Capabilities, Processes, and Performance of Knowledge Management: A Structural Approach

- Capabilities, Processes, and Performance of Knowledge Management: A Structural Approach.
- The purpose of this study is to examine structural relationships among the capabilities, processes, and performance of knowledge management, and suggest strategic directions for the successful implementation of knowledge management.
- Analyzing hypothesized structural relationships with the data collected, they found that there exists statistically significant relationships among knowledge management capabilities, processes, and performance.
- To achieve competitive sustainability, many companies are launch- ing extensive knowledge management efforts (Gold, Malhotra, &.
- Most studies of them have examined the relationships of knowledge management capabilities, processes, and performance.
- However, there are very few empirical studies proposing an integrative model framework, for example, the balanced scorecard (BSC) approach to knowledge management performance measurement.
- A key to understanding the success and failure of knowledge management within orga- nizations is the identification and assessment of various factors that are necessary for the knowledge management performance measurement with a balanced view like the BSC (Arora, 2002.
- In this study, we examine structural relationships among various factors of the knowl- edge management value chain, and suggest strategic directions of what to prepare for successfully implementing knowledge management.
- To serve this purpose, we figure out the core constructs of the knowledge management value chain through an extensive lit- erature review about capabilities, processes, and performance of knowledge manage- ment, and propose the integrated knowledge management framework.
- Many researchers have emphasized three major factors for knowledge management: capa- bilities, processes, and organizational performance (Beckman, 1999.
- Knowledge management capabilities are organizational mech- anisms for generating knowledge continuously (Ichijo, Krogh, &.
- Knowledge management processes can be thought of as a structured coordination for managing knowledge effec- tively (Gold et al., 2001)..
- Many researchers have proposed capabilities influencing knowledge management as preconditions or organizational resources for effective knowl- edge management (Gold et al., 2001.
- (2001) define knowledge management infrastructure as “orga- nizational mechanism to create knowledge constantly and intentionally in organization,”.
- and presented five factors of knowledge management infrastructure such as (a) the will to generate knowledge, (b) conversation between employees, (c) organizational structure, (d) relationships between employees, and (e) human resources.
- Gray (2001) examined empirically that the mutual relationships between knowledge management practice ways proposed in organization to support creation, storage, and transfer of knowledge can raise organizational performance.
- Specifically, he presented five ways such as (a) formal training of employees, (b) construction of knowledge repos- itory, (c) informal knowledge fairs of employees, (d) spur of communities of practices (CoP), and (e) talk rooms of R&D employees about their current projects for knowledge management practice ways to raise organizational performance..
- (2001) examined an empirically effective knowledge management model from the perspective of organizational capabilities.
- They also argue that knowledge management enablers consist of organizational culture, structure, people, and information technology support..
- A number of studies have addressed knowledge management processes.
- They have identified many key aspects to this knowledge management process: capture, transfer, and use (DeLong, 1997).
- Ruggles (1998) divided company’s knowledge management processes by four categories including generating and accessing, facilitating and representing, embed- ding and usage, and transferring and measuring.
- Knowledge management processes that he presents are the (a) generating new knowledge, accessing valuable knowledge from outside sources (a generating and accessing process).
- Therefore, various attempts to measure organizational performance in knowledge management have been conducted accordingly (Arora, 2002.
- The BSC is a strategic learning system that can amend business theory and organizational strategy through monitoring a company’s performance from its knowledge management activities.
- Construction of a knowl- edge repository and activations of communities of practice (CoP) has been suggested to support overall knowledge management.
- Arora further notes that although knowledge management activities can achieve the objectives (or purposes) of knowledge manage- ment, knowledge management does not actually contribute greatly to the organizational performance.
- The BCA takes a serious view of a specific target set and provides feedback by organizational strategy to knowledge management.
- the BCA can practice knowledge management effectively in an organization by enabling the development and utilization.
- (1993) and Drew (1997) develop comprehensive and relative indicators measuring performance of knowledge management to supplement this shortcoming.
- of a knowledge management index.
- Gooijer (2000) also suggested the BCA to measure knowledge management performance.
- Specifically, he defines knowledge management as practice activities that support employees’ cooperation and integration, and proposes a knowledge management scorecard (KMSC) model to measure performance in knowl- edge management..
- In this study, we highlight a few major factors that can explain large parts of knowledge management based on the literature review so far..
- A variety of knowledge management capabilities have been addressed in the literature.
- The organizational structure may encourage or inhibit knowledge management.
- Moreover, its effect on knowledge management within organizations is a widely recognized potential (Lubit, 2001)..
- Information technology and its capabilities contribute to knowledge management.
