Knowledge Management Tata Steel

Abstract

In the late 1990s, Tata Steel began to introduce knowledge management initiatives in the company. It started with a small group of people from within the organization. The group formed a "knowledge repository", where all the employees shared their experiences and knowledge. One year after the knowledge repository was formed, the company formed "knowledge communities", which was a platform for like-minded people to meet and share their experiences. In 2001, Tata Steel developed a "KM index" to evaluate the performance of individual employee in the KM initiative. Later, it linked performance evaluation to KM and used a balanced scorecard to monitor the performance of individual employees, divisions, as well as the organization as a whole, in KM. All these initiatives of Tata Steel seem to have paid off; in early 2003, Tata Steel was recognized as one of Asia’s Most Admired Knowledge Enterprises. It was the only steel company in the world to have received the MAKE award.

"We recognize and endorse the importance of knowledge as a source of innovation and competitive advantage. We wish to leverage all our associations within and outside the Company to harness the ideas and provide the means for exchanging and growing knowledge."

-Tata Steel Annual Report, 2002-03 .

"I am proud that Tata Steel is recognized for its knowledge creating and sharing character and I congratulate all the employees of Tata Steel. This award, however, is only a milestone and must not be mistaken for our destination. We need to make knowledge the primary source of our distinction in an industry where technology is increasingly becoming a commodity."

-B. Muthuraman, managing director, Tata Steel, responding to the news of Tata Steel being named as one of Asia's Most Admired Knowledge Enterprises, in 2003.

In 2003, Tata Steel was chosen as one of Asia's Most Admired Knowledge Enterprises (MAKE) . It was the only company in the manufacturing sector in India and the only steel company in the world to receive this award. The award was in specific recognition of Tata Steel's knowledge management (KM) initiatives, which were started in late 1990s. Tata Steel was the only manufacturing company in India to have implemented KM. Tata Steel's management expected KM to play a key role in establishing intellectual assets, rather than physical assets, as the growth driver of the company.

Tata Steel's KM initiatives were successful and the number of hits at KM sites of Tata Steel in 2001-02 was 1100 compared to Shell's (second most admired company in Europe) 1000 hits, even though Tata Steel had only 3000 registered users as compared to Shell's 10000 registered users. Through Tata Steel's KM initiatives, expert skills became available throughout the organization and productivity increased. As employees were encouraged to come out with innovative ideas, their job satisfaction increased, and another benefit was a reduction in the R&D expenditure.

Tata Steel was established in 1907 by J N Tata at Jamshedpur in Bihar, India. The company commenced production in 1911 with a capacity of 0.1mn tonne of mild steel . By 1958, its capacity had increased to 2 mn tonnes. Over the years, Tata Steel acquired several companies. In 1973, it took over some flux mines and collieries near Jharia, West Bokaro . In 1983, it acquired the Indian Tube Co. Ltd., a manufacturer of seamless and welded tubes. In 1991, it acquired the ferro-chrome unit of OMC Alloys Ltd. near Bamnipal in Orissa.

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        Case Code   ITSY036
   Case Length    11 Pages
              Period    1990 - 2004
 Organization     Tata
        Pub Date     2004
Teaching Note    Available
     Countries    India
      Industry    Steel

Issues

• How the knowledge present within a system can be harnessed to yield major benefits to the organization as well as to the people within it.

• The importance of matching new initiatives with the behavioral and working motivations of people in order to obtain better acceptance of these initiatives and greater benefits.

1990s, Tata Steel, knowledge management, organization, knowledge repository, employees, shared, experiences, knowledge, knowledge communities, KM index, linked, performance evaluation, KM, balanced scorecard, Asia, Most Admired Knowledge Enterprises, MAKE.

Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.