Knowledge Management and Information Systems

This document discusses the concept of knowledge management and information systems and their importance in improving efficiency and productivity. It focuses on the case of McLaren Automotive Limited and evaluates three models to assess its strengths, weaknesses, opportunities, and threats. The document also provides recommendations for the most appropriate knowledge management information system for improving performance and discusses implementation challenges.

Knowledge management and
Information systems

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1) Organisational introduction and other information............................................................3
2) Three models......................................................................................................................4
3) Recommendations of most appropriate knowledge management information system for
improving performance..........................................................................................................7
4) Three key management implement challenges that might be faced by the entity while
implementing recommendations..........................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Many entities use the concept of knowledge management together with information system
for improving efficiency as well as increasing level of productivity. Knowledge management is
the concept that is closely linked with data technology and it considered as crucial element of
business concerns. Similarly, information system is termed to collection of wide number of
pieces for dissemination information. These are the disciplines which encourages recognising,
capturing, assessing, recovering and allocating entire information with the help of various
systems. McLaren Automotive Limited is selected company for the report which is automotive
manufacturer of innovative sports cars. It was established by Ron Dennis at Surrey, UK. The
automotive business is looking for enhancing its Information Technology infrastructure and is
focusing towards range of management information systems to be amalgamated with other
suitable systems.
The report includes information about the company and evaluation of distinct elements
through three models. It also includes recommendations to company in context to appropriate
information systems and assessment on three implementation challenges that might be faced at
the time of implementing recommendations in the business.
MAIN BODY
1) Organisational introduction and other information
McLaren Automotive Limited is automotive manufacturer of variants of sports cars for
customers across nation. It functions its operations from headquarters that are located in the city
of Surrey, United Kingdom (McLaren Automotive Limited, 2020). It produces its vehicles within
its in house that have designated production facilities. The company is comfortable in breaking
new grounds and makes wide attempts in reinventing wheels through implementing information
systems for leading innovations. Some of its main components are as defined:
Corporate objectives: The main objective of McLaren Automotive Limited is to become
most trusted entity through creating fastest accelerating and high performance supercars addition
to sports cars. Along with this, the company also work with the objectives of fulfilling corporate
responsibilities, supporting education wherever possible. Through corporate objectives, entire
organisational team emphasis towards enclosing front wheels, creating a body which bends at
tails and improving effectiveness within automotive industry.

Overview of business: McLaren Automotive Limited was established by Ron Dennis at
Woking, UK. It has production units in more than 4806 locations across the globe. The mission
statement of the company is to manufacture fastest accelerating cars. The management team of
the company administers entire production and related operations to make available the
demanded cars by the customers (Arvedson, Brodsky and Lefton-Greif, 2019). The models of
cars of the company includes McLaren F1, McLaren 650s, McLaren supercars and hence forth. It
operates in three divisions that are racing, applied technologies as well as automotive.
Corporate structure: In the premises of McLaren Automotive Limited, top management
level follows divisional structure in which workforce is grouped in different functions as per
their interest, knowledge and expertise. Some of functional units of the company includes human
resource, engineering, information technology, quality control, marketing, manufacturing and
general management. The structure tends to ease all workings of each management level and
makes things easier for managers to evaluate workforce as well as performances of all divisions
in effective manner.
Organisational business model: It is said to the plan of entity to make profit. In context to
McLaren Automotive Limited, its business model identifies market needs and accordingly
selling its sports cars and supercars. The target market identified by the entity and expenses
anticipated are part of its business model. Moreover, it also involves ways to attract investments,
motivating management along with workforce and key capabilities (Abdeltawab and Mohamed,
2015).
2) Three models
There are wide number of models available to a business for evaluating its key strengths,
available opportunities, threats and weaknesses. Moreover, external factors are also considered
by managers of company through using suitable model (Bazan and Estevez, 2019). In relevance
with McLaren Automotive Limited, the three models through which environmental factors are
considered, evaluation of strengths, weaknesses, threats together with opportunities and
competitors analysis are as follows:
SWOT ANALYSIS
SWOT Analysis is the study that is undertaken by managers of company for evaluating
internal strengths addition to weakness, its external opportunities together with threats

