Irizar Case Study

Knowledge management (KM) is extolled by some as being an important intangible asset that enhances an organization’s ability to innovate (Chea, 2009). Broadly defined, KM involves a company’s process of obtaining, consolidating, and communicating knowledge to various members of the firm, in which those individuals use the knowledge acquired to make the organization more productive, efficient, and competitive (Mousavizadeh, Harden, Ryan, & Windsor, 2015). The use of knowledge to create innovations involves having an effective KM strategy. Irizar, a company who at one point faced insolvency, represents a firm whose exemplarily knowledge management strategy led to the organization’s innovation and competitive advantage (Forcadell & Guadamillas,

The leaders at Irizar knew that a company’s culture determines the degree to which creative ideas are encouraged, supported, and transformed (Kenny & Reedy, 2006). The new mission of Irizar reinforced the value the organization placed on its workers, as the new process based on people, encouraged teamwork, risk taking, mutual respect, and trust (Forcadell & Guadamillas, 2002). The new strategy had a profound effect, exemplified by the workers reporting high satisfaction levels (Forcadell & Guadamillas, 2002). Literature regarding organizational culture factors and innovation indicate that correctly framed and articulated missions have a positive effect on the organization (Kenny & Reedy, 2006). This implies that Irizar’s workers bought into the corporate philosophy, which helped to garner

The difficulty that companies face lies with the imitation and replication of complex forms of knowledge (Donate & Guadamillas, 2010). In addition, often organizations struggle with knowing how to approach the daunting task of implementing an effective KM strategy (Earl, 2001). Garavelli, Gorgoglione, and Scozzi (2004) theorized that a leader’s management style, along with other variables such as culture and atmosphere, heavily influences an organization’s KM strategy. Evidence from Garvallie’s et al. (2004) study indicates that the star model, developed by the researchers, can assist leaders with assessing the culture of their organizations, and executing a KM approach consistent with the organizational climate (Garavelli et al.,