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Based on the case study, the key management issue is the relation between managementand employees were bad which had been noticed by Paul Sims. This is because of themanagement of Ancol lack of knowledge management and organizational learning.Knowledge management is the process of managing knowledge to meet existing andfuture needs. In a simple way, knowledge management is all about ‘know-how’ and ‘know-why’.Knowledge management also refer to the implementing systems and practices that increase thesharing of knowledge and information throughout an organization. An effective knowledgemanagement will build a good relationship between the employees and management as well asthe employees will feel satisfied with their job. However, the Ancol’s management was poor inknowledge management. They were lacking in availability of relevant skills and knowledge indoing their responsibilities. According to the case study, many supervisors lacked necessaryinterpersonal skills to discuss the matter with subordinates and had no previous experiences withkeeping attendance of employees. Instead, Paul Sims leveraged the knowledge that he learnedthrough an executive seminar on building trust in workplace and ordered to remove all timeclocks from plant in order to establish new level of credibility and strengthen the relationsbetween management and employees. But, it is clearly showed that the removal of all time clocknot only failed to strengthen the employee-management relation, but also underpinned many ofproblem that have since occurred included productivity dropped due to absenteeism levelsincreased, payroll department could not deduct pay for the amount of time that employees werelate, the administrative workloads increased and the supervisors had to take additionalresponsibilities to keep track of attendance.The case study also show that the management of Ancol Corp poor in organizationallearning. Organizational learning, according to Argyris (1960) as the process of detection andcorrection of errors. In many respects, organizational learning is similar to individual learning.The idea is that organizations learn when the knowledge that their members have is explicitlyknown and codified by the organization. Organization should seek to make as much of what theirmembers do as explicit as possible. If members leave, the explicit knowledge that they developedin their jobs should stay. However, the management of Ancol failed to document and codify thedetailed of the task that had been conducted by the previous plant manager and affected PaulSims carried out a similar things in order to solve the employees-management problem. PaulSims only knew that the previous manager had conducted the similar thing which was theremoval of all time clocks with similar result from Jackson, a plant manager in Potland after acouple months that the time clocks be put back in place. At the same time, Paul Sims also madehis knowledge as a barrier to learn. This is because Paul Sim did not do the research on what hadbeen done by the previous plant manager as well as discuss with the management before hedecided to make a decision. He ordered to remove all time clocks from plant with his belief thatthis approach would strengthen the relationship between employees and management. Thus, withhis action the payroll department could not deduct pay for the employees showed up late andforced to send the warning letter to them. Hence, the relations between employees-managementdeteriorated. Apart from this, the management also seem poor in organizational learning as theyfailed to control the level of absenteeism and the productivity of the plant reduced dramatically.______________________________________________________________________________The main problem of Ancol Corp’s management was lack of knowledge management andpoor in organizational learning. In order to improve knowledge management and organizationallearning, an effective knowledge management system played an important role. Knowledgemanagement system is referred to any kind of IT system that stores and retrieves knowledge,improves collaboration, locates knowledge sources, mines repositories for hidden knowledge,captures and uses knowledge.