management: an empiricalinvestigation of process andeffectiveness
Hsiu-Fen Lin
Department of Shipping and Transportation Management, National Taiwan Ocean University, Taiwan,Republic of China
Abstract.
Knowledge management (KM) is now widely recognized to be important to the success or failure of businessmanagement. Seeking to better understand the determinants of the evolution of KM, this study focuses on two
main problems: (1) whether firms change their KM processes over time to improve KM effectiveness as wellas develop their KM practices, and (2) whether socio-technical support results in more mature KM practices.This study draws on the previous literature to identify key dimensions of KM process (knowledge acquisi-tion, knowledge conversion, knowledge application and knowledge protection), KM effectiveness (individ-ual-level and organizational-level KM effectiveness) and socio-technical support (organizational support andinformation technology diffusion). The evolution of these dimensions is studied in the form of a stage modelof KM that includes initiation, development, and mature stages. Data gathered from 141 senior executives inlarge Taiwanese organizations were employed to test the propositions. The results show that different stagesof KM evolution can be distinguished across dimensions of KM process, KM effectiveness, and socio-technicalsupport. Implications for organizations are also discussed.
Keywords: Knowledge management; stage model; socio-technical support; empirical study
1. Introduction
Knowledge management (KM) is important because knowledge is one of the key strategicresources that can produce sustained long-term competitive advantage [1, 2]. KM describes thestrategies and processes of acquiring, converting, applying, and protecting knowledge to improvefirms’ competitiveness. Generally, KM practices are considered a process involving the manage-ment of all knowledge to meet existing and emerging needs, identify and exploit existing andacquired knowledge assets and develop new opportunities [3]. Although the importance of KM for
Correspondence to: Hsiu-Fen Lin, Department of Shipping and Transportation Management, National TaiwanOcean University, 2, Beining Road, Keelung, Taiwan, Republic of China E-mail: [email protected]
the success or failure of business management has been recognized, identifying the influences onthe evolution of KM is only now receiving the attention it deserves. For example, is it reasonableto presume that firms will change their KM processes over time to improve KM effectiveness aswell as develop their KM practices? As socio-technical support and KM are closely linked, doessocio-technical support facilitate more mature KM practices?
Given the above, this study examines: first, the evolution of KM processes as companies striveto achieve more effective KM; and second, socio-technical support that results in more mature KMpractices. Furthermore, the findings of this study provide a theoretical basis and empirical evi-dence of likely directions for delineating changes in important characteristics that can achievemore mature KM practices over time. In relation to practice, given the importance of KM to organ-izations both now and in the future, the findings of this study can be used to help business man-agers or policy-makers assess their current state of KM to identify the most context-sensitive KMstrategies.
2. Knowledge management process and effectiveness2.1. Knowledge management process
Knowledge indicates a firm’s intellectual capital: including work-related experience, expertise,know-how, and best practices, that can be acquired and shared. Knowledge may be explicit, and thiscan be expressed in codified form and thus can be diffused throughout an organization in the formof rules and guidelines. In contrast, knowledge that resides within individuals is frequently termedtacit knowledge. Being inferred from individual action, and being difficult to verbalize and codify,tacit knowledge is obtained through imitation and practice [4].
KM involves individuals and groups both within and between firms managing tacit and explicitknowledge to make better decisions, take actions and deliver results to support the underlying business strategy [5]. Numerous attempts have been made to define KM processes. Nonaka and
Takeuchi [6] described four knowledge conversion processes: socialization, externalization, combi-nation, and internalization. Each process involves converting certain forms of knowledge (tacit orexplicit) into other forms (tacit or explicit). This model focuses on the important issue of knowledgecreation through organizational sharing, and can help identify and evaluate certain key activities inKM practices. Bhatt [7] identified five steps in KM process activities: knowledge creation, knowl-edge validation, knowledge formatting, knowledge distribution, and knowledge application. Thismodel covers the full range of activities involved in organizational knowledge flow. From an orga-nizational capabilities perspective, Gold et al. [8] argued that the KM process consists of four dimen-sions, namely knowledge acquisition, knowledge conversion, knowledge application, andknowledge protection. This model is sufficiently broad to permit complete analysis of organiza-tional KM capabilities.
This study adopts the work by Gold et al. [8] for the following reasons. First, their work has become widely accepted in various management fields, such as learning organizations, multina-tional corporations, and information systems [9–11]. Second, their work emphasizes that firms mustdevelop an ‘absorptive capacity’, meaning the ability to use prior knowledge to recognize the valueof new information, assimilate it, apply it, and protect it to create new knowledge and capabilities[12]. Since higher levels of absorptive capacity enable a firm to learn, reflect, and relearn, they areusually considered essential for building, maintaining, and replenishing core competence [7, 13].