- Therefore, IT is essential for initiating and carrying out knowledge management.
- The role of knowledge management processes is not consistent.
- To explore the role of knowledge management processes, this study adopts the eight knowledge processes proposed by Ruggles (1998): generating knowledge.
- Knowledge management is largely based on a management theory that has focused on a process-based view, especially when considering what it is that actually gets managed in organizations.
- Methods for measuring organizational performance in knowledge management can be categorized into four groups: financial measures, intel- lectual capital, tangible and intangible benefits, and balanced scorecard.
- As shown in Figure 1, the research model consists of knowledge management capabilities, knowledge management processes, and knowledge management perfor- mance.
- In addition, we considered customer performance and financial performance for knowledge management performance.
- In this study, we derived hypotheses from theoretical statements made in the literature review on knowledge management.
- Hypothesis 1: There is a positive relationship between the presence of the organiza- tional members with T-shaped skills and the knowledge management process..
- Therefore, the increased flexibility in an organizational structure can result in activated knowledge management activities.
- Hypothesis 3: There is a positive relationship between learning and the knowledge management process..
- Information technology support refers to the degree to which knowledge management is supported by the use of IT.
- Hypothesis 4: There is a positive relationship between IT support and the knowledge management process..
- Hypothesis 5: There is a positive relationship between the knowledge management process and customer performance..
- Hypothesis 6: There is a positive relationship between the knowledge management process and financial performance..
- Samples were restricted to the companies that adopted knowledge management or held similar process innovation campaigns.
- Questionnaires were sent to the task force team in charge of knowledge manage- ment (or process innovation campaigns) of 74 companies in Korea that had been intro- duced to knowledge management practices.
- The questionnaires consisted of 35 items about capabilities, processes, and performance of knowledge management.
- Items about knowledge management capabilities consisted of organization members’ T-shaped skills (five items), centralization of organizational structure (five items), learning organization (five items), and IT support (five items) as shown in Table 1..
- Knowledge management processes consisted of generating knowledge, accessing knowl- edge, facilitating knowledge, representing knowledge, embedding knowledge, using knowl- edge, transferring knowledge, and measuring knowledge assets (eight items) as shown in Table 2..
- Although financial performance is more realistic when using metric financial data such as return on investment (ROI), in the case of Korean companies, it is hard to connect the effect of the knowledge management initiative with metric financial performance.
- The knowledge management adoption period is short, and it is hard to standardize perfor- mance indicators in all business categories.
- Item Measures of Knowledge Management Processes.
- measuring the value of knowledge assets and/or impact of knowledge management..
- Item Measures of Knowledge Management Performance.
- As shown in Table 5, eight items of knowledge management processes were grouped together for one factor by exploratory factor analysis using oblique rotation, and items of other constructs were grouped together properly according to all operational definitions..
- In this study, we recognize content validity through our previous extensive knowledge management practice analyses and case studies about Korean companies..
- The first measurement models exam- ine the system of relationships among measures of knowledge management capabilities (T-shaped skills, centralization, learning, and IT support).
- As shown in Figure 2, param- eter estimates, fit indices, and observed residuals imply that the hypothesized dimensions of knowledge management capabilities provide a good fit for the observed covariance among the collection of item measures..
- In short, the fit statistics seem to suggest that each scale is capturing a significant amount of variation in these latent dimensions of knowledge management capabilities..
- Knowledge management processes.
- The second measurement models examine the system of relationships among measures of knowledge management process.
- The third measurement models examine the system of relationships among measures of knowledge management performance (customer and financial perspectives).
- Figure 2 Measurement models of knowledge management capability..
- For example, it is the degree to which the assessment of knowl- edge management processes accurately estimates a knowledge management perfor- mance.
- Figure 3 A measurement of the knowledge management process..
- Figure 4 Measurement models of knowledge management performance..
- In this study, we assumed that knowledge management capabilities may have effect on knowledge management processes, and then successful knowledge management pro- cesses may have an effect on knowledge management performance.
- Again, this implies that capabilities (decentralization of organizational structure, learning organization culture, and IT support) contribute to the successful knowledge management activities, and successful knowledge management activities contribute to performance in knowledge management..
- Knowledge management strategies can be described along two dimensions to reflect knowledge TABLE 7.
- Knowledge management strategists can sharpen weak knowledge management processes based on capabilities mentioned in our study..
- We believe this to be a very important distinc- tion because many organizations tend to launch programs of knowledge management with- out due consideration of the company’s capabilities and processes to guarantee any measure of success.
- A longitudinal study to investigate the dynamic features of knowledge management would provide further robust results.
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