GLOBAL BUSINESS DYNAMICS

MGMT6003
ASSIGNMENT - 2

Submitted by:
ALAGUSUTHAN MARIAPPAN-19101989
Lecturer: Dr. Keith Ng
Date: 18-08-2017
Executive summary
The aim of this report is to provide why knowledge management is competitive advantage in
the modern global economy. Knowledge is playing a key role for competition between
corporations. For managing and developing their employee’s skills and knowledge, some
organisations setup their own universities. These universities educating their employees to
maintain an organisation strategies and policies. The main purpose of this report is to provide
the details of how universities handling their employee’s knowledge, what are the training
they are giving, how it is beneficial for them and what are the competitive advantage they
achieved in their relevant market field. The major finding of this report, Some corporate
universities more focused on managerial skills more than technical skills. Technical skills are
highly important as management skills. This report suggests corporations more focused on
cost-cutting strategies in their training and development. Moreover, traditional universities
educate their students with the quickly adaptation for corporation environment.
 TABLE OF CONTENTS

1. Introduction

2. Why knowledge is a competitive advantage

3. Why corporates setup universities?

4. The selected corporate universities

4.1 Tenaris University

4.2 Universidad Corporativa Gas Natural Fenosa (UCGNF)

5. Benefits of Corporate universities

5.1 Benefits for Tenaris corporation

5.2 Benefits for Gas Natural Fenosa corporation

5.2.1 Technical Institute

5.2.2 Leadership Institute

6. Conclusion

7. Recommendations

References
1. Introduction
In this modern consumer economy is characterized by rapid transformations,
internationalization and more competition (Simaškienė and Dromantaitė-Stancikienė
2014). Talent management has been defined as combined group of programs,
developments and norms in the corporate designed and executed to develop, retain
and organise talent to achieve tactical objectives and meet organisation business needs
(Allen 2014). In this globalised world, competition between two corporates is even
bigger and challenges occur in a furious pace. Obtaining superior knowledge from
their employees is a crucial part for corporates. Handling knowledge management
leads positive effect to the organisation such as high profit, development and speeding
up production time, cutting costs.

Knowledge management is sharing knowledge for task complete, to achieve high

level of efficiency and effectiveness in all process of the organisation (Ou 2017).
Successful companies have the potential capacity to learn not only quicker but
smarter. Therefore, corporations are required to accept learning and training culture as
a key feature of their strategies’ (Baladrón Pazos and Correyero Ruiz 2013). Many
corporates feel the need of effective training for utilize their employee knowledge. In
this century, the rise of corporate universities or training academies is a perfect
example for how they can compete other market player by using of their workforces
knowledge and skills (Jansink, Kwakman, and Streumer 2005). However, the
emergence and decline of corporate universities is closely related to the revolution
and growth of training & development and human resources. The label of corporate
university has become less expressive overtime and innovative method such as talent
management have been occupied it position (Alagaraja and Li 2015).

2. Why Knowledge is a competitive advantage

Knowledge is an indefinable resource of this century. It is more effectively influences

the value of efficiency in an organisation. Knowledge is being the only strategic
resource which is be used as a competitive advantage (Simaškienė and Dromantaitė-
Stancikienė 2014). Competitive advantage is the ability to utilize resources and
features to perform more than their competitors. Knowledge is divided by two types
as explicit and tacit. Combining of knowledge concept and competitive advantage
theories indicate to source of the following research model.
 Figure 1 Knowledge is a competitive advantage
Source: (Ou 2017)

Knowledge
creation and
training
Explicit
knowledge
Knowledge Effectiveness of Competitive
maintenance organisation advantage

Tacit knowledge

Knowledge
transfer

The first part of the research model defines the type of knowledge. Explicit
knowledge more focuses on knowledge creation while tacit knowledge focuses on
transfer the knowledge. The second part of model shows the components of
knowledge. If Corporates effectively handle their knowledge, there will be an
advantage in their cost cutting technologies and their product market (Ou 2017).