A brief description of each is provided below.The knowledge acquisition process refers to the business process involving the accumulation of
knowledge and the creation of new knowledge from existing knowledge [8]. Inkpen and Dinur [14]also argued that improved use of existing knowledge and more effective acquisition of new knowl-edge are crucial to knowledge acquisition. Two important processes of knowledge acquisition arefocused on: searching and organizational learning [1, 15]. Focused searching occurs when employeesactively search in a narrow segment of the organization’s internal or external environment, frequently
in response to actual or suspected problems or opportunities. Organizational learning influencesknowledge acquisition in two ways. First, it facilitates the rapid collection of know-how to solve spe-cific problems based on existing knowledge. Second, firms use organizational learning to create newpremises (such as paradigms, schemata, mental modes, or perspectives) to override existing knowl-edge. Once these two kinds of learning have been encouraged, the firm can obtain knowledge from both internal and external sources.
The knowledge conversion process represents the business process by rendering existing knowledgeuseful. Knowledge conversion involves organizing, structuring, storing, combining, and linking digi-tal storage such as documents and images with knowledge units. Firms need to organize and structureknowledge to make it easier for employees to access [6, 16]. Storing knowledge in properly indexedand inter-linked knowledge repositories can then increase knowledge exploitation by making knowl-edge easily accessible [8, 17]. Moreover, combining and integrating knowledge can reduce redundancy,improve representational consistency, and enhance efficiency by eliminating excess volume [18].
The knowledge application process is the process of making knowledge active and relevant forthe firm in creating value. For example, it is argued that knowledge application involves retrievingand using knowledge in support of decisions, actions, and problem solving and thus generates and
sustains competitiveness [19]. Using knowledge involves interaction between tacit and explicitknowledge, leading to adjusted strategic direction, problem solving, and improved efficiency [8].Davenport and Klahr [18] also noted that the effective application of knowledge has helped firmsimprove their innovation performance and reduce costs. In reality, knowledge must be shared anddistributed throughout an organization before it can be exploited at the organizational level [6, 20].The extent to which a firm succeeds in distributing knowledge depends on effective knowledgeapplication and the quantity of useful knowledge available in the firm.
The knowledge protection process refers to the ability to protect organizational knowledge fromillegal or inappropriate use or theft. Protecting a firm’s knowledge is necessary to preserve itscompetitive advantage [21]. From a legal perspective, firms can protect their knowledge through intel-lectual property rights such as copyrights, trademarks, and patents. Moreover, firms can developa sophisticated information technology (IT) system that restricts or tacks access to vital knowledge.
Besides legal and technology protection, firms should contract with employees regarding the protec-tion of confidential information, and should also establish employee rules of conduct and design jobsso as to incorporate security-oriented KM processes.
2.2. Knowledge management effectiveness
The knowledge-based theory of the firm considers knowledge to be the firm’s most strategically sig-nificant resource, because knowledge-based resources are generally difficult to imitate and sociallycomplex, and heterogeneous knowledge bases and the firm’s capabilities are the main determinantsof sustained competitive advantage and superior organizational performance [22]. Grant [23] alsoargued that knowledge begins with the individual, and firms need to integrate this knowledge usinga combination of mechanisms and technology, and then improve organizational performance.Moreover, effective KM is considered essential to success in contemporary organizations [24, 25].KM effectiveness is measured in terms of realizing successful outcomes of KM processes, includinggenerating, sharing and applying knowledge, increasing knowledge satisfaction and enhancing orga-nizational performance [26, 27]. The ultimate goal of KM is to transfer the experience and knowl-edge of all individuals to organizational assets and resources, to improve overall organizationalperformance. Individual-level KM effectiveness, which is facilitated with the support of KMprocesses, enables individuals to expand their knowledge and learning ability, and thus facilitateseffective KM at the organizational level. Sabherwal and Becerra-Fernandez [28] also stated thatindividual-level KM effectiveness contributes significantly to organizational-level KM effectiveness.
