Report on Knowledge Management at Amazon Inc

Published: 2021/11/15
Number of words: 4799

1.0 Executive Summary

The report explores Amazon’s approaches to knowledge management and provides recommendations that can help improve operations within the organization. Knowledge management approaches adopted by company impact operations in a significant manner. For instance, profitability in a company is affected by knowledge and skills that is available within an organization. First, the paper explores an internal analysis on knowledge management approaches in a bid to ascertain how effective they are in promoting efficiency. Second, the report captures external knowledge analysis of the company’s approaches to KM. Equally, the paper gives recommendations that are necessary for Amazon to improve its operations within the industry. The giant tech company is a suitable case for this study and there is a need to utilize existing literature for a deeper understating of the same. The report is a development that can help promote and change the scope of operations for the giant tech company in a significant manner.

2.0 Introduction

Amazon Inc. is one of the largest tech companies in the world that have gained popularity in the last few years. The e-commerce sector has emerged to attract interest from many people and investors in the world to a large extent (Hislop, Bosua and Helms, 2018). The US based company specializes in e-commerce, cloud computing, digital streaming and artificial intelligence. It is important to note that approaches to knowledge management at any organization have a significant impact on operations. The report aims to explore Amazon’s strategic approaches to knowledge management as one of the most influential aspects to effective and efficient business operations. Examining knowledge management requires one to explore both internal and external strategies that are in place (Maital and Seshadri, 2012). Amazon is a large company with links to other organizations and examining how it manages information, data and content will be helpful towards gaining a deeper understanding on the topic of discussion (Alavi and Leidner, 2001). An examination on existing literature and company reports can be helpful in increasing the scope of knowledge on factors that influence business success in a specific industry (Ahmed and Shepherd, 2010). It is important to highlight that Amazon operates in an industry that is reliant in technology and examining knowledge management will be useful towards informing practice.

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3.0 Amazon Inc. Overview

Amazon Inc. is well known for its strategic approach towards handling of business in the 21st century. It is important to examine its mission statement and values to determine whether they align with set objectives (Mathew and Varia, 2014). For instance, its mission statement is based on customer obsession and does not focus on competitors. The company aims to become the most customer-centric company in the industry in a bid to gain a competitive advantage (Easterby-Smith and Lyles, 2011). Both the mission and vision statement at the company align with its strategy, which is to become a valuable company in society. An examination on company values at Amazon indicates that customer obsession is the first priority during its operations (Majed, Nuraddin and Hama, 2018). The giant tech company purposes on inventing new products and simplifying services for people in a manner that promotes its purpose. It is the duty of the management at Amazon Inc. to ensure that the right strategies are put in place to met set standards and goals within the consumer market. The organization has utilized technology in a manner that has helped it gain more customer base and rise to the top in the industry (Maital and Seshadri, 2012). The fact that the company meets its objectives through strategic knowledge management has made it more popular in the recent past.

The application of artificial intelligence in its business operations has had a big impact on the market in a significant manner (Ahmed and Shepherd, 2010). Technological interventions have been pillars to strategic planning and execution of various tasks. Amazon manages its employees well in a manner that helps improve loyalty and service delivery. The fact that the company has developed an online platform that has promoted online shopping through the internet is an indication of its commitment towards meeting set goals and objectives in the market (Vakulenko et al., 2019). It is important to note that the company has automated many processes including hiring and firing of employees. Such aspects in operations play an important role in shaping organizational culture and structure. The company has done well to educate its employees in a bid to improve their customer handling skills. For instance, employees’ welfare must be taken 9nto account as it affects the output of an individual (Hislop, Bosua and Helms, 2018). Much should be done by the tech company in utilizing knowledge and resources as key prerequisites for business success in the market. Company values, mission, and vision statements are aligned to strategies in place in a bid to achieve set objectives regarding business ambitions.

