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Task a: Critical Discussion of two Methods for Electrolux

Discuss about the Information and Knowledge Management System.

The report depicts the importance of evaluation of a method through which the investment in information can be prioritized. Particularly, in order to prepare this report the selected organization is Electrolux, an international brand famous for making and supply of household appliances such as washing machine, refrigerators dishwashers and many other. The organization is facing difficulties due to lack of proper management system. In order to mitigate those issues certain technologies are adopted by the organization.

Moreover, the report will critically analyze the information generation and sharing and knowledge management and sharing methods based upon CRM (Customer Relationship Management). The report will also discuss the difference between tactic and explicit knowledge management system. The organization has also adopted the concept of electronic strategy to enhance the existing operational strategies. From market survey it has been determined that, Electrolux is facing four major challenges among them the most affecting one is needed to identified and mitigated is also elaborated in  this report.

Electrolux is one of the most well-known international home appliances manufacturing organizations headquartered in Stockholm, Sweden. It produces major appliances to small appliances for the consumers all over the world. Many methods are identified with the help of which priority on investment in information and knowledge management system including the importance of technologies are identified (Cadle & Yeates, 2004). As, the organization is facing several difficulties in terms of business management thus, based on the requirement of the consumers implementation of the appropriate method is required.

Decision making on the investment on information system is one of the most important thing that is needed to be considered. Many methods are available in case of evaluation of IT investment in Electrolux. The term investment is referred to as the expectation on future benefit that can be generated from the marketplace and feedback of the consumers. The components of investment are time, energy or the information, raw material and data that have been spent for a particular operational framework (Ramazani & Jergeas, 2015). In order to create wealth for future financial measurement for investment is needed to be considered.

Return on investment: The two models based on investment priority are related to the Return on Investment (ROI). Electrolux is also facing different difficulties and to resolve these issues an equity model is needed to be implemented so that based on the outcomes the investment can be done. Return on investment is referred to as the measuring magnitude based on the cost and benefits of Electrolux (Ziemba & Kolasa, 2015). The process is capable to serve simple calculation method so that the amount of profit from the marketplace can be easily measured. ROI is also known as ROI method. It contains different factors like huge number of financial measurement.

Justification on Selecting ROI

Discounted cash flow: The measurement includes rate of internal investment, current present value and the specified period for payback. Electrolux used these methods to compare different types of investment. The most commonly used measurement approach is the expected cash flow from investment. The total financial impact on Electrolux can be calculated from cash flow projection (Kerzner, 2013). The measurement of ROI is divided in to two parts such as discount cash flow and non-discounted cash flow. The discounted cash flow always considers the time value related to money. In order to make the present value the future cash flow and discount amount is estimated. There are many known financial measurement categories are present such as the Net Present Value (NPV), Internal Rate of Return (IRR), Real Option Value (ROV) etc whereas, the non-DCF does not consider the time values of investment. The measurement approach includes the accosting rate of return, return on the investment and the measured payback period.

Particularly for Electrolux the selected approach is ROI. Over the last few years the operation approaches on investment and benefit has been changed drastically. Not only this, but also the method helps Electrolux to enhance its global competition throughout (Timm et al., 2016). In the worldwide scale the internet services and different international events also influence the performance of the organization.

For a particular information system, investment and management system helps to take proper decision making approach. Similarly, in case of Electrolux, investment in decision making is also divided into various stages such as understanding of the problem, definition of the problem and structuring, identification of alternative approaches, implementation of the best suited decision and control and monitor of the proper approach. During the application of this model, Electrolux uses this model, to the decision making to understand whether the investment is applicable or not. Since, traditional days, every businesses formally justifies the capital investment to understand whether the investment is beneficial or not. Thus, whenever, any emerging technology is required to be adopted by the company, the first thing is to study the feasibility on that field (Kerzner, 2013). Due to the changing nature of investment, it has becoming very difficult to apply the most appropriate investment approach for Electrolux. Particularly for Electrolux, different survey confirms that, ROI is required to be adopted by the organization to understand the amount of investment and benefits from the competitive marketplace. It has been found that more than half of the large international organizations are adopting the concept of ROI to create a balance between the investment and profit. Different models and approaches are there related to Electrolux, digital manufacturing organization. In the ground of technical rationale different IT investment decisions are making apparently.

Task b: Information and Knowledge Generation and Sharing at Electrolux

 In order to buy factory and development of new products this kind of decisions are undertaken by Electrolux. The terms Return on Investment (ROI) implies that, it also provides the qualitative and quantitative advantages to Electrolux. The new information system, derived by the organization is capable to quantify and articulate the values. Not only this, but also the complexity of the models can also be reduced by adopting the concept of ROI (Pearlson, Saunders & Galletta, 2016). Basically, this model will help to monitor and control the entire system including the investment on raw material and other information. However, the annual turnover is exceeding the estimated amount due to the adaptation of this technology.