(Centobelli, Cerchione and Esposito, 2017). The evaluation of these aspects for McLaren
Automotive Limited is the following:
Strengths Weaknesses
 McLaren Automotive Limited is a strong
brand that understands attitudes of
population towards automotives and
according manufacture variants of cars.
 The company offers high quality
automobiles in the market through
applied technologies.
 The prices of cars of the company are
generally very high that are only
affordable by upper class people
(Desportes and Colenbrander, 2016).
 McLaren Automotive Limited
produces fewer models of sports and
super cars that restricts its product
portfolio to some level only.
Opportunities Weaknesses
 McLaren Automotive Limited has
opportunity to manufacture and launch
low cost cars that are affordable by all
segments of society.
 The company can also penetrate in
untapped potential market through
joining hands with other leading brands
(Höpken and Et. Al., 2015).
 McLaren Automotive Limited has
huge threat of intense competition
from giant automotive companies that
are well settled in the industry.
 Technological advancements and
emerging innovations are other threats
for the business.
PESTLE ANALYSIS
External environmental factors are evaluated through PEST Analysis which is effective
model to scan and monitor components related to strategic management. It comprises of four
factors that influences operational strategies of a company to huge extent. In relevance with
McLaren Automotive Limited, the factors are as follows:
Political: It determines the level wherein government influences practices of certain
industry (Laurini, 2018). The political system of United Kingdom is generally strong and
powerful that considers needs to companies and accordingly imposes new duties and other
decisions. The government has taken major decisions to protect its citizens from COVID- 19 in
form of closing work premises so that all people stay at home and stay safe. However, this

decision has impacted on production and efficiency of McLaren Automotive Limited as all its
production units and stores are shut down for some duration.
Economical: The determinant states about impacts of economy’s performance on the
company (Martin, 2017). In UK, economy is market oriented that leads to changes in purchasing
power of buyers and rise in rates of inflation that impacts on prices of cars offered by McLaren
Automotive Limited. Additionally, occurrence of BREXIT also impacted on demand and supply
of the cars of the automotive company in European Unions.
Social: The determinant scrutinise social aspects on market as well as gauges elements
concerned with cultural trends, population analytics and many more. In UK, people are fan of
sports cars and luxury super cars. Along with this, UK’s population also changes their
preferences for cars from time to time that impacts on its sales in market.
Technological: This element pertains with technological automation together with
innovations which influences industrial operations (Melián-González and Bulchand-Gidumal,
2016). Automotive companies in UK make relevant changes within their existing technologies in
order to improve their cars and vehicles. In case with McLaren Automotive Limited, the entity
also invests huge resources in acquiring innovative technologies for manufacturing cars. But, due
to uncertain issues its efficiencies reduced to some level that impacted on its image in market.
PORTERS FIVE FORCE MODEL
Another name of the framework is competitors forces model which was devised by
Michael Porter (Nazim and Mukherjee, 2016). Administrators of McLaren Automotive Limited
uses the model for determining profit abilities of business industry. The forces are as explained
in context to the company:
Competitive rivalry: The force illustrated about the intensity of competition within
particular sector. Within automotive industry, it is seen that competitive rivalry is high as
uncountable companies operate in this field. The main rivals of McLaren Automotive Limited
are Ferrari, Maserati, Bugatti, Tesla, Audi and Porsche as all these entities offers wide variants of
vehicles in the same market.
Threat of substitute: The products or intangible offerings that address similar
requirements of customer but in distinct manner are substitute products (Nguyen, Newby and
Macaulay, 2015). The main substitute of automotive vehicle is public transport that provides
similar facilities to consumers but in least cost. This offers huge facilities at minimum prices than

that of McLaren Automotive Limited that result in inclination to changes in consumer demands
for its cars.
Threat of entrant: The force defines easiness or difficulties for competitors to enter in
the market. To gain entry in automotive industry, it is important for new company to have
absolute cost advantage, strong brand identity and access to inputs. In contrary, McLaren
Automotive Limited is well established brand in the sector that have low entrant threat because
of huge barriers to entry for new business in the company.
Buyers bargaining power: With this force, powers that are in hand of buyers are
examined along with the effects they have on pricing as well as quality of organisational
products (Saponaro and Evans, 2019). Consumers have huge bargaining powers when there are
fewer companies in the industry. But in automobile industry, there are ample companies that
provide sports vehicles and super cars that provide low bargaining power to customers of
McLaren Automotive Limited.
Suppliers bargaining power: The force states about suppliers powers and control to
raise prices that lowers business profitability. In automotive sector, suppliers provide materials
together with additional resources to companies for producing and delivering cars as well as
other vehicles in market. in context to McLaren Automotive Limited, it have multiple supplier
chain that provide low bargaining powers to them as when one of them makes changes in prices
then the entity switches to others for acquiring required materials at least prices.
With the mentioned models, administrators of McLaren Automotive Limited frames
complete picture about strengths, weaknesses, opportunities along with threats of the company in
present scenario. Addition to this, the company also evaluates environmental factors to collect
information about the factors that impacts its operations.
3) Recommendations of most appropriate knowledge management information system for
improving performance
Management information systems are essential components that help companies to make
improvements in the current as well as upcoming performances for gaining corporate objectives
(Savolainen and Ahonen, 2015). These are defined to integrative approaches that provide
relevant information to management and other personal in the company. There are ample number
of information system that can be used by management of McLaren Automotive Limited to
manage daily operations as these systems integrates workings with technology, people,

