In today's global economy, driven by intense competition, rapid innovation, and short
product life cycles, what an organization knows and how rapidly it learns, are becoming as
important as what it currently produces (Nonaka, 1994). The pace at which knowledge is
effectively transferred and shared within an organization can considerably affect its competitive
ability and business performance. Knowledge Management (KM) has become the basic premise
at many firms as present day managers comprehend that much of the company's value
depends on the company's capability to generate and manage knowledge. Studies have found that
a substantial part of a firm's stock market value is related to its intangible assets, of
which knowledge is one important component, along with brands, reputations, and unique
business processes (Gu and Lev, 2001).
Organizations are becoming more knowledge intensive, they are hiring `minds'
more than `hands', and the need for leveraging the value of knowledge are increasing
(Wong, 2005). Managing knowledge in organizations requires managing several processes
of knowledge such as creation, storage, sharing and evaluating (Gumus, 2007). Recognizing
the value of knowledge is the key to innovative thinking and corporate investment, and is
the cornerstone to the long-term survival of manufacturing industries (Singh et al., 2006).
The auto component sector in India has emerged as a sunrise sector of the
Indian manufacturing industry navigating through a period of rapid changes driven by
global competition. It has become a key stakeholder in the global automobile
component manufacturing industry. According to the
Auto Component Manufacturers' Association of India (ACMA), the Indian auto component industry has been experiencing a high growth rate
of 20% over the period 2000-05 and is expected to grow at a CAGR of
17% over the period 2006-14. (NASSCOM Report, 2007).
The Indian auto component industry holds a distinctive global competitive advantage
in terms of cost and quality. Innovativeness and cost reduction will help manufacturers to
meet challenge of increasing demand from developed countries. The Indian auto component
industry is very small by global standards and heavily depends on foreign sources of technology
(Singh et al., 2007). The turnover of India's auto component industry is lesser than the
individual annual turnover of a number of global auto component manufacturers (Visteon had
global revenue of US$11.7 bn in 2007 as compared to the India's overall US$10 bn in 2007).
Therefore, barring a few, most auto component units can be categorized as Small
and Medium Enterprises (SMEs) and are consequently dependent on other companies
and institutions for their growth or even survival (Chaturvedi, 2003). SMEs are often regarded
as important innovators in the economy. It is increasingly important for small businesses
to manage their collective intellect (Frey, 2001). Therefore, KM is extremely important for
the Indian economy. |
