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THAPAR UNIVERSITY

Knowledge & Technology Audit Report: Scientific Instruments, Ambala


Submitted by 1G2

1G2 members: Bhavya Pabby Bhupinder Kumar Ankur Verma Amit Kalaniya Abhinav Parmar

Table of Contents
Acknowledgement................................................................................................................................... 3 Need of the project ................................................................................................................................. 4 Conceptual background on the 5 KMPs ................................................................................................... 6 KMPs and Information Management ................................................................................................... 6 KMPs in Human Resource Management .............................................................................................. 7 KMPs in R&D ..................................................................................................................................... 10 KMPs & Strategy................................................................................................................................ 11 KMPs in Intellectual Property Management ....................................................................................... 11 Audit details .......................................................................................................................................... 12 Porters 5 force analysis on the scientific instruments industry .............................................................. 13 Bargaining power of customers ......................................................................................................... 14 Bargaining power of suppliers............................................................................................................ 15 Competitive rivalry within the industry............................................................................................... 15 Threat of new entrants ...................................................................................................................... 15 Threat of substitute products ............................................................................................................. 16 Research Methodology.......................................................................................................................... 16 Findings & Conclusion ........................................................................................................................... 17 Limitations of the Study ......................................................................................................................... 18 References ............................................................................................................................................ 19 Appendix.20

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Acknowledgement

At the outset of this report, we would like to thank our guides and professors, Dr. Piyush Verma & Dr. Harsh Samalia for their direction and support which was a pre requisite to the completion of this project. We would also like to extend our gratitude to the persons who extended us their coordination and participated in this knowledge and technology audit. The participation of these people helped us get a better insight into the functioning of the scientific instruments industry in Ambala Cantt.

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Need of the project

Knowledge has long ago been recognized as an important asset for sustaining competitive advantage. Recently, the use of information technologies within an organization has been identified, by many companies, as an important tool for managing or sharing organizational knowledge in order to improve business performance.

According to Grant, the knowledge-based view is founded on a set of basic assumptions. First, knowledge is a vital source for value to be added to business products and services and a key to gaining strategic competitive advantage. Second, explicit and tacit knowledge vary on their transferability, which also depends upon the capacity of the recipient to accumulate knowledge.

Third, tacit knowledge rests inside individuals who have a certain learning capacity. The depth of knowledge required for knowledge creation sometimes needs to be sacrificed to the width of knowledge that production applications require. Fourth, most knowledge, and especially explicit knowledge, when developed for a certain application ought to be made available to additional applications, for reasons of economy of scale.

People can use their competence to create value in two directions: by transferring and converting knowledge externally or internally to the organization they belong to. When the managers of a firm direct the efforts of their employees internally, they create tangible goods and intangible structures such as better processes and new designs for products. When they direct their attention outwards, in addition to delivery of goods and money they also create intangible structures, such as customer relationships, brand awareness, reputation and new experiences for the customers.

Effective knowledge management, using more collective and systematic processes, will also reduce our tendency to repeat the same mistakes. This is, again, extremely costly and inefficient. Effective knowledge management, therefore, can dramatically improve quality of products and/or services. Better knowing our stakeholder needs, customer needs, employee needs, industry needs, for example, has an obvious immediate effect on our relationship management.
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So it is very easy to see how effective knowledge management will greatly contribute to improved excellence, which is to:

a) dramatically reduce costs

b) provide potential to expand and grow

c) increase our value and/or profitability

d) improve our products and services

e) respond faster The strategies, methods and tools of knowledge management will undoubtedly change, but the timeless principles will, of course, remain unchanged.

And to survive and succeed in the new global knowledge economy, organizations must become far more effective and more productive. Organizations must always strive for the best relations and highest quality.

To do that, the successful organizations and individuals will not allow themselves to keep reinventing the wheel or repeating the same mistakes. This is so costly that good leaders will simply not tolerate, nor be able to afford, such cost inefficiencies caused by knowledge gaps and bad knowledge flows. [1]

Also, technology and innovation are core driving parameters of organizational performance. Some of the reasons these are becoming important are:

Technology is changing fast, new products come from new competitors Fast changing environment, product lifetimes shorter, need to replace products sooner
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Products are increasingly difficult to differentiate Customers are more sophisticated, segmented and demanding, and expect more in terms of customization, newness, quality and price

Customers have more choice Apparently separate technologies come together Markets forming and changing fast With markets and technology changing fast, and good ideas quickly copied, there is continual pressure to devise new and better products, processes and services faster

Conceptual background on the 5 KMPs

KMPs and Information Management

The information technology infrastructure should provide a seamless "pipeline" for the flow of explicit knowledge through the 5 stages of the refining process to enable

capturing knowledge, defining, storing, categorizing, indexing and linking digital objects corresponding to knowledge units,

searching for ("pulling") and subscribing to ("pushing") relevant content, presenting content with sufficient flexibility to render it meaningful and applicable across multiple contexts of use.

