Rio Tinto's utilization of knowledge management techniques
Discuss About the Knowledge Management and E-Commerce?
Knowledge management and e-commerce are important aspects that are deployed in any organization that is adopting the present trends in the business world (Agrawal, 2009). The two concepts are important to Rio Tinto because they are the primary factors that determine the efficiency, effectiveness, urgency, and accuracy when carrying out operations.
Rio Tinto is an exemplary organization that is utilizing knowledge management and e-commerce to sustain its operations. In particular, the use of tacit and explicit knowledge is evident in the management of the organization (Knowledge Management - Managing Tacit and Explicit Knowledge, n.d.). Tacit knowledge entails the knowledge that people possess in their mind, and it's hard to document it- for example, a skill of knowing how to operate a given machine is intrinsic such that is involves experimental activities (Ruggles, & Holtshouse, 1999).
On the other hand, explicit knowledge encompasses structured and unstructured procedures written down or stored in databases. Structured knowledge includes the procedure like the written down policies, vision, culture, and organization structure (De Brun, 2005). Contrary to this, unstructured knowledge entails emails, video, images, and audio items that cannot be arranged in a chronological manner for retrieval. Rio Tinto utilizes both the tacit and explicit knowledge management techniques to facilitate its operations.
In another prospect, knowledge management is important to the employees, the community, and Rio Tinto at large. The benefits vary from one facet to the other; for the employee of Rio Tinto, knowledge management helps them in the following ways:
- Helps employees to improve their performance through the practice of better time management and decision making.
- Knowledge gives employees a wide scope regarding challenges and opportunities they face in the workplace.
On the other hand, knowledge management helps Rio Tinto to sustain and improve their competitive edge- doing market intelligence to counter their competitors, facilitates decision making, and development of the best organization structure as well as maintaining best practices. Also, knowledge management boosts innovation and improves the quality of products produced by the company.
To the community, knowledge management has enabled Rio Tinto to develop mutual understanding with external parties including but not limited to investors, customers, and other bodies. In this manner, Rio Tinto is better placed regarding networking and promoting cohesive relationship with their peers. Finally, knowledge management has facilitated the development of a code of ethics that other companies are emulating.
The global footprint of Rio Tinto is attributed to the proper knowledge management for an extended period now that is formed the basis of their success. Notably, the success is underpinned to the efforts and strengths injected by the management to ensure maximum coordination of activities internally and externally (Awad, & Ghaziri, 2010). For sure, were it not for incorporation of teamwork, integrity, safety, and development of proper ethical code the company would have been under siege.
All the above attributes are the end products of knowledge management. For example, to manage a workforce of about 50000 in 35 countries globally is not an easy task (About Rio Tinto - Rio Tinto, n.d.). Such a step of globalization calls for proper knowledge management, coordination, and the streamlining the activities to ensure Rio Tinto stick towards achieving the set objectives as a team in a cohesive manner. Therefore, Rio Tinto embraces a culture that puts the safety of its workers at the frontline; where every person understand the importance of human security while handling various machines without compromising the business operation.
Benefits of knowledge management to employees, community, and Rio Tinto
Rio Tinto is well represented in the various regions including but not limited to South Africa, UK, Australia, Asia, and Europe due to the existence of proper knowledge.
The global footprint is underpinned by the expertise of using knowledge to advertise and penetrate new markets by supplying the right products that meet the quality of clients and availing the products in the customer destinations at the right time. The logistics for availing such products is made possible because Rio Tinto owns and operates some channels of transportation like railways, ship, and ports hence it is an added advantage on their side.
E-commerce is another prospect that Rio Tinto is not ignoring at all costs. E-commerce is well understood as the operation of activities using electronic devices (Rigby, 2014). However, most people fail to recognize the various forms that are underpinned to e-commerce. For a couple of years, e-commerce has remained attractive. Undoubtedly, digital technology is bringing a lot of transformation in the business industry.
There are diverse forms of e-commerce that exist, and business can use more than one form of e-commerce to carry out its operations (Dyer, 2011). For the case of Rio Tinto, because it operates on bulky goods and sophisticated minerals that require special packaging and handling, the business uses precisely Business to consumer approach and business to administration approach.
The nature of operation of Rio Tinto continues to generate value for the company and the community. However, Rio Tinto management is aware of the environmental implications that their activities pose to the surrounding environment. Therefore, Rio Tinto works in partnership with the affected members of the community to share the wealth to subside the threats that the members are exposed to as a result of mining. Thus, the benefits are extended to the neighboring communities, employees, suppliers, and partners.
Also, Rio Tinto looks for innovative solutions of operating by participating and working hand in hand with organizations like the International Counsel of mining & metal to implement sustainable standards to counter the challenges related to mining. Such collaborations strengthen the business to a regulatory approach of Commerce (Djoleto, 2013).
Barker (2002) argues that the primary goal of e-commerce is to bring suppliers and customers together, reduce operation cost, enhance electronic transactions, and improve inventory control to an organization. To some extent, this might be true because the rate at which Rio Tinto and other companies are adopting and shifting to e-commerce is palpable. Indeed, electronic technology has altered the way businesses are conducted since the inception of e-commerce. Barker (2002), emphasizes that studies show that about 75% of mining companies in Canada believe there is a potential opportunity in e-commerce. Notably, Rio Tinto is investing immensely in technology to ensure they compete favorably in the global market. For instance, research has proven that technology can be used to slash down the cost and this is a way of survival- remaining in business.
Also, Rio Tinto is navigating through the industry through using collaborative sites and the use of reverse electronic auctions. The collaborative website is web-based databases the company is using to communicate with the various centers such that they facilitate global knowledge sharing (Walsh, 2016). Also, the sites provide the necessary content like Rio Tinto portfolio, products, and services hence the clients can know the company offers by visiting the sites. In a nutshell, the collaborative sites are meant to improve communication between the business and other parties. On the contrary, reverse action is used to control certain transactions in the business setting.
Various forms of e-commerce employed by Rio Tinto
Adopting e-commerce as part of the business process of an organization is an integral component that has both negative and positive implications for the organization (Advantages of Ecommerce, Disadvantages of Ecommerce, Ecommerce Business Review, n.d.). Rio Tinto is enjoying the following benefits as a result of adopting e-commerce: efficiency and speed of business operation have been fastened. It is evident Rio Tinto is has facilitated information sharing by utilizing the collaborative sites. Also, e-commerce has made it easy for the company to operate globally, and penetrate new markets there is a high rate of contact between the company`s customers the managements. On the contrary, the significant negative implication of adopting this method is that, that the initial cost and maintenance are expensive but the Rio Tinto countered these challenges by implementing e-commerce is phased. Also, the general problem is that e-commerce provides a gateway for hackers to compromise the system; however, Rio Tinto has not experienced complex hacking problems so far (Phillips, 2016).
In conclusion knowledge management and e-commerce are two primary factors that have contributed to the success of Rio Tinto. The management of Rio Tinto seem to understand the importance of proper knowledge management to the employees, community, and the organization at large. In another perspective, e-commerce has seen the company compete in the international market because it has enabled the company to coordinate its activities in the 35 countries it operates at ease by integrating their databases to achieve a common objective.
Although Rio Tinto has a collaborative sites that links the company with its clients, it is important they adopt a virtual community platform or an online store that will enable clients to view their products, make enquiry, and even place online orders. This can be achieved by implementing the electronic payment system and integrating it with the company database to allow clients to make payments by using their credit cards or PayPal accounts. If this is implemented, Rio Tinto management should be sure of attracting more clients as well as multiplication of number of transactions that can later translate to huge sales.
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