Week,

KNOWLEDGE MANAGEMENT-A CASE STUDY OF WALLMART

17

Addicott, Rachael; McGivern, Gerry; Ferlie, Ewan (2006). "Networks, Organizational


Learning and Knowledge Management: NHS Cancer Networks". Public Money &
Management