Information technologies such as the World Wide Web and Lotus Notes offer a potentially useful environment within which to build a multimedia repository for rich, explicit knowledge. Input is captured by forms for assigning various labels, categories, and indices to each unit of knowledge. The structure is flexible enough to create knowledge units, indexed and linked using categories
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that reflect the structure of the contextual knowledge and the content of factual knowledge of the organization, displayed as flexible subsets via dynamically customizable views.

Effective use of information technology to communicate knowledge requires an organization to share an interpretive context. The more that communicators share similar knowledge, background and experience, the more effectively knowledge can be communicated via electronically mediated channels. At one extreme, the dissemination of explicit, factual knowledge within a stable community having a high degree of shared contextual knowledge can be accomplished through access to a central electronic repository. However, when interpretive context is moderately shared, or the knowledge exchanged is less explicit, or the community is loosely affiliated, then more interactive modes such as electronic mail or discussion databases are appropriate. When context is not well shared and knowledge is primarily tacit, communication and narrated experience is best supported with the richest and most interactive modes such as video conferencing or face-to-face conversation. [2]

KMPs in Human Resource Management

There are several roles that can be played by HR in developing knowledge management system. First, HR should help the organization articulate the purpose of the knowledge management system. Investing in a knowledge management initiative without a clear sense of purpose is like investing in an expensive camera that has far more capabilities than you need to take good pictures of family and friends. Too often, organizations embrace technologies to solve problems before they've even identified the problems they are trying to solve. Then, once they realize the error, they find it difficult to abandon the original solution and difficult to gather the resources needed to invest in a solution to the real problem. Effectively framing the knowledge management issue, before deciding on a course of action, is a crucial prerequisite for success.

Second, as a knowledge facilitator, HRM must ensure alignment among an organization's mission, statement of ethics, and policies: These should all be directed toward creating an environment of sharing and using knowledge with full understanding of the competitive
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consequences. Furthermore, HRM must nourish a culture that embraces getting the right information to the right people at the right time.

Third, HRM should also create the "ultimate employee experience." That is, by transforming tacit knowledge into explicit knowledge through education, organizations must build employee skills, competencies, and careers, creating "bench strength." This combines the traditional training and development responsibilities of HRM with the new responsibilities of human capital steward: using all of the organization's resources to create strategic capability. Disney's new staff orientation, which emphasizes the firm's mission, values, and history within a context of the "magic kingdom" experience, is an example of this process of making tacit knowledge more visible.

Fourth, HRM must integrate effective knowledge sharing and usage into daily life. That is, knowledge sharing must be expected, recognized, and rewarded. For many individuals and organizations, this reverses the conventional relationship between knowledge and power. Often, the common pattern was to hoard knowledge because it made the individual more valuable and more difficult to replace. Effective knowledge management requires this trend to be overturned and requires those with information to become teachers and mentors who ensure that others in the firm know what they know. Teaching must become part of everyone's job. Clearly, for such a cultural shift to take place, HRM must overhaul selection, appraisal, and compensation practices. Human resource management has the capabilities for creating, measuring, and reinforcing a knowledge-sharing expectation.

Fifth, HRM must relax controls and allow (even encourage) behaviors that, in the clockwork world of industrial efficiency, never would have been tolerated. For example, conversations at the water cooler were viewed in the past as unproductive uses of employee timeafter all, employees were not at their desks completing specified tasks detailed in their job descriptions. In the knowledge economy, conversations inside and outside the company are the chief mechanism for making change and renewal an ongoing part of the company's culture.

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As another example, consider individuals in organizations described as "gossips," who would rather talk than work. Frederick Taylor's industrial engineers would have eliminated these gossips from workplaces in the early twentieth century, since they did nothing that was perceptibly valuable. However, in the knowledge economy, if the conversations are relevant to the firm's strategic intent, these same people may be described as "knowledge brokers": those individuals who like to move around the company to hear what is going on, sparking new knowledge creation by carrying ideas between groups of people who do not communicate directly. If the topics serve organizational needs, these individuals play a role similar to bees that cross-pollinate flowers and sustain a larger ecosystem.

Organizations should selectively recognize and reward, rather than universally discourage and punish, these types of behaviors. Clearly, not all conversation is productive and constructive. Human resource management still must play a role in discouraging gossip that undermines, rather than promotes, a learning community. Human resource management will need to adjust both its own perspective (from rule-enforcer) as well as that of managers and others who hold outdated notions of what is "real work."