Based on the above discussion, this study considers KM effectiveness as a two-dimensionalconstruct, involving individual-level KM effectiveness and organization-level KM effectiveness.Individual knowledge use and acquisition depends on the perceptual filters through whichindividuals interpret events and actions [29]. Individual-level KM effectiveness focuses on the
perceptions of individuals involved in KM efforts. It measures whether employees receive andunderstand the knowledge required to perform their tasks. Organization-level KM effectiveness,in terms of improving organizational innovativeness and performance, represents the key contri- bution of KM, including improved organizational effectiveness, enhanced ability to innovate,more coordinated efforts, and rapid commercialization of new products or services.
3. Knowledge management stage models
A KM maturity model helps an organization to assess its relative progress in implementing KM.Various KM maturity models are proposed and validated with multiple KM research. These mod-els were developed from different perspectives. For example, Xu and Quaddus [30] regarded theadoption of KM systems as an innovation diffusion process and proposed a six-stage model. Thesix stages are initiation, adoption, pilot implementation, organic growth, organizational imple-mentation, and diffusion [30]. Lee and Kim [31] proposed that the organizational capability of KM grows through the following four stages: initiation, propagation, integration, and network-
ing. Arguing that KM is an important determinant of police performance in the value shop,Gottschalk [32] suggested a KM technology stage model which consists of four stages: end usertools, who knows what, what they know, and how they think. However, the above stageapproaches for KM involve the application of corporate knowledge resources and IT applica-tions, and little empirical research has focused on a holistic KM stage model to examine whetherKM can be adapted over time through the development of process characteristics and theimprovement of effectiveness.
Much of the literature on KM demonstrates that socio-technical support is a key issue for KMpractices [8, 33–37]. For example, social interactions are crucial in accelerating knowledge sharing,assembling divergent resources from dispersed locations within an organization, and enhancing theeffectiveness of storing individual and organizational knowledge. Furthermore, technologies can beused to nurture, capture, store and protect knowledge. Top management need to remove all obsta-
cles to the development of KM best practice, as well as weaving socio-technical support for KM pro-motion. Consequently, based on the above, we assume that, first, a firm’s changes in KM processescan lead to greater KM effectiveness over time, and second, socio-technical support can increase thematurity of KM practices.
Most theories have observed that KM, as an organizational development process, requires changesin individual and organizational behaviors [6, 18]. We believe that KM practices initially lack KMinfrastructure, and the lack of relevant experience creates limitations. The first stage or the initia-tion is characterized by both organizational readiness and planning that help organizations toimplement KM practices. With the evolution of KM, we expect companies to realize that KM infra-structure can increase the efficiency of KM processes. As growing numbers of organizations initiateKM efforts, KM activities become institutionalized as daily activities throughout the organizationand external knowledge sources are integrated to facilitate knowledge transfer and collaborationwith trading partners. Based on these perspectives, this study proposes that KM evolves throughthree stages: initiation, development, and mature stages. The evolution of KM thus follows a stagemodel in which firms adapt their KM practices to create readiness for KM efforts, build KM infra-structure, and facilitate both internal and external knowledge transfer.
4. Propositions
In this study, the fundamental proposition is that:
(1) KM adapts over time through the development of its process dimensions and more effectiveKM; and
(2) Socio-technical support results in more mature KM practices.
Synthesizing the explanations of the KM process term from the literature [6–8, 16, 18, 37], the KMprocess can be described as the business process of collecting and creating useful knowledge (i.e.knowledge acquisition), storing that knowledge in a repository to enable employees to access thatknowledge easily (i.e. knowledge conversion), exploiting and usefully applying knowledge (i.e.knowledge application), and preventing inappropriate knowledge use (i.e. knowledge protection).These KM processes highlight the continuous reconfiguration of the firm’s knowledge-based assets,and adapt to changing market conditions to achieve organizational renewal and innovativeness.Bhatt et al. [38] argued that the key goal of KM is to achieve a balance between knowledge exploita-tion and knowledge exploration. Exploitation of existing knowledge is useful given a stable environ-ment. Given environmental changes, the appropriateness of the firm’s knowledge base may bereduced, and hence the ability to utilize knowledge effectively becomes essential for firms. In suchconditions, firms require the ability to create new knowledge to effectively sustain their competitiveadvantage (i.e. knowledge exploration). The KM process should contain both knowledge exploitationand knowledge exploration to create sources of sustainable growth and pursue KM best practices.
Knowledge-based theory indicates that effectively acquiring and utilizing internal and externalknowledge influences a firm’s ability to implement KM, adapt to its changing environment and
remain competitive [12, 39]. Moreover, previous studies have also argued that the effectiveness of KM practices depends on the persistent development of KM processes, for example capturing, struc-turing, utilizing, and protecting existing knowledge [8, 23, 37]. KM thus can be considered as achange process in which movement through the different stages is influenced by process character-istics that include knowledge acquisition, conversion, application, and protection. We propose:
Proposition 1. KM practices will evolve when a firm increases its ability to acquire, convert, apply,and protect knowledge.