For any particular organization, the concept of information generation and knowledge generation and sharing approaches are very much necessary to be adopted. Nowadays, in order to gain competitive benefits from the marketplace most of the organizations are focusing on the requirement of the consumers. These kinds of organizations are known as customer focused organizations (Rodriguez, Sánchez & Martinez, 2013). Most of the financial service organizations are focusing to become consumers focused. Both operational solution as well as operational tools selection has become possible with the help of E-business strategy. Moreover, E-business is referred to as a roadmap that could guide the entire system. This process will be possible if an organization introduces the customer relationship management software to their existing system. In order to complete the consumer focused system information gathering and sharing them among the users and partners as well is very important on the other hand, generation of appropriate knowledge and sharing of that knowledge with proper management is needed.

Information generation and sharing: After the production and before the production of Electrolux products, information can be generated from the system itself. As, the organization serves online and offline both services thus, relationship to the consumers is needed to be very strong. Basically, the main motive of any organization is to understand the requirement of the consumers so that they could gain commercial benefits (Kaplan & Atkinson, 2015). In order to develop different operational strategies proper analysis of environment including the planning and evaluation is needed to be well organized. Based on the type of business Electrolux gathers the information from different resources. The information can be generated by proper implementation and utilization of the resources.

Mainly the management reporting analyst monitors the overall processing system. Information generation and sharing is strictly related to the customer relationship management system. Information can put positive as well as negative impact on the production of the organization. For a digital device manufacturing organization different kinds of information are needed to be gathered and shared. Particularly, for this case, survey is required to be done, so that the products can meet the requirement of the consumers (Cowan, MacDonald & Floyd, 2013). Therefore it can be said that, information generated from the consumers are the most important information, as based on those data the flow of production can be changed. After generation of the data no direct action is undertaken by the organization rather, those are analyzed well, to understand that, which information is valuable and which one is not.

Knowledge generation and sharing:  In order to gain competitive advantages from the marketplace proper knowledge management is one of the most important things that is needed to be considered. The term leveraging knowledge is all about creation, capturing, sharing and exploration of knowledge throughout. The knowledge exploitation is possible after the adoption of proper value chin models both internal and external. Different software is there that helps to create knowledge management system. There are many techniques that help the organization during the creation of the knowledge management system (Kaplan & Atkinson, 2015). The technologies include creative technique, data mining, environment scanning, business simulation and analysis of the overall content. During the sharing of knowledge certain techniques are needed to be considered, such as- Communities of the practice are an important factor knowledge management system. Mainly four things are there needed to be considered by Electrolux.

With the proper usage of knowledge management system an organization can serve four basic things. It will help to collect and organize all the information from different resources as per the requirement. If community practice approach exists then, the collected information can be shared among the users. It helps to enhance the collaboration among the users rather consumers of the organization. After using the information in a well organized manner more knowledge can be generated. Another kind of knowledge management software exists in the Electrolux business management approach (Pless, et al., 2016). It includes different tools such as the electronic documentation, scanned paper documentation, electronic mail, web pages. There are some other factors included in the system such as Proper learning of the network, Share of the best suited practices of Electrolux, Actions after the review, Cross functional team and Decision diaries.

For example it can be said, this kind of knowledge management system is use in IBM organization. This acts as a tool which helps the employees to search in a more powerful approach. IBM uses Lotus discovery service and Microsoft SharePoint Technologies etc as knowledge management software that helps IBM to operate more effectively and efficiently. Different examples of knowledge management system are identified in Electrolux. The examples include research files, shared documents or files and consumer feedback database.

Feedback database: Electrolux has database system that holds the details of the consumers and the employees as well. On the other hand, the consumers can share their point of view on quality or price of the products (Larkin, 2013). In order to achieve commercial benefits Electrolux changes their product to meet the requirement of the consumers. All the employees of Electrolux are capable to share their view under that database.

Shared documents: many employees work on a project at a time for Electrolux. The concepts of shared document help an employee to comment on the work done by another employee belonging to the same team.

Research files: Electrolux is developing new products, thus understanding on the current market share is very important for this company.  It helps to analyze the gaps from the business analytics perspectives (Whitaker, Ekman & Thompson, 2015). Based on the appropriate requirements, the products are developed to fulfill the consumer’s demand.