Sixth, HRM must take a strategic approach to helping firms manage email, instant messenger, internet surfing, and similar uses of technology. Clearly, the Internet has a role in generating and disseminating knowledge, and therefore is an integral part of knowledge management. A related issue is HRM's role in helping firms manage the distancing consequences of electronic communication. As employees increasingly rely on technology to communicate, they lose opportunities to develop the rich, multifaceted relationships that encourage the communication of tacit knowledge. Human resource management can contribute to developing social capital by sensitizing employees to the negative consequences of excessive reliance on electronic media and by creating opportunities for face-to-face contact.

Seventh, HRM must champion the low-tech solutions to knowledge management. Although it should not ignore the high-tech knowledge management tools, HRM contains the expertise to develop low-tech knowledge management strategies. For example, when the team that developed the Dust buster vacuum tool was created, they were given a "war room" in which they could
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spread out their materials and leave sketches, models, notes, and so on plastered on walls and throughout the workspace. These visible outputs of their thinking processes helped create a shared context for their efforts and turned the room into a truly collaborative workspace.

Some Asian firms, such as Dai-Ichi, create special rooms (with green tea and comfortable places to sit), where researchers are expected to spend a half-hour daily, telling whomever they meet about their current work. [3]

KMPs in R&D

Although many of the underlying assumptions of KM are not new, the formal study and application of KM in R&D organizations is a relatively young discipline. The goal of the study was threefold:

Identify a model for knowledge flow in the R&D process that could be a visual point of contact for discussions around the key issues R&D managers face and the ways to manage knowledge flow.

Highlight aspects of KM that are unique or especially important to the process of R&D. Catalog "better practices" that R&D managers use to facilitate knowledge flow and the knowledge creation process.

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KMPs & Strategy

Strategic plans are developed and deployed to close the gap between what a firm can do and must do to be competitive. Knowledge strategies are devised to close the gap between what a firm knows and what a firm must know to be competitive. A knowledge strategy defines the actions necessary to ensure the organisations knowledge assets meet organisational objectives and support its strategies. In line with competitive strategies, knowledge strategies provide goals, a unified vision, a base for decision-making, a communication tool, and a foundation for consistent operations. A knowledge strategy includes actions or options to: determine which knowledge assets are required; acquire or develop new knowledge assets; make major changes to existing knowledge assets; maintain the existing knowledge assets; make the knowledge available; and, dispose of redundant knowledge assets

KMPs in Intellectual Property Management

Intellectual property rights as a collective term includes the following independent IP rights which can be collectively used for protecting different aspects of an inventive work for multiple protection: Patents Copyrights Trademarks Registered ( industrial) design Protection of IC layout design Geographical indications

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Protection of undisclosed information

Intellectual property is an aspect of property rights which augments the importance of know how assets. Knowledge assets are often inherently difficult to copy; moreover, like physical assets, some knowledge assets enjoy protection against theft under the Intellectual property laws of Individual nation states. In advanced nations, these laws typically embrace patents, trademarks, trade secrets and copyright. There are many other dimensions along which knowledge could be defined or along which innovations could be classifieds. However, the only other key dimensions to be identified here is whether or not the knowledge in question enjoys protection under the intellectual property laws. Patents, trade secrets, trademarks provide protection for different mediums in different ways. The strongest form of intellectual property is patent. A valid patent provides rights for exclusive use by the owner, although depending on the scope of the patent it may be possible to invent around it, albeit at some cost. The growth of IT has also amplified the importance of intellectual property and has injected intellectual property into new contexts. E.g. it is not uncommon to discover the foundations of corporate success for wholesalers and retailers buried in copyrighted software and in information technology supporting order entry and logistics.

Audit details
Industry assigned: Scientific Instruments Region: Ambala Cantt Organizations that participated in audit: Labomed Microscopes Shiv Dial Sud & Sons Kanwaljit Scientific instruments Quality scientific & mechanical works International Biological Laboratories

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Porters 5 force analysis on the scientific instruments industry

Porter's five forces analysis is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit. Three of Porter's five forces refer to competition from external sources. The remainders are internal threats.

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Porter referred to these forces as the micro environment, to contrast it with the more general term macro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally, requires a business unit to re-assess the marketplace given the overall change in industry information. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. Firms are able to apply their core competencies, business model or network to achieve a profit above the industry average. Porter's five forces include - three forces from 'horizontal' competition: threat of substitute products, the threat of established rivals, and the threat of new entrants; and two forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of customers.

Bargaining power of customers

There are 2 types of customer segments that the scientific industry segment in Ambala serves: one, the domestic segment and the other, is the export market. For the export market, manufacturers of scientific instruments sell their goods through traders who get export orders from mainly US and Europe. Since, threat of backward integration is low from the traders side as they require substantial working capital and expertise to do so, manufacturers concentrate most of their business on these segments (export) whenever they can as they can dominate. The domestic market, on the other hand is relatively fuller and more competitive as consumers transact in domestic currency and have more options to choose from (102+ firms). This does not leave the manufacturers with much scope for profit in the domestic segment as compared to the export segment. So in the export market the bargaining power of customers is relatively lower than the domestic segment.