4.0 Internal Knowledge Management at Amazon

The SECI model can be applied to explain the approaches that the company uses in the market in regards to knowledge management at the company. It is crucial to explores the scope of the model and establish how conceptual it is in handling knowledge within an organization (Mathew and Varia, 2014). The model constitutes of four common processes that organizations use to manage their knowledge. The first step is socialization that involves sharing of tacit knowledge through practice, observation, imitation, and participation in informal and formal processes within n organization. The company has one well in the past to adopt the SECI model that has helped the organization manage its information well. The second aspect of the model is externalization that involves articulating tacit knowledge into explicit concepts (Majed, Nuraddin and Hama, 2018). It is important that an organization devises strategic approaches that can help it externalize information for improved management of such information. The third step is combination where there is a need to integrate information into the knowledge system (Correll et al., 2016). Lastly, the model captures internalization that involves embodying explicit knowledge into tacit knowledge. The model is effective in helping Amazon gather the right information and manage its knowledge well.

4.1 Integrated Methods to Communication

It is important to note that the company has adopted an integrated approach towards communication during its activities. The role of communication in promoting operations and promoting knowledge within an organization such as Amazon cannot be overlooked (Muninger, Hammedi and Mahr, 2019). It is through communication that staff within an organization can communicate and share with each other on matter affecting productivity. Poor communication approaches in an organization is detrimental to efforts of improving on the operations. Conventional approaches to communication were not as efficient as digital methods that can be employed by various organizations. A combination of the two approaches o communication produces the best results for any organization and it is important that Amazon utilizes both approaches (Wiig, 1997). The emergence of smartphones is another boost to the operations of the company as many people can assess information regarding various products in a convenient manner. Internet accessibility from remote location has boosted communication efforts for the company as customers can reach out to the platform without many problems (Maital and Seshadri, 2012). Both conventional and digital approaches to communication at Amazon have proved to be useful in promoting business operations in a significant manner. Failure to incorporate the two approaches to communication might prove detrimental to efforts of administering success within the organization.

Social media platforms have proved to be an important factor in promoting communication approaches employed by Amazon. Most people across the world utilize social media platforms such as Facebook, Twitter, YouTube and Instagram to communicate intentions to customers within various marketing (Onyusheva and Seenalasataporn, 2018). In essence, Amazon utilizes social media to create awareness of the various products they have in place for customers. It is important to note that social media platforms are utilized to run advertisements and other promotions that have boosted company operations in a significant manner. The company has created profiles on various social media platforms that have proved strategic in communicating and reaching out to customers (Quintas, Lefrere and Jones, 1997). Equally, the fact that customers can make inquiries from remote locations in a convenient manner is indicative of strategic approaches that are in place for communication. Amazon has an established online platform with a customizable front page for each client or customer. People can utilize the platform to shop for various products that are sold from remote locations in a convenient manner (Uden et al., 2014). In essence, integrated marketing and communications approach utilized the company has been a pillar in promoting operations and increasing profitability in the market.

4.2 Implementation Strategies

It is vital that the report examines implementation strategies that are applied ensuring that knowledge management is handled in the right manner. The most common approach applied by the company is bottom up where information from grassroots is communicated to higher ranks within the company (Muninger, Hammedi and Mahr, 2019). For instance, a customer can raise a complaint to the management on the quality of service received. Such information is crucial in decision making and correcting mistakes that can cost the company its brand name. It is the duty of management to improve strategies that can increase collection of useful information for decision making in future (Onyusheva and Seenalasataporn, 2018). Knowledge within the organization under the model starts at low levels without much support from the management. The approach is strategic as it addresses issues that are important in shaping operations of an organization (Nisar, Prabhakar and Strakova, 2019). Another approach applied by the company in implementing its strategy is top down where the management asks people within the organization to manage knowledge. Amazon utilizes both models to communication as information collected is essential in decision making (Trott, 2011). In most cases, the top down approach works to ensure that operational objectives are achieved. It is through the right implementation of policies that organizations such as Amazon can manage their knowledge well.