KM involves a dynamic capacity of the firm that evolves over time [8, 13]. We expect that changesin knowledge utilization capabilities will increase the level of KM effectiveness. This leads to:
Proposition 2. KM effectiveness increases with the evolution of KM practices.
Research concerning the factors affecting KM has identified a number of different variables, from‘social’ issues such as employee attitudes, top management support and social interaction culture[33–35] to ‘technical’ issues such as IT diffusion [40, 41]. There are many organizations that relateKM to the implementation of new IT-based systems, neglecting organizational aspects such ashuman and social issues [42]. Therefore, to implement KM processes so as to create a knowledgeenvironment, organizations need to provide and support several categories of KM capabilities bydeploying currently available socio-technical resources. Both social and technical variables are keydeterminants of the effectiveness of organizational execution of KM. We expect socio-technical sup-port to act as a catalyst for stimulating KM evolution. We propose:
Proposition 3. More mature KM practices are characterized by higher levels of organizational sup-port and IT diffusion.
Figure 1 illustrates the basic premise of the study (stages of KM), namely conceptualizing on a con-tinuum the stages followed by the growth of KM practices. The KM stage model consists of threestages. In the first or initiation stage, the firm begins to recognize the importance of KM and preparefor KM efforts. During the development stage, the firm begins to invest in building KM infrastruc-ture to facilitate and motivate knowledge activities. At the mature stage, organizational knowledgeis networked not only within an organization but also with external partners.
5. Methodology
5.1. Data and sample
The survey questionnaire was designed on the basis of a comprehensive literature review and wasrefined through rigorous pre-testing. The pre-testing focused on instrument clarity, question wording
and validity. During the pre-testing, three MIS professors were invited to comment on the questions andwordings. Three KM administrators then examined the revised questionnaire. These KM administratorswere given the questionnaire and asked to examine it for meaningfulness, relevance, and clarity.
The study population consisted of senior executives in Taiwanese companies. The questionnairewas targeted at senior executives who have wide experience and are best positioned to assess theirorganizational KM activities and effectiveness [8, 34]. The survey questionnaire was sent to 600 sen-ior executives of organizations randomly selected from the Top 2000 Firms list published by China
Credit Information Service, Ltd in 2005, which listed the 2000 largest firms in Taiwan. The finalquestionnaires were mailed to the 600 senior executives in the summer of 2006. A covering letterexplaining the study objectives and a stamped return envelope were enclosed. Additionally, a def-inition and description of KM processes was included in the initial portion of the questionnaire toensure that all respondents shared a similar conception of the nature of KM activities, and to mini-mize confusion. Follow-up letters also were sent about three weeks after the first mailings.
A total of 141 usable questionnaires were returned, for a response rate of 23.5%. The majority of respondents were from manufacturers, representing 49.7% of the sample. The next highest werefrom banking, finance and insurance entities, representing 19.2% of the sample. The remaining cat-egories exhibit a modest range of representation from a minimum of 1.1% (foods) to a maximum of 8.3% (wholesale). The sample was almost evenly split between 0–1000 employees (57.2%) andgreater than 1000 employees (42.8%). The respondents themselves had senior representation, with
77% assuming the position of chief knowledge officer, chief information officer, chief operating offi-cer, vice president, or chief executive officer.
5.2. Variables measurement
The complete set of measures for four KM process variables, two KM effectiveness dimensions, twosocio-technical support variables, and the KM stage construct is described in the Appendix. Five-point Likert-type scales were used except in the item for the KM stage. Respondents gave the extentto which they agreed or disagreed with each statement in the constructs. Moreover, followingAnderson and Gerbing’s [43] suggestion that it is necessary to examine the reliability and validityof these variables, this study employed the statistical technique of confirmatory factor analysisusing LISREL 8.3 software [44].