relationships and company. When management information systems will be properly
implemented in the automotive entity then this will enhance chances of achieving higher
efficiency levels along with accomplishing all corporate objectives on time. Moreover,
management information system generally supports essential functions of business and assist
administrators to strategise operations in the manner that results in competitive edge. It is seen
that information systems are necessary for uplifting information technology infrastructure and
also coordinate its practices with other systems effectively. Few of recommended management
information systems to managers of McLaren Automotive Limited for improving business
performances are as listed:
Transactional processing system: The information system which is primarily designed
for the purpose of collecting, processing together with storing transactions which arises on daily
basis within the business is termed as transactional processing system (Shen, Li and Sun, 2018).
Entire management team of McLaren Automotive Limited is recommended to use transactional
processing system in order to work effectively for recording multiple transactions in sequential
manner even in the situations wherein distinct transactions arises simultaneously. This will
improve performance of the company in current and future aspect through handling large
transaction volumes and modifying required transactions which are done in past if such
requirement arises. Through analysing the transactions, managers will be able to set suitable
strategies to record all types of transactions and maintain records properly so that all of its
corporate objectives are achieved on time that will result in enjoying competitive benefits within
the sector.
Executive information system: Another name for the system is Executive Support System
that is majorly opted by entities to report entire data of the enterprise to top executives.
Departmental managers of McLaren Automotive Limited are recommended to opt Executive
Information System so that it becomes easy to use prepared reports which are offered in
graphical displays for making easy comparisons. Moreover, when this system will be
implemented in the premises then specialised decisions are framed for current as well as future
workings of the company that will help in improving entire business performances addition to
improving quality of decision making (Sitek and Wikarek, 2015). It will be customisable suitable
to the automotive company to meet specific needs of customers for supercars together with
sports cars so that all the corporate objectives are meet on stipulated duration. Furthermore, with

this system, managers will be able to make quick yet effective decision to achieve sustaining
position in the competition and ensuring benefits also.
Management reporting system: This system assists in devising reports about current
operations along with finances at distinct levels in company. Executive professionals of McLaren
Automotive Limited are recommended to use the system for making comparison in the
organisational performance in current era to that of expected performances so that suitable
actions are framed to make improvements in the performances of different departments. Further,
it can be said that upper management of the automotive entity can use the system to make
comparison in financial outputs together with operational efficiency to achieve all corporate
objectives. Addition to this, improved performances will help the company to gain competitive
edge through making wide enhancement in overall practices and tactics to meet sales demand
and maintain position in the field.
Decision support system: In a company, managers use the system for making best
decisions after analysing statistical projections which are prepared through analysing data
(White, Hewitt and Kruck, 2019). It supports workings of organisational managers to frame
decision and improving decision making efficiency through providing forecasts for determing
effective action. McLaren Automotive Limited management team is recommended to implement
decision support system at top management offices for compiling information from wide number
of sources with the objective of framing suitable determinations to work towards achieving its
objectives. Moreover, decisions are also prepared for improving future performance on the basis
of current results in order to gain advantages among rivals.
Management administration of McLaren Automotive Limited makes effective use of
limited information system in the operational practices. Through using the recommended
information system, the company will be able to improve efficiency in future performances. By
using management reporting system, the departmental supervisors of McLaren Automotive
Limited will share capture knowledge from various sources and the same will be shared to top
executives for improving performance and making unexpected attempts in the industry so that
leading positions are made to give competitive threat to other businesses. Addition to this, the
system also assist in making contrast in current workings to that of expected performances for
the aspect of laying standards for achieving future performances in favourable manner that will
aid in objective attainment (Wymore, 2018). For establishing high benchmarks for performances