Another important approach that is used by the company to administer knowledge management is through trials and fails in the market. It is vital to highlight that there are programs that the company has rolled before but have failed to make an impact in the market (Onyusheva and Seenalasataporn, 2018). The company comes up with a strategic framework that operates to ensure that trials and pilots are conducted as a way of gathering the right information. The management should be at the forefront of advancing the right practices that can promote implementation of knowledge management approaches. Amazon is a top retailer that should purpose to manage its knowledge well in a bid to improve and increase its profitability within the market. It is important to note information and communication are pillars that should be considered in establishing the right strategy for operation. Designing of a framework that can control aspects of knowledge management implementation can be a step towards gaining ca competitive edge within the market (Dillaway, 2021). In essence, Amazon has managed to handle information and knowledge in a manner that has led to increased operations within the market. More strategic implementation approaches should be used to enhance flow of information in a way that benefits operations for Amazon.

5.0 External Knowledge Analysis at Amazon Inc

Examining external approaches to knowledge handling at the company is an important aspect towards gaining a deeper understanding on the operations of Amazon (De Long and Fahey, 2000). An external analysis examines strategies that are applied in handling knowledge from an outside point of view (Mergel, 2016). For instance, understanding knowledge protection at the company and approaches to sourcing of the same information can prove helpful in increasing the scope of information on the same. Open innovation and knowledge protection are among crucial aspects that the report seeks to explore.

5.1 Open Innovation

Innovation involves the process of coming up with something better than what exists in the market. Amazon has been at the forefront of supporting innovative exercises that have ended up changing the world in one way or the other (Mergel, 2016). For instance, the development of the prime option on the company’s platform has helped customers connect with products from other companies that operate within the industry. Prime guarantees users fast and free shipping for one thousand items, which has helped Amazon build a good brand name. One-click purchases on Amazon website is another development that has made the scope of shopping easier and faster. Other websites might be inappropriate as one would need to fill many forms before making a purchase (Muninger, Hammedi and Mahr, 2019). Equally, development o the dash button by the company has helped many people and made online shopping a whole different experience. It facilitates Amazon’s one-click ordering once initiated, which illustrates how innovation has been utilized externally. External knowledge handling within Amazon has promoted business operations through innovative processes. Cloud computing is another crucial innovative development that Amazon has established in the last few years (Tou et al., 2019). The company built the cloud computing infrastructure to help improve web services but has since started providing the same services to other organizations. In essence, open innovative processes at Amazon have yielded fruit by promoting knowledge handling at the organization.

5.2 Amazon Competitors

It is important for the report to assess Amazon’s competitors and establish how the company handles its knowledge in regards to the same. Amazon competes with a number of competitors in the industry and it has become a leader in online retailing (Trott, 2011). There are different segments in that Amazon operates in the industry to include online stores, physical stores, Third-party seller services, subscription services and Amazon Web Services. Each segment in the market has its competitors who have established platforms. For instance, in online retailing, Amazon competes with established organizations such as Overstock Vip Shop Holdings. The company has done well to maintain a good relationship with its competitors in a bid to promote healthy business (Zennyo, 2020). Cloud computing approach that the company established has helped maintain a record of data on consumers and suppliers. Such information can be useful in designing approaches to promote efficiency and convenience over its competitors. Competition in the industry is high and there is a need to advance it operation and provide improved services to customers (Tou et al., 2019). A high level of competition in the industry has promoted strategic partnerships that see both companies benefit from the same. Amazon has been at the forefront of maintain a good relationship with competitors in a bid to promote profitability and access to knowledge.