5.2.1. Knowledge management processes The KM process was measured using the following fourconstructs: knowledge acquisition, knowledge conversion, knowledge application, and knowledge pro-tection, derived from those proposed by Gold et al. [8]. Table 1 presents the results of testing the psy-chometric properties for measuring KM processes. It can be observed that all the indicators of goodnessof fit show their adaptation to the corresponding recommended critical values. Moreover, to ensure thereliability of the scale, this study calculated composite reliability coefficients in compliance withBagozzi and Yi [45]. As presented in Table 1, the composite reliability coefficients are over the recom-mended minimum value of 0.6 in all constructs. Table 1 also indicates that all the coefficients betweenthe items and factors are higher than 0.5 and significant ( p < 0.01) which, according to Anderson andGerbing [43], is a guarantee of convergent validity. Finally, according to the procedure suggested in Hairet al. [46], the discriminatory validity between each pair of constructs is guaranteed, as no pair of meas-ures had correlations exceeding the criterion (0.9 and above), implying that no multicollinearity existsamong the various constructs.
5.2.2. Knowledge management effectiveness KM effectiveness was measured using the twodimensions operationalized by Lee and Choi [47] and Wu and Tsai [48]. Individual-level KM effec-
tiveness refers to whether employees receive and understand the knowledge needed to perform theirjobs. Organization-level KM effectiveness is assessed based on the key contribution of KM, includingimproved organizational effectiveness, enhanced ability to innovate, improved coordination of efforts, and rapid commercialization of new products or services. The results of the evaluation
process are shown in Table 2. As may be observed, all the indicators of goodness of fit are within themost conservative limits recommended for each of them. Furthermore, the composite reliability of allconstructs exceeded the benchmark of 0.6 and all the coefficients between the items and factors arepositive and significant ( p < 0.01), which is a guarantee of scale reliability and convergent validity.Likewise, the correlations of any pair of measures did not exceed the criterion (0.9 and above), whichis a guarantee of discriminatory validity.
5.2.3. Socio-technical support The two variables of the socio-technical perspectives, organiza-tional support and IT diffusion, were measured using guidelines from the literature. Organizationalsupport is measured based on support for KM by top management attitudes, stimulus for develop-ing new ideas, and reward systems in inducing KM practices [49, 50]. IT diffusion refers to thedegree of technological usability and capability regarding KM. It is measured by whether IT usagecan influence employees to collaborate with other persons inside and outside the organization [8,47]. The results of the process of evaluation of the developed scales are shown in Table 3. Accordingto these results, there is a reasonable fit between the model and the data. It can be observed that the
indicators of goodness of fit are within the most conservative limits recommended for each of them.Moreover, scale reliability is high since the composite reliability coefficient exceeds 0.6.Furthermore, on examining the coefficients between items and factors, the existence of convergentvalidity is verified, as all of them exceed 0.5 and are significant ( p < 0.01). Finally, the correlationsof any pair of measures did not exceed the criterion (0.9 and above), indicating the measure has ade-quate discriminatory validity.
5.2.4. Knowledge management stages The KM stage construct was measured with descriptionsof the three KM stages. Respondents selected the KM stage that best fitted their firm. This measure-ment method resembles that of Lin and Lee [11] and Teo and Pian [51]. The three stages of KM arefurther discussed below.
6. Results and discussion
6.1. Data analysis and results
A significant number of respondents classified their KM practices as being in one of the three stages:26% (n = 37) in the initiation stage, 52% (n = 73) in the development stage and 22% (n = 31) in themature stage. This indicated that the majority of the firms are still refining their KM practices andonly 22% of firms consider themselves mature.
Tables 4 and 5 provide the means and standard deviations for each of four KM process variablesand two KM effectiveness dimensions across the three stages. These results illustrate a clear patternfor both sets of variables consistent with the propositions. As KM evolves a firm increases its KMprocess capability such as acquiring knowledge, converting it into useful forms, applying or usingit, and protecting it. Table 6 lists the statistical significance of these results over the three KM stages.The unambiguous monotonically increasing trend provides what we believe to be significant sup-port for Proposition 1.
Table 5 illustrates KM effectiveness. The results show that firms with more mature KM practices
tend to contribute greater business value under certain specific circumstances, such as perceivedeffectiveness of KM at the individual level and at organizational level. Table 7 provides strong sta-tistical support for the significance of these differences, thereby supporting Proposition 2.
Tables 8 and 9 use Tukey’s studentized range to test for the differences in individual stages. Withrespect to the KM process (Table 8), significant differences (at p < 0.05) were obtained for all but oneof the variables in adjacent stages. The exception was that knowledge protection did not differ signif-icantly between the initiation and development stages. While knowledge protection is more gradual
when KM evolves during the latter stages, this might be explained by the fact that protecting knowledgeis inherently difficult, and firms have little planning experience regarding the development of protocolsand policy guidelines which recognize and promote rights of knowledge during KM initiation andadoption.
