Chapter 10 - Minicase 2

Chevron’s Knowledge Management Initiatives Cook with Gas

In preparation for answering the questions, review the ChevronTexaco web site.

1. What is meant by a learning organization?

   A learning organization creates and disseminates knowledge. It adapts quickly to new and rapidly changing characteristics of the environment, like new technology, laws regulations, and customer expectations.

2. Describe the gains that Chevron experienced through its knowledge management programs.

   In 6 years Chevron achieved an operating cost savings of $2 billion.

3. To what different areas did Chevron apply knowledge management, and how successful were they?

   The areas where Chevron applied knowledge management include drilling, refining, document management and capital projects. All areas experienced success and most helped to establish best practices. For example, DocMan produced a 95 % ROI over 5 years.

4. Why is important to document cost savings of knowledge management systems?

   Senior management must see practical benefits and actual cost savings for any project, including knowledge management, to receive continuing support for staff assignments budget funding.

5. If dramatic payoffs can be achieved through knowledge management (as with the DocMan system), why don’t more companies do so?

   Companies may not know about the technology and how it can be used in their own organization. Cultural factors are often a roadblock to knowledge sharing. Human resistance to change is another factor. It can be difficult to sell knowledge management because the descriptions often sounds vague and abstract. Senior management may not support the endeavor because it is poorly explained.