5.3 Knowledge Protection

It is important to examine how the company protects its information from getting into unauthorized hands. The company employs encryption that has helped them maintain a good relationship with users and customers (Dillaway, 2021). It is important to highlight that the management at the company adheres to the Payment Card Industry Data Security Standard that helps it when handling credit card data. Loss of credit card data can be detrimental to efforts of a company gaining trust and maintaining its competitive edge. Amazon maintains physical, procedural and electronic safeguards in connection with collection, storage and disclosure of personal information for users (Dixit, Clouse and Turken, 2019). Devices from Amazon are protected from information loss and access from unauthorized individuals. In essence, Amazon uses rigorous processes that have proved strategic towards handling of privacy of information, which is a major concern for many customers across the world. The company has developed both formal and informal networks that work harmoniously to ensure that the company performs well to gain a competitive advantage (Peprah et al., 2021). Equally, the company ensures that customers do not get access to information that does not concern them in any way. Such strategies have been in successful in helping the organization do better in the market.

6.0 Evaluation and Recommendations

The report should focus on conducting an evaluation on strategies that company applies in managing its people and provide the necessary recommendations that should be put in place to improve operations (Peprah et al., 2021). The company communicates with its customers on online platform and provides instant feedback to queries. Examining its strategy to handling of information can inform many of the need to adopt appropriate approaches to promoting efficiency and convenience in business.

6.1 Evaluation

Amazon uses an innovative strategy that has seen it improve it operations in many markets across the world. The development of brick-and-mortar services for customers marked the begging of a new online shopping experience that attracted its competitors (Majed, Nuraddin and Hama, 2018). The innovative strategy that it applies in handling knowledge has led to other developments that have promoted the experience of online shopping. Equally, introduction of free and fast delivery within the first one thousand items on prime has made the company gain more popularity in the market. Another important strategy that Amazon applies in maintaining it knowledge management approaches is integrated methods to communication (Dixit, Clouse and Turken, 2019). The company allows for instant feedback and can help provide suggestions to individuals while shopping online. The innovative strategy has proved fruitful for the company as many developments continue attracting people on a daily basis. In essence, Amazon is an established company that applies a strategic approach of innovation to advance its operations within the market (Peprah et al., 2021). The failure to employ innovation as strategy in any organization might be detrimental to efforts of managing knowledge well within the same firm. Social media platforms should be utilized to advance communication and hence knowledge within a company.

Another important strategy that Amazon uses is its model of business that has since attracted many players in the industry. Online retailing is on the rise recently due to increased use of technology (Vakulenko et al., 2019). The company adopted a strategic approach to conduct business online and reduce costs associated with running of numerous physical stores. Online shopping provides customers with a convenient and appropriate approach that can help reduce time wastage. The fact that most people prefer convenience and efficiency gives Amazon an upper-hand in its business operations. It is also important to note that the company has formed strategic agreements with suppliers and customers in a bid to enhance trust and improve working relationships. The giant tech company has made agreements with several suppliers who sell their products directly on its e-commerce platform (Dixit, Clouse and Turken, 2019). Application of digital technology in promoting business is another strategy that the company has embraced in its operations. The organization can do better and promote operations through proper management of knowledge and other activities in the industry.

6.2 Recommendations

It is vital to derive recommendations that can help Amazon Inc. improve its operations and increase profitability. Proper approaches to knowledge management help in improving skills and ways of increasing profitability within an industry (Majed, Nuraddin and Hama, 2018). Amazon has done in the recent past to employ digital approaches to handling of business. The first recommendation for the company is to organize for leadership training programs for all employees and managers within the firm. It is important to note that education can promote skills and professionalism in handling customers in the market (Vakulenko et al., 2019). Poor leadership approaches from the company have seen it face criticism in the recent past. Much needs to be done to ensure that each employee is well trained and skilled for the job in a bid to improve the delivery of services. Digital approaches to gathering and disseminating information should be overlooked as they can help advance operations in the market. For instance, application of big data analytics can prove to be strategic towards storage of a large pool of information, which is useful for future decision making (Dixit, Clouse and Turken, 2019). Companies across the world that have adopted the right approaches to communication and knowledge management have proved to be efficient in each operation. Information gathering can be a tool fo0r transformation and adoption of the right strategies that can speed up change within an organization.