Table 9 illustrates the results related to KM effectiveness dimensions. The results clearly indicatethat, even across temporally adjacent stages, individual-level and organization-level effectivenessstatistically improves. That is, a clear pattern of improvement in KM effectiveness exists. Moreover,Table 10 illustrates the differences in socio-technical support variables across the three KM stages.
Both organizational support and IT diffusion are significantly different across the three stages. Thisresult supports Proposition 3. It also supports the assumption that socio-technical support (e.g.strategy and leadership, corporate culture, IT diffusion, etc.) are the key influence on the evolutionof KM. This provides further support for the hypothesis that KM stages represent a change process,since both organizational support and IT diffusion facilitate KM process adaptation to facilitate con-tinued learning and change.
6.2. Discussion of findingsThe results provide quite strong support for all three propositions. Given the care taken in measur-ing and validating variables, this procedure implies that the propositions have a reasonable theo-retical basis. This study focuses on obtaining four findings. First, it identified three stages of KM based on filed studies and literature review, and it sampled significant numbers of respondents ineach stage. Second, given the cross-sectional nature of the sample, this study found that firms ineach of the stages followed a predictable pattern in terms of KM process dimensions. Third, firmswith greater experience of KM practices and having reached a more mature stage had better indi-vidual-level and organization-level KM effectiveness. Finally, firms at more mature stages of KMexperienced both greater organizational support and higher IT diffusion. Consequently, this studyshows the existence of qualitative differences in KM process, KM effectiveness, and socio-technicalsupport among each of the three stages.
Three stages of KM evolution involve a process of change, during which firms evolve and increasetheir adaptive capacity. The changes during these three stages were based on organizational KMcapability. The possible manifestations of the three stages of KM are described below.
6.2.1. Stage 1: initiation stage Firms are beginning to recognize the importance of organizationalKM and prepare for KM efforts. During this stage, firms must carefully define why KM is to beimplemented and what criteria will be addressed in evaluating knowledge usefulness. It is neces-sary to increase employee understanding of the successes and failures of knowledge activities inorganizational settings. Additionally, firms should clearly specify shared KM visions and goals anddisseminate them throughout the organization through diverse KM-based resources such as man-power, and managerial and IT efforts. For example, by emphasizing organizational social resourcessuch as education and training, reward systems, and recruiting policies, as well as IT capabilitiessuch as online databases, data warehousing, groupware, intranet, and virtual communities, firms arelikely to have high absorptive capacity to utilize internal and external knowledge. During this stage,the ability of KM process activities is limited since a complete KM infrastructure is not yet definedand implemented. Hence, the KM process is limited to reflecting improvement in individual-leveland organization-level KM effectiveness. Most firms in this stage recognize that the ability to acquireand utilize knowledge effectively is critical for their innovation activities and performance, stimu-lating the need for the promotion of KM practices. Building a special team for initiating KM andacquiring the necessary human resources, IT infrastructure and budget are prerequisites for KMactivities.
6.2.2. Stage 2: development stage During the development stage, firms begin to invest in build-ing KM infrastructure to facilitate and motivate knowledge activities such as acquiring or creating,storing, sharing, utilizing, and protecting knowledge. Most firms at this stage intend to build KMinfrastructure and facilitate KM process activities. KM infrastructure includes knowledge strategy,organizational culture, organizational structure, and human resource policies. Furthermore, a holis-tic KM process is defined and applied enterprise-wide during this stage, consisting of related rulesand policies and a permanent team for acquiring, converting, applying, and protecting knowledge.During this stage, IT diffusion is greater and top management become more actively interested andinvolved in KM practices. For example, the ability of IT to increase the knowledge base available toindividual employees and allow employees to work together enables organizations to increaseemployee productivity and is compatible with organizational policies for facilitating KM processactivities. Moreover, as more firms have undertaken KM programs, the position of chief knowledgeofficer (CKO) has emerged to coordinate the KM infrastructure components and KM process activi-ties [1]. The CKO is also responsible for ensuring the existence of an appropriate KM process foreffective KM. Firms that assist employees in creating and using knowledge and that establish appro-priate knowledge networks can encourage employees to assimilate new knowledge more effectively,as well as profiting from organizational performance.