3. Why corporates setup universities?

The concept of corporate university is innovative in the terminology of knowledge

and employee management. Since, the interest of learning process, the concept of
corporate universities can be live within the theme of Human Resource
Development(HRD) (Prince and Stewart 2002). Corporate university represents a
strategic level renovation in support of the business. It is support with the strategic
creativities of an organisation. In the competitive global market, organisation forced
to change their learning and developing strategies. Universities perceptibly cannot be
instructing people to directly fit into the organisation. These corporations and
organisations are highly dependent on knowledge source than ever. They are forced
to seek the alternative of traditional universities. Hence, they found the concept of
corporate university (Baladrón Pazos and Correyero Ruiz 2013).
 Figure 2 The need of corporate universities

change the
nature of
provision

Nature of Talent
management Management
The need of
corporate
universities

Change the Change the

leadership context of
approach education

Source: (Blass 2005)

To understand how knowledge management as is significant role for create a
corporate university, it is interesting for some reflexions made by the following
universities namely,
 Tenaris University
 Universidad Corporativa Gas Natural Fenosa (UCGNF)

4. The selected corporate universities

4.1Tenaris University

Tenaris corporation is a manufacturer of seamless and welded steel pipes for gas
pipelines. They headquartered in Luxembourg. They are the supplier of gas
pipelines for South America. They are operating more than ten countries with
almost 22,000 employees. Tenaris believed knowledge is one of the most valuable
assets. So, Tenaris corporation setup Tenaris university global campus at
 Campana, Argentina in the year of 2007. Additionally, they are under developing
campuses in Italy and Mexico. Tenaris university formed for the long-term
training to their salaried employees in Tenaris corporation. Tenaris university was
created to develop and succeed to be the leading in training and development of
knowledge and maintain their product quality. Since, Tenaris corporation
producing high valuable seamless steel pipelines. Tenaris university mission is to
“build and sustain Tenaris’s competitive advantage by capturing, organising,
enriching and transferring knowledge assets”. This university ensures their
employees receive same quality of strategic training worldwide without any
lacking because of geographic location. Once a growth or problem identified,
Tenaris university closely worked to that and establish specific training plan. This
university set up the reason of improve Health, Safety and environment in the
organisation. Moreover, they focused on management develop and cost-cutting
strategies for their products. This university developed several general
programmes for their employees that form to build a common corporate culture
across countries and functional areas.
Figure 3 Training programs in Tenaris university (“General Program -
TenarisUniversity” 2017)
New Hire Orientation

Tenaris University
Induction Camp (TUIC)

International Orientation

Learning programs of
Tenaris university
Management
Development Program

Advance Management
Program

Leadership Program
 These programs helps their employees to develop their skills and knowledge
(“About TenarisUniversity - TenarisUniversity” 2017). This university builds
links through partnerships with some academic universities such as Massachusetts
institute of technology, Cambridge academy of transport for sharing and
supporting knowledge management (“Partners - TenarisUniversity” 2017).

4.2 Universidad Corporativa Gas Natural Fenosa (UCGNF)

Gas Natural Fenosa is a multinational corporation. They are innovator in gas and
electricity integration operating in more than 30 countries with almost 22 million
customers and almost 20,000 employees. Gas Natural Fenosa established their
own corporate university called Universidad Corporativa Gas Natural Fenosa
(UCGNF), the Gas Natural Fenosa Corporate university in the year of 2000. This
was pioneer initiating in the Spanish corporate world (Baladrón Pazos and
Correyero Ruiz 2013). They have six academic centres and 64 classrooms located
in 10 countries. Although, their main goal is to develop all areas of activity of Gas
Natural Fenosa organisation. This university is responsible for managing their
employee’s knowledge at companywide level. This university mission is to
contribute to the growth of expert’s knowledge that help Gas Natural Fenosa’s
vision come to achievement.

Gas Natural Fenosa corporate university identifies training needs with the support
of the human resource management patterns and provides specific training to
ensure their organisation goals. This university also detects, gathers and organises
the standing knowledge within the organisation for competitive advantage in their
market field. They are implementing programs for their professionals, improve
quality pursuing excellence and measuring results. This university training their
employees in the field of leadership and technical design for cost effectiveness
and competitive advantage in the relevant field.

This university setup two separate institutes for improve their professional’s
management knowledge and design skill. Moreover, they are developing and
training their future technical experts. Their advisory council of corporate
university have some external consultants also such as The ESADE Business
 School and Boston Consulting Group (“Corporate University — Gas Natural
Fenosa” 2017).
Figure 4 Type of training institute

Technical Institute

UCGNF

Leadership Institute

Source: (“Corporate University — Gas Natural Fenosa” 2017).

5. Benefits of corporate universities

5.1Benefits for Tenaris Corporation

Tenaris university trains the Tenaris corporation’s employees around the world by
global training programmes and managing careers carefully. This is not only for
developing technical and managerial skills among employees. But, it’s also build
informal network for absorbing common culture and values. According to
(Crocetti 2001), sharing technical skills and practices from experienced employees
to new employees is very beneficial for maintaining organisation quality and
strategies.

