Knowledge Loss Risk Management Model Essay

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Summary

The world has become increasingly globalized and firms are finding themselves faced with the stiff competition due to the elimination of geographic and communication barriers that existed before. It is now possible for a firm to operate anyone in the world as long as they have the financial capacity and the target market. Under such a competitive business environment, firms are forced to come up with unique ways of remaining profitable and successful in their operations. One of the ways that firms around the world are now embracing is turning themselves into project-based organizations.

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This means that they are now identifying tasks and turning them into projects with a specific timeline within which they should be completed. Using this strategy makes it possible for these organizations to evaluate the performance of each task to compare the resources used and the returns it gave within a given period (Jafari et al. 319).

This strategy is proving to be a successful way of addressing various tasks, but it faces a serious challenge of knowledge loss. When a firm implements a given project successfully, the team involved in such projects gets to develop more knowledge and experience on how future projects should be handled. However, sometimes these employees are lost either through retirement, retrenchment, transfer, or resignation.

The departure of any of these knowledgeable and experienced employees automatically leads to knowledge loss. When they leave, they leave with all that they have gathered over the years and this may affect the implementation of future projects in such project-based organizations. Each project should smoothly lead to the next project. However, this smooth transition from one project to another is hampered by knowledge loss. It is, therefore, important to come up with ways of dealing with this knowledge loss. To address this problem, it is necessary to come up with an appropriate project risk management model that is based on knowledge management. The study aimed to come up with an appropriate risk management model of knowledge loss for project-based organizations.

Key Learning Points

The messages in this article are very educative and I agree with them to a large extent. As a firm increases in size, it becomes very difficult to know how each of the departments is fairing on each of the tasks they undertake. That is why it has become necessary to have each major activity run as a project. I agree with this strategy of management because in so doing, a firm will be able to know how efficient it’s various activities are, and what is needed to make necessary adjustments. It becomes easy to know the resources invested in each major activity and the returns that it gives when it is completed.

The article talks about knowledge loss and how it affects the implementation of subsequent projects. I agree with this message. Once an employee leaves an organization because of retirement, retrenchment, transfer, or resignation, he or she goes away with the knowledge that has been gathered over the years (Pasher and Tuvya 38). This may not be a tangible loss, but its impact is often felt for a very long time if an appropriate replacement is not made at the right time. The authors argue that each project should successfully lead to the next project, but this is not possible when the risk of knowledge loss is not addressed.

I also agree with the solution presented by these authors. They hold that the project-based organization will be very popular shortly, but this risk must be addressed as soon as possible. They propose the development of a model that can help in managing the risk of knowledge loss in a project-based organization. This model ensures that even if a given employee is lost for a given reason, the knowledge that he or she has will not be lost.

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Relevant Statements to the Session

The researchers indeed conducted their study in Iran, a country that has several fundamental differences from the United Arab Emirates and other countries in the Middle East. However, it is important to appreciate that being in the same region the information presented in this article may be relevant to companies in the Middle East because of the shared socio-economic and political forces.

As Wheeler (112) says, when determining the relevance of a given research report to a given country, it is always necessary to critically review the context under which the knowledge was developed. In this article, the authors have not restricted the development of their knowledge to facts available only in Iran. On the contrary, they have used knowledge available in the international arena and then modeled it to fit into the context of Iran. They collected facts developed in the United States and other countries around the world to develop their body of knowledge. This makes their message very universal hence relevant to the companies in the United Arab Emirates.

Since the authors had in their mind, firms within Iran when developing their model, the truth is that their model and the general knowledge they have presented in this article are more relevant to firms in the United Arab Emirates then they are to companies in Iran. According to Khatta (79), Iran is one of the few countries in the Middle East that have not maintained an appeal to international investors. The leadership in the country has made it unattractive to some of the multinationals, and this means that competition in the Iranian market is not as stiff as it is in the Emirates.

Dubai particularly has become very attractive to the international community that it is currently ranked as one of the top business hubs in the world. Firms in this city and the United Arab Emirates in general, find it very important to embrace project-based management concept to overcome the stiff competition and to remain operational. For example, the real estate market in Dubai is faced with stiff competition because of the influx of international players. Real estate firms are struggling to remain operational despite this competition. The best way they can achieve success in such an environment is to embrace the model of management proposed in this article and to address the risk of knowledge loss.