6.2.3. Stage 3: mature stage The mature stage occurs when organizational knowledge is net-worked not only within an organization but also with external partners such as suppliers and cus-tomers. This stage represents the steady state in which KM can effectively adapt to change andenhance organizational performance. The application of knowledge for work-related problems becomes a regular day-to-day activity during this stage. Firms with proficiency in acquiring, con-verting, utilizing, and protecting knowledge are more skilled in developing profitable KM effective-ness. KM practices are emerging sets of organizational design and operational principles, processes,organizational structures, applications and technologies that help knowledge workers to leveragetheir creativity and ability to deliver value. Moreover, a firm’s long-term competitiveness increas-ingly depends not only on its internal KM capabilities, but also on external cooperation relation-ships with other firms. During this stage firms start to focus their organizational efforts onspecialized core knowledge and to outsource other needed knowledge from outside. However,
knowledge creation and transfer among different organizations is challenging [23]. Chen [52] notedthat absorptive capacity is an essential feature for firms in transferring knowledge from externalpartners. Therefore, top management needs to recognize that the development of absorptive capac-ity within firms is a necessary condition for successful exploitation of outside knowledge.
7. Conclusions
This study makes theoretical and empirical contributions as follows: first, it contributes to thetheoretical development of a stage model for KM. The literature contains little investigation of KM,which forms an evolutionary pattern as firms’ experience of adaptation grows through the dimen-sions of KM process, KM effectiveness, and socio-technical support. This study used an extensiveliterature review to build propositions between these dimensions and the evolution of KM. The sec-ond contribution is the derivation of empirical support for proposition prediction using data fromactual respondents. The empirical evidence from this study proves that different stages of KM evo-
lution can clearly be distinguished across dimensions of KM process, KM effectiveness, and socio-technical support. The findings fill the gap in the literature represented by the lack of developmentof a stage model of KM that can be used to help firms assess their current state of KM practice.Furthermore, the implications for practitioners and researchers and the limitations of this study arediscussed below.
7.1. Implications for practitioners
The major implications are the following. First, the findings of this study can help firms assesstheir current KM practices to gain insights into the required direction of change. The evolution of KM leads firms to more effective KM through the processes of acquiring, converting, applying,and protecting knowledge. That is, top management seeking to establish effective KM programsmust support four processes: knowledge acquisition, knowledge conversion, knowledge applica-tion, and knowledge protection. For example, knowledge acquisition, involving the collection of information and the creation of knowledge, is important because it can solve existing problemsmore proficiently and effectively and promote innovation, from individual to organizational lev-els. Knowledge conversion is the process of organizing, structuring, storing, and combining orga-nizational knowledge for later use. This helps establish an organizational memory to providequick and easy solutions. Knowledge application involves the utilization of the knowledge forwork-related problems. The application of knowledge improves employee job satisfaction andcreates business value. Knowledge protection is important to protect the creativity and interestsof knowledge owners. If firms do not prevent inappropriate use of knowledge, they have difficultyin sustaining their competitive advantage. Therefore, forward-thinking firms can assess theirstage of KM evolution and work to adjust their KM strategies to increase the effectiveness of their
KM. Such an approach can catalyze the maturation of KM. Second, firms that exhibit expertisealong with socio-technical support tend to be conducive to adopting knowledge-based capabili-ties that are critical for organizational success. The deployment of successful KM requires severalsocial and technical factors. Social factors such as changing employee attitudes, top managementsupport and reward systems, and technical factors such as IT infrastructure and information secu-rity are essential for KM. For example, the firm should cultivate a social interaction culture thatencourages employees to create and share knowledge with colleagues and acts as the engine of the evolution of KM. Moreover, the path taken from ‘initiation’ to ‘maturity’ can potentially beinfluenced by IT diffusion. IT helps a firm generate, store, and exchange knowledge with employ-ees, suppliers, or customers, thereby assisting the KM process. Consequently, firms should striveto balance the efficiency of the KM process with socio-technical support’s potential for knowledgecreation.
