DescribingDell`s approach to cultivating relationships with customers andvendor partners, Malhotra noted that it was through its allianceswith partners such as EMC that Dell was able to leverage theirresearch on product innovation while using its resources andconcentrating on perfecting the linkages with customers as well assuppliers. What aspect of Dell`s efforts to increase relationshipcapital with suppliers and customers had the greatest positiveeffects on organizational performance? Why?

Giventhe changes which have occurred in the 21stcentury that have tilted the balance towards the information-basedeconomy, customers have become a crucial resource that provides thedata to the organization (Magretta, 2013). Suppliers and customersinteract with the organization using different channels.Organizations, then, strive to control and manage the channel and thestrategic activities within the organization to develop activitiesfor each of the channels. In this light, complex relationshipmanagement becomes the hallmark for the new way of addressing variousaspects in the global economy. The IT architecture is vital in thisnew mode of conducting affairs (Magretta, 2013).

Increasingrelationship capital with customer and suppliers through a directmodel has conferred immense benefits to Dell. First, Dell has beenable to deal with the internal suppliers in a smooth way because aplatform where sharing and exchange of information has been madepossible (Magretta, 2013). Dell has been able to share designdatabases and techniques with suppliers, which has speeded the timeto market. His has also created a lot of value that has been sharedby both the suppliers and buyers.

Malhotrastresses the important role of suppliers and customers play in thenew economy and the significance of initiating ways of getting closerto both players (Malhotra, 2005). The new market is driven byinformation and has become increasingly intricate. With the unceasingdemand for robust systems, an organization needs to generate ITarchitecture that are intimate with customers and suppliers. Dell hasbeen able to sell directly to customers and create products that meettheir expectation (Fisher, 2015). This has been achieved through theremoval of reseller’s markup, risks and costs connected tomaintaining large inventory of final products. The strategy that hascome to be known as direct business model, has given Dell Corporationa substantial cost advantage (Magretta, 2013).

Anexcellent rapport with clients has allowed Dell to leverage therelationship with both customers and suppliers. Technology has beenused to blur traditional boundaries in the value chain amongmanufacturers, suppliers and customers (Magretta, 2013). The keyelements in Dell’s model are focus on customers, supplierscollaboration, mass customization, and manufacturing at the righttime (Fisher, 2015). Virtual integration exploits economic benefitsfrom two dissimilar business models. It provides advantage of afirmly synchronized supply chain that conventionally emanate fromvertical integration. At one fell swoop, it benefits from the focusand specialization that fuel virtual organizations (Fisher, 2015). It is evident that virtual integration will become one of the mostimportant organizational model in the new economy sailing in theinformation age.


Fisher,M.L. (2015). Inside Dell Computer Corporation: Managing WorkingCapital. PwcStrategy Business, Issue 10.

Magretta,J. (2013).The Power of Virtual Integration: An Interview with DellComputer’s Michael Dell. HarvardBusiness Review.

Malhotra,Y. (2005).Integrating knowledge management technologies inorganizational business processes: getting real time enterprises todeliver real business performance. Journalof Knowledge Management Volume 9 Number 1 2005 pp. 7-28



Snyder,Wenger, and McDermott suggest that practice-based learningcommunities have been in existence since the dawn of man. They go onto claim that knowledge has become the key to success and that it issimply too valuable of a resource to be left to chance. Therefore,companies need to understand precisely what knowledge will give thema global competitive advantage. How can organizations best cultivatecommunities of practice? Why? How can they best determine whatknowledge will give them a global competitive advantage and whatknowledge will not? Why

Communitiesof practice (CoP) help organizations to attain an effective level ofknowledge management that gives them an edge in the market (Jerome,etal.2009).It is important that knowledge based strategies are not focusedprimarily on gathering and spreading information, but should alsocreate a platform through which practitioners can reach out to eachother. In this light, managers need to develop systems thatfacilitate sharing of ideas and exchange of solutions. There shouldbe a collaborative involvement among employees, encourage willingnessto exchange and share knowledge (Ardichvili,2009).Knowledge should be incorporated through relational arrangements thatspan organizational boundaries. These systems are expected to providean effective mechanism for integrating and accessing new knowledge(Gourlay,2010).CoP is an ideal instrument for leveraging tacit knowledge becausethey facilitate group interaction to advance the field of practice.Knowledge that boosts the capacity, ability and dexterity of thehuman capital is likely to give an organization an edge, while thatwhich is based on weak premise and assumptions about the market willbe of little value (Jerome,etal.2009).

Echoingprinciples of the human relations movement, Dalkir claims that muchof the organization`s valuable knowledge walks out the door at theend of the day. How can organizations best leverage the tacitknowledge inherent in its human capital to complement organizationalknowledge? Why is this method best?Organizations buildknowledge by coalescing existing and new knowledge in a new ways. Effective management of existing tacit knowledge and disseminatingknowledge among partners boosts organization capabilities that makeit possible for them to conduct unique goals such as ability todifferentiate their products and services (Hussainetal.2014).Organizations are recognizing how significance it is to “know whatthey know” and to be in a position to make the best use of it. Afirm should put in place strategies that exploit their internalstrengths in reaction to the opportunity in the surroundingenvironment (Sherman&amp Lacey, 2009).In the same way, external threats should be neutralized and internalweaknesses avoided. An organization’s sustained success, therefore,depends on its wise utilization of its immobile and heterogeneousresources. Even though the resource base may be substitutable,efforts should be made to ensure that resources that confercompetitive edge are inimitable, valuable, and rare (Ollins&amp Hitt, 2014).


Ardichvili,A., Maurer, M., Li, W. &amp Wentling,T. (2009).Cultural influences on knowledge sharing through online communitiesof practice. Journalof Knowledge Management, 10(1): 94-107.

Gourlay,S. (2010). ‘‘Knowledge management and HRD’’, HumanResource Development International, 4(1):27-46

Hussain,F., Lucas, C. And Asif Ali, M (2014).Managing Knowledge Effectively.Journalof Knowledge Management Practice, May 2014

Jerome,J.A. etal.(2009). Communities Of Practice: The Source Of Competitive AdvantageIn Organisations. Journalof Knowledge Management Practice, Vol. 10, No. 1

Ollins,J.D. and Hitt, M.S.(2014).C Leveraging Tacit Knowledge in Alliances:The Importance of Using Relational Capabilities to Build and LeverageRelational Capital. Journalof Engineering and Technology Management, 23: 147-167

Sherman,W.S. &ampLacey, M.Y. (2009). Utilize tacit knowledge for innovationand problem-solving through effective team leadership.Journal of Relevant Information and Analysis, vol.4 (2)