 Based on the case of Electrolux, it has been found that, the organization maintains both kind of management of knowledge such as explicit and tacit. Most of the clients of an organization, feels that the deployment of a software solution helps to provide technical solution to the consumers of the organization.  The knowledge community always helps an organization to enhance the performance of the organization. There are two kind of knowledge management systems such as explicit and tacit found in an organization (Klinker, Terrell & Mahfouz, 2015). Explicit knowledge is referred to as a type of knowledge that can be easily shared. Information that is easier to document is also known as explicit knowledge on the other hand, tacit knowledge is the information which is strictly related to the employees rather information generate or innovated by the employees working for an organization. In most of the cases it happens that, the ideas those have been generated in the employee’s mind are very difficult to express. In order to share knowledge properly it is required to have proper maintenance of communication or open communication so that the employees can interact with each other. Lack of sharing of explicit knowledge will lead to major financial and organizational lose. During analysis it has been found that, there are major differences between explicit and tacit knowledge management system. The differences between these two knowledge management systems are as follows:

Explicit knowledge: Explicit knowledge is referred to as searchable information and this kind of information can be easily found. The consumers of an organization can merge all the values and the knowledge can be easily used by the organization and users as well. The standard or norms of an organization is the explicit knowledge (Chai, Arunachalam & Ramaswami, 2013). It means how the business operation and functionalities are conducting can be identified but how a particular employee is working on a project cannot be understand unless or until the employee himself express it. The knowledge stored within a knowledge community can be easily retrieved. In order to overcome different difficulties, tacit knowledge generation as well as sharing is much important than explicit knowledge. Tacit knowledge is the power of critical thinking or out of box thinking. While, an organization is producing a particular product that time, proper understanding of that product is very important for both the users and employees as well.  

Both explicit and tacit knowledge are interrelated to each other. The current market of Electrolux implies that, it is a consumer focused organization and continuously they are producing new designer digital devices for their consumers. The product manufacturing approach and supply of those products are possible by outsourcing management. Sometimes through third party and sometimes directly Electrolux delivers its products such as washing machine, fridge etc. Consumer care service is one of the most important segments of Electrolux, as based on the quality of the products produces by this organization, clients provide their feedback to acknowledge that whether the product is consumers focused and beneficial or not (Whitaker, Ekman & Thompson, 2015). If any of the products required any changes then, tacit knowledge will help to improve the previous existing system. In order to gain market benefits, currently the organization is adopting electronic strategic approaches by establishing and maintains the relationship with the consumers and partners of the organization.

During analysis it has been found that, knowledge management system is becoming one of the most important factors that are needed to be considered for implementing electronic strategy for Electrolux. In order to build new strategies including effective and efficient business processes and decision making processes, role of knowledge management system is defined to be very huge (Thakur, 2012). In Electrolux, the adopted E-business strategy is referred to as a part of information technology project. It justifies the way of utilization of proper internet technologies, in terms of competitive advantages and market configuration and evaluation.  

Tacit knowledge: Tacit knowledge is referred to as internal knowledge that generally generates from the employee’s head or knowledge that can be used to improve the existing system. These kinds of knowledge are not flexible and most of the times the employee’s having the brainstorm seems to be unable to share his or her point of view. Better articulation of technology and new emerging thoughts can be properly implemented with the help of tacit knowledge. It basically helps an organization to achieve its pre determined organizational goal (Pless, et al., 2016). The track of tacit knowledge is different from other normal thinking approaches. Critical thinking and evaluation of the critical thoughts helps to generate completely new approaches. Most of the times it has been found that, there are certain software tools that helps to share knowledge from one to other without any sort of internal and external interruption. Knowledge sharing is based on the mentality of the human being.

Currently due to information overload many organizations are suffering a lot. These kinds of organizations are looking for a better approach that must have the capacity to hold large amount of information. Before creation of the E-business strategies, Electrolux organization was become aware of the associated risks and opportunities. The importances of KM in Electrolux are as follows:

  1. It provides opportunity to the organization to become more familiar with its consumers, suppliers and partners as well from the context of CRM.
  2. It helps an organization to understand the material requirement and availability of that need, production of the products and delivery of that product from the SCM perspectives and different distribution channels (Larkin, 2013).
  3. KM helps to combine project stakeholder and management levels all together. It also supports the team work.
  4. It helps to take proper decision making for Electrolux and improve the performance of an organization.

Different survey implies that, Electrolux is facing different challenges due to lack of current information and knowledge management system. However, Electrolux is not facing financial risks, like other organizations. From the stakeholders aspect it is found that Electrolux is a trusted company. Particularly four areas are identified which include, the changing climate, the ethical business practices, management of the restructuring of the group’s process and responsible source management (Whitaker, Ekman & Thompson, 2015). The financial evaluation method always encourages the company to take short term as well as long term decisions. From the opinions given by the stakeholders of Electrolux, these issues are identified. In order to upgrade the sustainability strategies, the business operations are functionally elaborated.

