Knowledge management as a sustainable competitive advantage in the steel industry

Abstract

The aim of this study is to conduct a thorough theoretical study on the relevant aspects involved in knowledge management and organisational learning, and to assess the maturity level of knowledge management within the South African steel industry. Various aspects of knowledge, knowledge management and organisational learning with specific relation to sustainable competitive advantage are discussed in the literature study. During the literature research several factors which either promote or hinder the effective management of knowledge were identified and a list of lessons learned by other successful knowledge focused companies, are discussed. The critical success factors for a successful knowledge management program are also discussed. Knowledge can create a sustainable competitive advantage within an organisation, if successfully applied to make value adding decisions and to enable learning, and if it is applied to make decisions which are superior to that of its rivals across the supply chain. An integrated approach needs to be followed when KM is pursued and the knowledge must be applied to make value added decisions and facilitate learning across all processes in the value chain. The focus must be to retain an organisation’s tacit knowledge as this is a key success factor to ensure a sustainable competitive advantage. The study includes research on whether knowledge management is effectively used as a sustainable competitive advantage in the South African steel industry. The maturity level of the application of knowledge and learning principles implemented within the South African steel industry is assessed and compared to the maturity level of Arcelor Mittal, Monlevade, located in Brazil. A survey was designed and distributed to determine the knowledge management and organisational learning maturity levels at two steel facilities of ArcelorMittal in South Africa and one facility in Brazil. The key problem areas as identified through the empirical research are discussed and it is concluded that South African facilities do not effectively use knowledge management as a sustainable competitive advantage. The maturity level of knowledge management in Arcelor Mittal, South Africa is low compared to the maturity at Monlevade and rival companies such as Tata and Posco steel. A significant effort needs to be made in order to allow the effective creation, acquisition, sharing and leveraging of knowledge within the South African steel facilities. The key factors which constrain effective knowledge management is related to ineffective Human Resource policies, organisation structure, lack of knowledge exchange forums, collaboration and communication, coaching, and a lack of incentives to share tacit knowledge. It is also evident that knowledge is not seen as a sustainable competitive advantage by many respondents and that they perceive they do not have the time or capacity to transfer knowledge. Ten practical design principles were constructed and a knowledge management framework was developed to guide South African steel companies during the design and execution of a knowledge management programme which will ensure that knowledge management will result into a sustainable competitive advantage.