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Bargaining power of suppliers

Suppliers of raw material for manufacturing instruments include ceramic, plastics and mild steel manufacturers. These suppliers typically are large scale manufacturers that serve whole clusters of scientific instruments industry located elsewhere in India. Also, apart from certain grades of these materials they also manufacture other grades of steel, plastic and ceramic that are used for surgical instruments industry. Due to this scale of operations, suppliers have a better say on the prices of raw materials they deliver and such SMEs are not wholly needed for their operations as well. It makes little difference to the supplier whether he gains or loses one or two SMEs. Hence, bargaining power of suppliers is high.

Competitive rivalry within the industry

Because of the presence of a large number of firms within the industry and that too in a small region (102+ in Ambala Cantt), the industry approaches perfect competition. Players cannot vary prices too much, even though prices alone are not the ultimate determinant. A certain portion of players compete exclusively on prices, while a major portion compete on quality, but only within a certain price range. Thus competitive rivalry is high.

Threat of new entrants

Since competitive rivalry is high, margins are moderate but squeezing, domestic buyers are on a certain advantage and suppliers have the upper hand in deciding prices i.e. overall the degree of forces is high, hence this is a relatively unattractive industry for new players (reduced profits). The last entrants to enter were around mid 1990s and since then few have ventured here.

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Thus, threat of new entrants is low.

Threat of substitute products

As such, there is no real threat of substitute products within the industry.

Research Methodology

Interview method was used to process the obtained information from the specialist personnel (experts opinion). To attain the objectives of this project, Questionnaire of KM in relation to five different parameters was provided. Five parameters are: KM and Information Management: This section consists of 7 questions. In this section how companies manage to disseminate information within and outside their industry would be measured. KM and HRM: This section consists of 7 questions. In this section how companies manage to disseminate information and uses the same for making their HR practices better would be measured. KM and Management Practices in R&D: This section consists of 16 questions. In this section how companies utilize KM in making their R& D practices effective and competitive would be measured. KM and Strategy: This section consists of 7 questions. In this section how companies manage to align business strategy with their knowledge goals would be measured.

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KM and IPR: This section consists of 7 questions. In this section how companies protect their knowledge using patents and other means is measured.

Managers would respond on a five point Likert scale on two dimensions Satisfaction and & Importance. The basic idea here is to understand if the managers understand the importance of KM in relation to other parameters and they implemented successfully or not. After collecting the data, statistical techniques could be applied. In the present project, Correlation would be used. In each parameter, the correlation between satisfaction and Importance would be calculated.

Findings & Conclusion

Correlation between Importance and Satisfaction

Labomed Quality Scientific & Microscopes Mechanical Works


Info. Mgmt Human Resource Mgmt R&D Strategy Intellectual Property Mgmt 0.915577 0.643524

Shiv Dial Sud & Sons


0.676557

Kanwaljit International Sc. Instr. Biological Lab


0.804701 0.690137636

0.67198 0.734643 0.975237

1 0.960526 0.95656

1 0.895331 0.948683

0.88497 0.520165 0.975237

0.974631846 0.942758076 0.487995425

Na

-0.10607

na

na

na

R & D and HRM are two areas where most firms concentrated the most. There was generally a high correlation between what firms deemed satisfactory and important. This indicates that whatever these firms did in those areas which yielded them satisfactory results, they considered important. They viewed little or no scope for improvement in that area.

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Strategy was one area which had a very high correlation throughout. This indicates that an organization was following only those practices that were inherently close to their strategic positioning in the industry. Whatever these companies held satisfactory to their performance was held extremely important.

Use of information management was slight to moderate and companies were satisfied with the existing level of usage. Intellectual property was one field where very little had been done or explored. Only one firm (Quality Scientific & Mechanical Works) had applied for a patent (malarial parasite detection microscope through capillary method-fluoroscent microscope). But rest of the firms were open to the idea of pursuing patent filing and intellectual property if they came across the opportunity.

Limitations of the Study

Since it is a pilot survey and data is collected as part of purposive and convenience sampling, generalization of the same cannot be made. Nonetheless this study can be helpful in making the base for making certain improvements for further research.

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References
http://web.cba.neu.edu/~mzack/articles/kmarch/kmarch.htm [1]
http://www.allbusiness.com/technology/computer-software/795585-1.html#ixzz1kmKqtpww [2]

http://www.explorehr.org/articles/HR_Planning/The_Role_of_HRM_in_Knowledge_Management.html [3]

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Appendix

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