Ethical business and a safe working environment: Mutual respect, planning, proper implementation of the planning are very important. In order to reflect this, different guiding ethical principles are structured throughout. Setup of appropriate target rather organizational objective, collection of required data, training and development and annual survey is needed to be served by the organization (Whitaker, Ekman & Thompson, 2015). The main goal of the organization is to attract the consumers. This particular area needs continuous development.

Climate challenge: The change in business climate is another issue, related to Electrolux. The climate strategy deployed by Electrolux is divided into three parts such as climate smart products, spreading awareness among the consumers about the quality of the products and improvement of the operational products.

Responsible sourcing: Based on the price of products throughout the world, Electrolux should decide the range; due to lack of financial management the organization is facing currently major challenges.

Restructuring: Local and the group communities are dependent on the decision making approach of the organization (Kaplan & Atkinson, 2015). On restructuring Electrolux has reduces its number of employees around 1000. In order to reduce these issues KM is needed to be executed.


From the overall discussion it can be concluded that, implementation of proper knowledge management system and information system is strictly required in order to develop the structure of Electrolux. The report has mentioned that for priority for investment in information and knowledge management return on investment is the best suited model that must be used by Electrolux. Additionally, generation of information and knowledge sharing of both from the CRM perspective has been demonstrated. In order to meet the requirement of the consumers proper customer relationship chain and supply chain management system are needed to be introduced. In addition to this the report has also mentioned that, there are two different knowledge management systems tacit and explicit associated to Electrolux. The report also mentioned the importance of KM system while implementing e-strategies. Finally it will elaborate the key challenges of Electrolux are also illustrated.


Cadle, J. & Yeates, D. (2004). Project management for information systems. Pearson education.

Chai, L., Arunachalam, S. & Ramaswami, S.N. (2013) march. synergistic impact of crm and other core business processes on firm efficiency and effectiveness. in robert mittelstaedt doctoral symposium proceedings (p. 123).

Cowan, I.A., MacDonald, S.L. & Floyd, R.A., (2013). Measuring and managing radiologist workload: Measuring radiologist reporting times using data from a Radiology Information System. Journal of medical imaging and radiation oncology, 57(5), pp.558-566.

Galliers, R.D. & Leidner, D.E., (2014). Strategic information management: challenges and strategies in managing information systems. Routledge.

Kaplan, R.S. & Atkinson, A.A, (2015). Advanced management accounting. PHI Learning.

Kerzner, H.R., (2013). Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.

Klinker, S., Terrell, R. & Mahfouz, A.Y. (2015). Dell's Use of CRM-SCM Integration to Dominate the PC Market. Communications of the IIMA, 6(3), p.9.

Larkin, P.J. (2013). A practical approach to valuing growth in security analysis. International Research Journal of Applied Finance, 4(11), pp.1438-1454.

Pearlson, K.E., Saunders, C.S. & Galletta, D.F. (2016). Managing and Using Information Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.

Pless, J., Arent, D.J., Logan, J., Cochran, J. & Zinaman, O. (2016). Quantifying the value of investing in distributed natural gas and renewable electricity systems as complements: Applications of discounted cash flow and real options analysis with stochastic inputs. Energy Policy, 97, pp.378-390.

Ramazani, J., & Jergeas, G. (2015). Project managers and the journey from good to great: The benefits of investment in project management training and education. International Journal of Project Management, 33(1), 41-5

Rodriguez, R.M., Sánchez, P.J. & Martinez, L., (2013), July. Managing hesitant heterogeneous information in decision making. In 2013 International Conference on Machine Learning and Cybernetics (Vol. 4, pp. 1718-1723). IEEE.

Thakur, J. (2012). Role of artificial intelligence and expert system in: business competitiveness. Gian Jyoti EJ, 1(2).

Timm, I.J., Woelk, P.O., Knirsch, P., Tönshoff, H.K. & Herzog, O. (2016). Flexible Mass Customisation: Managing Its Information Logistics Using Adaptive Cooperative Multi-agent Systems. In Developments in Logistics and Supply Chain Management (pp. 203-211). Palgrave Macmillan UK.

Whitaker, J., Ekman, P. & Thompson, S. (2015). How Multinational Corporations Use Information Technology to Manage Global Operations. Whitaker, J., P. Ekman, S. Thompson." How Multinational Corporations Use Information Technology to Manage Global Operations," Journal of Computer Information Systems, forthcoming.

Ziemba, E., & Kolasa, I. (2015), September. Risk factors framework for information systems projects in public organizations-insight from Poland. In Computer Science and Information Systems (FedCSIS), 2015 Federated Conference on (pp. 1575-1583). IEEE.

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