The second recommendation for the company is to improve its people management approaches as they impact information flow. It is through different models that the organization has managed to gather information on an internal and external level in the recent past (Dixit, Clouse and Turken, 2019). The bottom up approach implementation helps the company gather information that could prove useful in future decision making. Poor leadership style in the organization has attracted criticism in the past as some workers have been treated in an unfair manner (Vakulenko et al., 2019). For instance, the process of hiring new employees and joining hands with suppliers should be transparent and supportive of ethical conduct. Failure to pay employees the right wages can attract failure or discouragement when performing various duties. Leadership abilities for employees can be improved through developmental programs and training (Majed, Nuraddin and Hama, 2018). Equally, there is a need to improve its coverage to other markets as a way of extending ways to gather information on operations within the industry. Improving approaches to handling of information and protecting the same knowledge might prove strategic in promoting performance at Amazon.

Using big data analytics and artificial intelligence can help the organization make an impact in the consumer market (Misra, Hariharan and Khaneja, 2003). It is important to note that collecting information on digital platforms can help create a large pool of information regarding knowledge management. It is through artificial intelligence that individuals and organizations can manage to gather necessary reviews and feedback on the quality of service that they receive. Poor knowledge management approaches can be detrimental to efforts that can promote innovation in an organization (McAdam, 2000). It is recommended that technology used as a tool that enhances knowledge management at Amazon Inc. The company ensures receives reviews from customer for services rendered and it is important to explore how important such information is to the organization. Feedback essentially entails important aspects on operations that customers present after purchasing or having an experience with the company (Vakulenko et al., 2019). Customer feedback has been a pillar and source of information that is important for future decision making. It is through such information that many multinational companies can predict trends in the market for informed decisions. The feedback customers provide is normally used to plan future activities and understand aspects of consumer behavior. Collecting such information would be strategic toward assessing and understanding trends that impact knowledge management approaches.

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The most strategic approach that most firms can partner with Amazon is by selling their products on its e-commerce platform. For instance, Chico’s is a women brand company that resolved to sell their products on the Amazon platform (Zennyo, 2020). It is important to highlight that the company has since improved its sales and faces an imminent growth in its operations. Another strategic alliance that the company has formed before involves Kohl’s that started accepting Amazon returns across all their outlets. The move was made an aimed at increasing traffic towards their stores that are distributed countrywide (Vakulenko et al., 2019). It is important to note that there are many suppliers who join hands with Amazon on a daily basis in a bid to promote their businesses. According to statistics, over 20 companies that have joined strategic hands with Amazon made over 10% of their revenue from online sales on the company’s platform. The bargaining power of suppliers is an important aspect that should be considered when handling operations within the organization (Dillaway, 2021). The high number of suppliers that the company has accumulated makes them lose their bargaining powers within the industry. The fact that Amazon has an established brick-and-mortar system for making purchases has attracted many suppliers who now sell their products on its online store.

7.0 Conclusion

To sum it up, the report explores Amazon as a giant online retailer that has taken the world by storm, especially in developed markets. Knowledge management in an organization is an important aspect that should be considered in a bid to promote performance. Information is crucial in decision making and failure to manage information well can be detrimental to efforts of promoting operations. Amazon uses different strategies in managing information internally and externally including incorporation of traditional and digital methods of communication. For instance, adopting innovative practices in the company has led to increased operations in a significant manner. Equally, being innovative has led to development of new strategies in shopping that have shaped experiences for many customers on a global front. The prime option promotes fast and free delivery for products to customers for the first one thousand items. Externally, the company relies on innovation and an online business model that have both proved important in promoting operations in the industry. In essence, the report lays emphasis on internal and external approaches to management of knowledge within Amazon as a giant in the industry. Application of the right approaches to KM will be strategic towards promoting profitability for organizations such as Amazon.


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