Corporate Universities

Executive Summary

Corporate universities are a popular trend in the development of the knowledge economy's today. Recognized the importance of knowledge and the gaps in the traditional education, corporates are creating and strengthening a type of training that is consistent with their needs, strategies and objectives. The purpose of this study is to understand the definition and meaning of a company university; reasons for the establishment of corporate universities. Furthermore, this paper shows the potential benefits of the firm's investment in the higher education institutions as a solution to the problem of the shortage human resource. Finally, this article will give a few examples of corporate universities in the education and management of knowledge for the internal and external environments of the business.

Table of Contents

1.        Introduction        1

2.        Literature Review        1

a.        Knowledge Management        1

b.        The corporate universities (CUs) concept        2

3.        Reasons for setting up the CU        3

4.        Potential Benefits of CU        5

5.        Corporate University Models        5

a.        Hamburger University        6

b.        Oracle University        6

6.        Conclusion and recommendation        7

7.        References        8

1. Introduction

Nowadays, a knowledge economy plays the critical role in the growth of the global economy. The learning and application of knowledge are very important for the survival and development of the organization. Therefore, many organizations have changed their strategy to manage knowledge in a more systematic and effective. A clear example for that is the increase of the corporate universities when they must face with this need (Jansink, Kwakman, and Streumer 2005). As the needs of knowledge management and the development of business operation increase, the establishment of corporate university is prioritized in the organizations. The definition of the corporate university was derived from the 1960s when US corporations used it as their internal training facilities (Assen and Mba 2017). For instance, Hamburger University was founded by McDonald's corporate in 1961 and Oracle University was founded by Oracle's corporate in 1999. Although the definition of the corporate university is different, it has the same goal as building human competency resources through continuous training (Andresen and Lichtenberger 2017). The emerged out of corporate universities is dissatisfaction of these companies with the result output of the education system. Moreover, organizations and their employees are facing with the strong development of the information technology and communication (Rhéaume and Gardoni 2017). Thus, corporate universities are a solution which helps companies to create and develop knowledge; distribute the knowledge to employees (Jansink, Kwakman, and Streumer 2005).

The purpose of this research is to identify the reasons for the setup of universities of multinational corporates, especially McDonald's Hamburger University and Oracle University of Oracle company; and explain potential benefits of that. Finally, this study will make recommendations on whether corporate universities are a worthwhile investment for multinational corporations.

1. Literature Review

1. Knowledge Management

Knowledge Management is one of the most important topics in the world, especially in the knowledge economy when knowledge is playing an important role as a competitive advantage (Berraies, Chaher, and Yahia 2014). Today, the development of the industries and information technology lead to appear a huge amount of the data and information. In the beginning, the essence of knowledge is in the natural state, then it to be used but very limited because organizations do not know what it can do. Therefore, through continuous improvement process, some knowledge is applied in the business environment and commercial activities (Sanchez 2005).

According to APQC, knowledge management is identified as a collection of strategies and information to achieving organization goals via using knowledge. Knowledge Management concentrates the identity, create, sharing knowledge, and the cultural foundations (Wilkinson and Reinhardt 2005).

The purpose of KM is the improvement of the organization's functions, using the knowledge to improve better the theories and practices of organizations (Yousefi, Taherkhani, and Ghardashkhani 2014). KM is an aggregate of activities the organization consists of focusing on goals what managers can do to be achieved, the ways which the managers motivate individuals in the achievement of the organization's goal (Wajidi and Asim 2009). Moreover, the creating social processes that will be facilitated KM success (Jansink, Kwakman, and Streumer 2005).

1. The corporate universities (CUs) concept

Organizations realize that they have a responsibility in the training strategy towards their employees (Sherman and Shapovalova 2016). They think that having a workforce with superior skills are a competitive advantage in the globalizing environment. This also is the sustainable competitive advantage among firms. According to Global CCU (2010), the number of CUs in the world was increasing doubled in the past few decade, approximately 4,000 CUs (J. C. Meister 2006). The reason for the growth of CUs can be explained by the need to knowledge management and improve the competitive competencies of firms (J. C. Meister 1998). Moreover, to seek the high qualified workforce in the short-term is difficult to recruit. Therefore, many companies focus on training and development the internal or external employees or both by setup the corporate university.

The concept of the term "corporate university" appeared in the 1990s. It was defined by Meister (1998) as an educational centre established by a company. It functions concentrate to education and development skill for the employees. It is not only disseminating an organization's culture and value, but also develop core skills of need in the workplace such as leadership, critical thinking, and solving the problem. However, recently, the definition of the corporate university is updated by Allen (2007) as “a corporate university is an educational entity that is a strategic tool designed to assist its parent organization in achieving its mission by conducting activities that cultivate both individual and organizational learning, knowledge and wisdom”. Since the globalization, the need for the knowledge productivity is increased rapidly; the corporate university is expected that would become a centre for shaping strategy and other activity paradigms than education model (Hearn 2014). Many companies believe that they will achieve strategic goals and performance improvement if they focus on employee education (J. C. Meister 1998).