There are several limitations to this study, requiring further examination and additional research.First, this study focused on empirical research to examine whether KM can be adapted over time by
developing process characteristics and improving effectiveness. Future studies could seek an enhancedunderstanding of the difference between different stages of KM evolution through structured interviewsand case studies of senior executives dealing with ongoing or adopted KM practices. Second, the major-ity of respondents in this study were manufacturers (49.7%), which may generate inaccuracy in meas-urements. Interpretation of the results must consider this limitation. Future studies can examine theproposed propositions by including industry effects in the KM stage model. An intriguing futureresearch direction would be to investigate how KM evolution differs across different industries. Third,the sample was drawn from Taiwanese senior executives. Hence, the research model should be testedfurther using samples from other countries, since cultural differences among organizations influenceemployee perceptions regarding KM, and further testing thus would provide a more robust test of thepropositions. Fourth, this study uses a single respondent from each target firm, without collecting andcross-validating responses from other information in the same firm. The use of single respondents is
questionable, because relying on only one informant to make complex social judgments about KM activ-ities increases random measurement error. However, the cost of using multiple informants and the pos-sibility of lower response rates were deterrents against the use of multiple respondents. The survey wastargeted at senior executives in an attempt to minimize the common method variance. Senior execu-tives are more objective and knowledgeable about organizational operations and strategies, and thuswere in a position to answer questions pertaining to KM practices. Future research can mitigate theproblem of common method bias by collecting data from more than one respondent per firm and com-paring the perceptions of different groups regarding KM practices. Finally, although the scales used formeasuring the KM process (e.g. knowledge acquisition, knowledge conversion, knowledge application,and knowledge protection) are similar to the existing scales, further research might consider develop-ing more elaborate measures to enable a richer convergence of dimensions of the KM process.
Acknowledgment
The authors would like to thank the National Science Council (NSC) of the Republic of China,Taiwan, for financially supporting this research.
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Appendix: measurement items
Knowledge acquisitionMy organization…KA1: Has processes for generating new knowledge from existing knowledge.KA2: Has processes for distributing knowledge throughout the organization.KA3: Has processes exchanging knowledge with our trading partners.KA4: Has processes for exchanging knowledge between employees.KA5: Has processes for acquiring knowledge about new products/services within our industry.KA6: Has processes for acquiring knowledge about competitors within our industry.
Knowledge conversionMy organization…KC1: Has processes for filtering knowledge.KC2: Has processes for transferring organizational knowledge to employees.KC3: Has processes for absorbing knowledge from employees into the organization.KC4: Has processes for integrating different sources and types of knowledge.KC5: Has processes for organizing knowledge.KC6: Has processes for replacing outdated knowledge.KC7: Has processes for converting knowledge into the design of new products/services.
Knowledge applicationMy organization…KAP1: Has processes to apply knowledge learned from mistakes.
KAP2: Has processes for applying knowledge learned from experience.KAP3: Has processes for using knowledge to solve new problems.KAP4: Makes knowledge accessible to those who need it.KAP5: Takes advantage of new knowledge.KAP6: Has processes for using knowledge in development of new products/services.
Knowledge protectionMy organization…KP1: Has processes to protect knowledge from inappropriate use inside the organization.KP2: Has processes to protect knowledge from inappropriate use outside the organization.KP3: Has processes to protect knowledge from theft from within the organization.KP4: Has processes to protect knowledge from theft from outside the organization.KP5: Has incentives that encourage the protection of knowledge.KP6: Has technology that restricts access to some sources of knowledge.KP7: Has extensive policies and procedures for protecting trade secrets.
Individual-level effectiveness
IE1: I am satisfied with the available knowledge for various tasks across the organization.IE2: I am satisfied with the management of knowledge in the organization.IE3: I am satisfied with the available knowledge for the tasks.IE4: I am satisfied with knowledge sharing among colleagues.
Organization-level effectivenessThe available knowledge…OE1: Improves overall organizational effectiveness.OE2: Improves employee effectiveness in performing the task.OE3: Identifies new business opportunities.OE4: Coordinates the development efforts of different units.OE5: Anticipates potential market opportunities for new products/services.
Organizational supportIn my organization…OS1: Top management clearly supports the role of knowledge management.OS2: Employees are encouraged to find new methods for performing a task.OS3: Employees are encouraged to interact with their colleagues.OS4: Employees are encouraged to suggest ideas for new opportunities.OS5: Reward systems are provided to induce knowledge management.
IT diffusionIT1: Employees make extensive use of electronic storage (such as online databases and data ware-housing) to access knowledge.IT2: Employees use knowledge networks (such as groupware, intranet, virtual communities, etc.) tocommunicate with colleagues.My organization uses technology that allows…IT3: Employees to collaborate with other persons inside the organization.IT4: Employees to collaborate with other persons outside the organization.
Knowledge management stageWhat is the stage that most closely fit your organization for knowledge management practices?
• Initiation stage. My organization is beginning to recognize the importance of KM and prepare forKM efforts.
• Development stage. My organization is beginning to invest in building KM infrastructure to facil-itate and motivate knowledge activities.
• Mature stage. In my organization, organizational knowledge is networked not only within theorganization but also with external partners.