Critical Analysis

The points made in this article are relevant to the construction industry more than it is to any other industry in the country. The construction industry has experienced massive growth over the years in this country and Dubai currently has the tallest building on earth (Das 68). It is easy to assume that the facts presented in this article are only applicable to the construction industry. However, it is also true that other industries also stand to benefit a lot if they successfully embrace the concepts presented in this article. One of the industries that can benefit from this business model in the hospitality industry.

Hilton Hotel is one of the top hotels in this country. However, competition in this industry is chocking the profits of this firm. If this concept is embraced, it can help the company to cut down its cost of operations and increase its sales. To do this, the firm may divide their entire calendar year into three or four projects based on the flow of the customers.

The months when the city receives the highest number of customers can form one project, the months when the firm receives an average flow of customers can form the second project, while the months with the least flow of customers can form the third project in the year. Each of the projects should be assigned resources independently and auditing done when it comes to an end to determine the costs used against the revenues made.

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The management will ensure that risk management and knowledge management are given unique focus to ensure that critical knowledge is retained as the firm moves from one project to another. The movement from the season of slow clients to that of average flow, and finally to high flow of clients should be done seamlessly. Top auto dealers in this country such as Al Ghandi Auto Group and leading transport companies such as DHL can use the same model to define their operations in the market.

Practical Implications

The information presented in this article can be of great help to me in improving the performance of my organization. We are running a small furniture shop in the local market. This shop’s main challenge is stiff competition from firms importing furniture from China. The information presented in this article can help transform the operations of our business if it is implemented successfully. To adopt the concept, we will consider an individual customer who comes to make a purchase of a given product as a complete project. In most of the cases, clients come and make an order of the kind of product they want. Each of these orders will be audited to know how much they cost to present them to the clients. The costs will then be compared with the revenues made from the project.

We will make an effort to ensure that when each project is completed, there is an upward trend in the profitability of the firm. This will not be achieved by inflating the costs but lowering the total cost of operations. It will be very important to avoid knowledge loss as described in this article. This will be done in two ways. The first way will be to document every activity to ensure that records are kept for future references. The second way will be to reduce as much as possible the rate of employee turnover. One of the issues that I foresee is the possibility of some of the employees failing to document their daily activities. To deal with this issue, I will personally review the daily records of the employees. Conducting this inspection will be easy at the moment because the firm is small with only a few employees.

Learning Reflections

I found this article to be very resourceful because of several reasons. The concept of project-based organization has enriched my knowledge of how firms should deal with the increasingly competitive market in modern society. This is one of the best approaches to ensuring that every individual, every department, and the organization at large are accountable at every stage of development. This strategy makes it possible to identify areas of weakness in the operational processes as soon as they occur so that corrective measures can be taken as necessary. For instance, it is easy to identify areas where the costs of operations are high so that corrective measures can be taken to deal with it (Frenkel and Hommel 47).

This article has also enabled me to appreciate the relevance of knowledge management when running a company. When an employee is lost, it is not possible to quantify the loss, but after some time the loss will indeed be translated into a loss of profits. It is not possible to stop highly talented employees from moving to other firms if they realize that they can be offered better opportunities there.

However, management can put measures to reduce the rate of employee turnover by ensuring that they are always motivated. Another strategy of managing the risk of knowledge loss is to have most of the critical processes and activities documented so that future employees can have references to make. I find the knowledge in this article to be practical and very reasonable. I am looking forward to applying these concepts not only in my academics but also in my practice.

Works Cited

Das, Satyajit. Risk Management: Swaps & Financial Derivatives Library. Singapore: John Wiley, 2006. Print.

Frenkel, Michael, and Ulrich Hommel. Risk Management: Challenge and Opportunity. Berlin: Springer, 2005. Print.

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Jafari, Mostafa, Jalal Rezaeenour, Mohammad Mazdeh, and Atefe Hooshmandi. “Development and evaluation of a knowledge risk management model for project-based organizations: A multi-stage study.” Management Decision 49.3 (2011): 309-329. Print.

Khatta, Rosa. Risk Management in Project Management. New Delhi: Global India Publications, 2008. Print.

Pasher, Edna, and Ronen Tuvya. The Complete Guide to Knowledge Management: A Strategic Plan to Leverage Your Company’s Intellectual Capital. Hoboken: John Wiley & Sons, 2011. Print.

Wheeler, Evan. Security Risk Management: Building an Information Security Risk Management Program from the Ground Up. Waltham: Syngress, 2011. Print.

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IvyPanda. 2020. "Knowledge Loss Risk Management Model." July 15, 2020. https://ivypanda.com/essays/knowledge-loss-risk-management-model/.

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