and strengthening future of company, the system is best for the managers to implement.
Furthermore, it will also assist in enhancing returns on investment, encouraging productivity and
decreasing unnecessary values involved in supply chain through observing and assessing
performances of multiple suppliers to provide materials and delivering the offerings to end
consumers. Through this, delivery of information to targeted clients are analysed properly and
major changes are made in the systems that reduces unproductive costs and help in managing
revenue margins. Decision support system is used for making determinations about tactics,
strategies and procedures to be implemented by the entity after going through gathered statistical
data. It will help McLaren Automotive Limited to manage relations with different types of
customers and influence them to buy the cars which are manufactured by it. Moreover, the
system improves efficiency among executives, marketers, managers and administrators through
compiling collected information and reaching on strong course of action that benefits
organisation as whole.
In the dynamic business scenario, all firms have performance objectives that act as
roadmap to guide in entire journey for attaining performances up to the mark (Arvedson,
Brodsky and Lefton-Greif, 2019). In relevance to McLaren Automotive Limited, its performance
objectives are as follows:
 To increase flexibility in business operations: Flexibility is key in operations of
company as it helps in making fast changes in procedures of manufacturing and others as
per changing market situations. The managers of McLaren Automotive Limited have set
the performance objective that is to increase level of flexibility on business operations.
This will help in matching demands and requirements of clients on time and holding
competitive edge in the sector.
 To minimise production costs: Costs is considered as essential element for entities that
are completely dependent on rates. It is well said that the lower product costs are kept by
the company, the less they face issues in market. Now a days, entities do not compete on
the basis of prices but still prefers to keep them low as possible (Centobelli, Cerchione
and Esposito, 2017). Same is McLaren Automotive Limited and for this, it has set
performance objective of minimising production costs and growing business in different
areas of globe.

4) Three key management implement challenges that might be faced by the entity while
implementing recommendations
There are ample challenges that management team of a company faces at the time of
implementing effective management information system in actual existence (Höpken and Et. Al.,
2015). In regards to McLaren Automotive Limited, certain issues are as stated:
Business challenges: While setting management information systems, McLaren Automotive
Limited can face business challenges as various numbers of practices and programs are modified
as per implemented system. This might create huge issues in managing functions and operations
of business. Moreover, the managers will require adjusting in entire new surroundings and focus
whether workings are performed as per new systems or not that creates huge burden on them
which restrict them to emphasis towards other workings that is necessary to achieve objectives.
When new information system are adopted then wide challenges are faced in business that limit
them to produce in effective manner which can lead to influence its performances in the
competitive environment.
Storing data and information: Through implementing information systems, it can become
quite challenging for the company to store data together with information in the understandable
and easily accessible manner (Nazim and Mukherjee, 2016). It is because the information
systems are completely new to company and the management team may not have effective
knowledge to work in sequential manner for storing information in desired manner, un case with
managers of McLaren Automotive Limited, it might become cumbersome difficult to store data
with new systems as they were doing in past. When the data are not stored properly then it will
become challenging to tale decisions and will also impact on sustaining in the industry for
longer.
Employee resistance: At the time when some changes are implemented in organisation then
employees are the one that resist adopting the changes and this might create issues to business
managers. Management information systems generally requires working in new ways or
mechanisms and also changes requirement of attributes, skill set and business culture that
employees are unable to handle. Setting management information system at McLaren
Automotive Limited will result in changing traditional working to new procedures and usage of
advanced technologies which might create fear among employees related to job security or other
that results in resistance for work with the new systems.

It is essential for executives of McLaren Automotive Limited to forecast issues that might
arise while setting new information systems in premises as they might result in the situations that
the company will fail to handle. Moreover, the entity should also prepare themselves for new
procedures to gain corporate and performance objectives through effective recommended
information system (Saponaro and Evans, 2019).
CONCLUSION
The discussion concludes importance of knowledge management as well as information
system in the business unit to gain success. With knowledge management, all the important data
and information are effectively handled within commercial firm. Corporate objectives, business
models and organisational structures are key in company as they act as roadmap to entity for
reaching success or great heights. Main modes that are opted for evaluation purposes are SWOT
analysis, Porters forces model and PEST analysis which assists in monitoring environmental
factors together with competition in the industry. Management information system which are
recommended to the business organisation are decision support system, executive information
system, management reporting system and transactional processing system for streamlining
entire business practices to meet corporate objectives and achieving competitive edge. Common
challenges that might be experienced by the management in implementing system include
business complexities, employee resistance and storing information in proper format.

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Online:
McLaren Automotive Limited. 2020. [Online]. Available through: < https://cars.mclaren.com/>