Tenaris created new learning model in their training programs. Since, 2015 and
2016 they faced a loss compare than last decade (“Financial Information -
Investors - Tenaris” 2017). The potential benefits of this training programs,
Tenaris corporation improved their market strategies, quality of products and
services, social responsibility and safety environment for employees. In terms of
exclusive learning purposes Tenaris university aims to develop technical skills by
theoretical with experience based (Tacit) knowledge, for improve managerial
skills and recruitment of new employees (Ou 2017).
 Figure 5 Characteristics of Learning model

Source: (“Case Study: The Reinvention of Tenaris’ Corporate University |

Training Magazine” 2017)

New Hire Orientation program of Tenaris university for their new employees to
learn about IT tools, business ethics, health, safety and environment, and
standardization of their product quality. This training create a network between
new and old employees (“New Hire Orientation - General Programs -
TenarisUniversity” 2017). Their Advanced management program and
Management development program is highly beneficial for their management
employees who have been appointed to lead numerous teams. This training
includes people management, managerial skills, decision making and Tenaris
processes and strategies. With the help of this training their management
employees take on more complex assignment and maintain their quality of
services (“Advanced Management - General Programs - TenarisUniversity”
2017). Since, Tenaris knowledge management program is top-notch relation to
their strategic planning and their talent development process to design career
enhancement plan ( Haberer and Kohan, 2007).

5.2Benefits for Gas Natural Fenosa corporation

The training framework of Gas Natural Fenosa corporate university (UCGNF) is

based on learning itinerates. Over the years it has contributed to the human
resources development of all employees both in professional and interpersonal
terms. As measured by the learning objectives of UCGNF, they focused on
creational skill (Explicit) knowledge as well as codified with experience based
(Tacit) knowledge (Ou 2017). This training model called “Value chain of talent”
which is divided into the field of knowledge assessment, development and
involvement. It cross processes of providing training in production process
management. Their knowledge areas regulated electricity market with the strong
power distribution networks (Antonelli, Cappiello, and Pedrini 2013).

5.2.1 Technical Institute

The technical institute training roadmap is the organised and successive
training track that organisation experts must follow to acquire practical
knowledge. In the value chain of talent, 22 processes of business, strategic
and supportive training. In strategic process, UCNGF training their
employees for the management values of strategies, corporate
development, planning, internal control, regulatory, quality, health, safety
and environment. In the support training, they are developing their experts
by human resources, physical assets, safety, financial resources,
information systems, legal, technological, communications and public
relations. They are training handling of energy management and customer
service by business processes. These processes support business through
strategic transformation. In 2015, UCGNF implement another program
called “Smile” to support the process of business. Smile enables the global
distribution and marketing systems to be implemented at Gas Natural
Fenosa corporation which gives the competitive advantage in the relevant
field (“Corporate University — Gas Natural Fenosa” 2017).

5.2.2 Leadership Institute

The function of the leadership institute is to develop leadership
competencies in employees of Gas Natural Fenosa through training and
innovative develop programs. They are encouraging the interpersonal
growth of their employees, associated people throughout their work life.
They are promoting the relationship between senior management and
employees. UCGNF implemented new leadership training model by the
competencies of people management, strategy & innovation, cooperation,
 decision making and execution. They implemented Savia 2.0 program in
the year of 2014 to improve their competitive advantage in the field of
customer services and cooperation. Savia 2.0 benefited to the organisation
in customer quality, change management, empowerment and cooperation
(“Corporate University — Gas Natural Fenosa” 2017).

6. Conclusion
The rise and growth of corporate universities is closely related to the globalisation.
Since, every multinational corporation compete with each competitor in the global
market. The recent change in education policy are being developed with the skills of
leadership, consistency of culture, knowledge production and performance.
Knowledge management can indicate to a plethora of competitive advantage. The
label of corporate university has become less value overtime since talent management
takes its place. The trend of corporate universities is to consider for achieve their
corporate strategy and profit knowledge management centre. But, there is two
significant issues as well as challenges. First one is, there are some substantial and
easily quantifiable costs associated with corporate universities. Second one is, there
are considerable risk involved in the reinforcement of mental settings which can be
harmful for creation and innovation.

7. Recommendations
From the knowledge gained from articles, Tenaris university could be more focus on
technical training rather than management training. Since, they have several
management training programs for their employees. But, they don’t have specific
training for their research & development workers. Moreover, Tenaris corporation
focused on the relationship between senior management and low-level management.
Because, Universidad Corporativa Gas Natural Fenosa have the special program of
Savia 2.0 which contributed to build a relationship between employees. Although
both corporations are working in energy field. So, both corporations more focus on
cost-cutting strategies and talent management. Moreover, traditional universities
educate their students with the quickly adaptation of corporation environment. If
traditional universities do, there is no need of corporate universities. So, corporates
can save huge amount from spending their training and development programs.
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