Strategy is in Knowledge Management(17)

Global Mando, strategy is in knowledge management

Under this background, in application of the Resource-Based View, Mando's strategic initiatives can be analyzed as following: 

Defining Resources: When the crisis hit the company, Mando looked around the entire organization and tried to devise strategic plans. And the answer was in human capital. It is because Mando believed that it had most powerful and core resources of human capital. It was the employees who possessed the expertise and know-how desperately needed for the corporate survival.

Strategy is in Knowledge Management(16)

Global Mando, strategy is in knowledge management

Starting in 2006, Mando designated the knowledge asset assessment and management system as the top priority of CKO (Chief Knowledge Officer). Consequently, Mando set up the overt goal and evaluated the performance of knowledge management, which brought the active participation of the employee and never-ending commitment of the management. On top of that, Mando has changed the corporate culture so that employees can freely use the communities of practice into works. 

For example, through community of practice activities, employees defined what Mando's core competency was in terms of the competitive advantage and recreated core knowledge. Additionally, in pursuit of global communities of practice between oversea investors and partners, Mando widened knowledge management activities even outside the company.

Strategy is in Knowledge Management(15)

Global Mando, strategy is in knowledge management

According to the company, productivity was estimated to escalate by more than 200% and 20 billion won-equivalent outcomes were achieved due to the global R&D knowledge management. Besides, Mando did full-page revision of its intellectual assets such as company codes, information system manuals and quality management system into a 'global Mando standard manual'. 

One of the distinguished aspects of the Mando's knowledge management is the unique performance evaluation indexes. Mando came up with its own evaluation tools which measure how much knowledge management contributed to the corporate performance on the strategic purpose.

Strategy is in Knowledge Management(14)

Global Mando, strategy is in knowledge management

It was due to Mando's sharing of real-time information of domestic, overseas research centers and factories. This sharing also narrowed information gap and even expanded the knowledge scope of the organization. Throughout all these, Mando perfectly established a 'global cooperation system' in the most strategic way. 

Moreover, Mado also cut down management costs and enhanced customer satisfaction by maintaining the concrete production information and improving the product quality. All of them led to the upgrade of Mando's global management ability.

Strategy is in Knowledge Management(13)

Global Mando, strategy is in knowledge management

In the same context, PLM program enabled research centers, domestic factories and overseas investors to share information on technology, parts development and product specification management.

Thanks to this innovation, Mando could dramatically reduce customer complaints and costs in quality control and inventory, all of which had caused big fraction in and outside of the organization. 

Strategy is in Knowledge Management(12)

Global Mando, strategy is in knowledge management

Furthermore the center established and operated the optimal 'global R&D response system' by collecting customer demands and technology information in close cooperation with research centers in Beijing and India, technology centers in America and Germany. 

'Global Specification Management System' is the best example. From the planning stage to the mass production and quality control level, product information of both domestic and overseas investors and partners was efficiently exchanged throughout the whole process of product development.

Strategy is in Knowledge Management(11)

Global Mando, strategy is in knowledge management

In doing so, Mando shortened the required time for the development of new technology and invigorated R&D. At the same time, by compiling knowledge through community of practice activities, Mando encouraged all employees see and learn the know-how of in-house experts. 

Mando's knowledge management does not just stay in sharing, utilizing and creating corporate knowledge. Rather, it advances to global network which ties foreign investors and partners together. The central research center in Korea led the development projects of the new technology and global R&D. 

Strategy is in Knowledge Management(10)

Global Mando, strategy is in knowledge management

Right after the development project of the intelligent car began, in-house experts armed with related knowledge and experiences immediately rushed to the corporate research centers. 

These experts who had been at Mando at least over 5 years were the owners of core technologies in their own R&D (Research and Development) area. They acted as go-betweens to transplant their knowledge into co-workers who joined the development project.

Strategy is in Knowledge Management(9)

Global Mando, strategy is in knowledge management

As an example, let’s talk about the intelligent car project which was under development at that moment. The central research center was deeply involved in advanced development. In other words, the central research center mainly provided the concept of technology and devised necessary electronic and controlling technology. 

Furthermore, the center performed prototype tests as well. In the meantime, once the quality and specifications of a product fixed, local research centers took the responsibility of the mass production and after sale services.

Strategy is in Knowledge Management(8)

Global Mando, strategy is in knowledge management

The very secret of knowledge management, which constitutes the biggest part of corporate strategy, is found out in the flip side of Mando’s success story. First, in virtue of knowledge management, Mando initiated enterprise-level changes and innovation. 

Additionally, as a knowledge-based company, Mando enhanced its competitiveness in technology by sharing knowledge throughout the organization. Moreover, as a result of close cooperation between central and local research centers located all around Korea, great amount of new knowledge was endlessly being created.

Strategy is in Knowledge Management(7)

Global Mando, strategy is in knowledge management

Performance and safety of a car highly relies upon the quality of core parts, to name a few, breaks, suspension and steering. Mando succeeded in achieving world-class competitiveness in the development and production of core parts through knowledge management. 

Other than Hyundai Motors, a long-time Korean customer, GM, Ford and Daimler-Chrysler also became new buyers of Mando. And this vividly shows even American 'Big 3' highly values Mando's technological capability.

Strategy is in Knowledge Management(6)

Global Mando, strategy is in knowledge management

In the wake of Asian financial crisis back in 1997-1998, Mando went bankrupt and froze out all corporate expenditures. However, Mando strategically didn't stop investment in knowledge management. As a result, Mando finally revived with 41 billion won in net profit in 2008. 

With high recognition of Mando's knowledge management, Korea's top business daily, MAEIL Business Newspaper and BOOZALLEN Korea awarded Mando the best prize in knowledge management in 2007. In fact, Mr. Oh Sang Su, CEO and president of Mando in 2007, valued knowledge management as the indispensible part of the corporate strategy.

Strategy is in Knowledge Management(5)

Global Mando, strategy is in knowledge management

In addition, Mando's knowledge management implies a lot to the Korean corporate sector. Mando is the first Korean company which developed its own performance evaluation indexes and used it to measure how much knowledge management contributed to the corporate performance and how big the net value of key assets are. 

In doing so, Mando could manage the goals of knowledge management effectively and make strategic successes consequently.

Strategy is in Knowledge Management(4)

Global Mando, strategy is in knowledge management

Mando's competitive advantage lies in knowledge management through which all employees share, utilize and recreate core knowledge of the organization. Thus, the essence of Mando's knowledge management as the core organizational strategy can be defined as not mere 'information system' rather something 'human-based'.  

It is because Mando has been endlessly raking values by inserting the clothes of knowledge management on the top of information system.

Strategy is in Knowledge Management(3)

Global Mando, strategy is in knowledge management

In this regard, Mando Corporation, unlisted, one of the top Korean auto parts suppliers whose sales reached 1,575 billion won in 2008, is sure to be the best example. By making strategic decisions of fully concentrating on knowledge management in time of the big crisis, Mando showed splendid performance over the considerable amount of period.

Let's take a look at Mando’s strategic movement especially focusing on knowledge management so that the significance of strategy can be enlightened in this fast-changing era once again. Regarding the question of strategic management, how Mando originates its own strategy and secure competitiveness?