Proceedings of ASBBS

Volume 17 Number 1

KNOWLEDGE MANAGEMENT PRACTICES: ROLE OF ORGANIZATIONAL CULTURE
SAEED, TAHIR, Ph.D (Management)
Director Medical Services, Pak Telecom Company, Islamabad, Pakistan. E-Mail: tahirdr@hotmail.com Phone No. 92-51-2294452

TAYYAB, BASIT, Ph.D (Management)
Associate Professor, Qauid-i-Azam University Islamabad, Pakistan. E-Mail: basittayyab@gmail.com

M. ANIS-UL-HAQUE, Ph.D
Associate Professor, Qauid-i-Azam University Islamabad, Pakistan. E-Mail: haqanis@yahoo.com

AHMAD, H. MUSHTAQ, Ph.D
Assistant Professor, Bahria University, Islamabad, Pakistan. E-Mail: h.mushtaqahmad@gmail.com

Chaudhry, Anwar U., M.D
Assistant Professor, Department of Mathematics and Natural Sciences, Fresno, California, USA. E-Mail: achaudhry@nu.edu

ABSTRACT
Today, the key global pressure on management practices is knowledge identification, creation, innovation, dissemination, and development of talent. Workforce diversity in globalized business reflects a multitude of cultural and ethnic backgrounds necessitate aligning corresponding differences in knowledge management practices. Keeping in view the theoretical and empirical importance, the present study investigates the predicting role of culture attributes (Collaboration, Formalization, Trust and Learning) with reference to knowledge management practices (Knowledge Creation). The study was carried out on purposively selected sample of 813 corporate sector employees at different managerial positions. They were administered questionnaires including Organizational culture scale (OCS) and Knowledge Management Practices Scale (KMPS). Multiple regression analysis results revealed that Collaboration, Formalization and Trust significantly predict Knowledge Management Practices. Furthermore, ANOVA showed significant difference with reference to levels of managerial positions and knowledge management process. Study limitation, future research and implications are discussed. Key Words: Knowledge Management Practices and Culture

ASBBS Annual Conference: Las Vegas

1027

February 2010

In order to develop new knowledge and use the knowledge which already exists within organizations. Knowledge management according to Bounfour (2003) is a set of procedures. Knowledge Management is a multi dimensional construct with a large number of interrelated attributes. action. in pursuit of organizational goals. its three components or attributes that are commonly found in the literature are: knowledge acquisition or adaptation.. 2001). Specifically. 2006). hence. public and private departments and the financial institutions are working on knowledge management. knowledge dissemination or sharing and responsiveness to knowledge or knowledge use. development sector organizations. distribution and efficient use of knowledge resources. storing. it seems essential to create an atmosphere of trust and security to encourage innovation. a sort of glue that bonds the social structure of an organization together. still the concept is localized to a few information system wizards within these organizations (Khilji. validation. local institutions. consequently. creating a competitive environment among organizations to consolidate and reconcile their knowledge assets (Gold. an excessive focus on technical issues rather than social aspects. However. Furthermore. leveraging information and knowledge within and across organizations. Knowledge management is a rather a new phenomenon and is in the initial stages of its exploration. the dramatic evolution in business and the dawn of new economy has changed the dynamics of market. The present study provides a test of the value of organizational knowledge management in a collectivistic culture of South Asian countries and will provide empirical evidence to the prevailing practices by identifying the specific cultural attributes that inhibit or support knowledge management processes. 2001). One of the important pre-condition for effective knowledge management is organizational culture. Organizational culture as a concept is also considered to be key element in managing organizational change and renewal. sharing. 2004). experimentation and risk taking (Lopez et al. infrastructures and technical and managerial tools. results in poor knowledge management practices or altogether failure to comply the practices in the organizations. Knowledge Management is a systematic and integrative process of coordinating organization wide activities of acquiring. there is lack of empirical evidence about what are the specific cultural variables that support knowledge management processes and help in development of knowledge culture (Oliver & Kandadi. presentation. Organizations do not operate in a social vacuum but are influenced by the socio-cultural context (Hofstede. and values that people in an organization is expected to share and follow. The knowledge management practices in the organizations depend on some prerequisites. Although. It is a process of knowledge creation. ASBBS Annual Conference: Las Vegas 1028 February 2010 . 2006). the organizational culture has also been considered as form of organizational capital (Camerer & Versalainen. sharing. 1998). Organizational culture consisting of behavior.Proceedings of ASBBS Volume 17 Number 1 INTRODUCTION Knowledge Management has emerged as one of the most important area in management practices and established as a basic resource for firms and economies. Knowledge management is regarded as collection. Consequently. There is a lack of empirical evidence about what are the specific cultural variables that support knowledge management processes and help in development of knowledge culture (Oliver & Kandadi. distribution and evaluation. 2001). Most of the studies concerning knowledge management are conducted in capitalistic American and European setups. diffusing and deploying knowledge by individuals and groups. some of the large multinational firms. As knowledge has been identified as one of the most important resources that contribute to competitive advantage of an organization. necessitates understanding the success and failure of knowledge management within organizations by identifying and assessing the preconditions that are necessary to flourish the endeavor. Malhotra & Segars. designed towards creating. creating. During the last two decades. many organizations have reached the conclusion that effective knowledge management is the only way to lever their core competencies and achieve competitive sustainability.

in the collective interest of stake holders”. Academic literature presents two perspectives of knowledge. Standards Australia (2003) defines knowledge managements as. It is not merely state of the art technology used to improve efficiency of the knowledge. ASBBS Annual Conference: Las Vegas 1029 February 2010 . Knowledge creation depends on individual performing activities through which tacit and explicit knowledge is shared and combined for refinement of activities and development of knowledge (Adenfelt & Lagerstrom. technology structure. the availability of information and the changing nature of organizational forms. Individual and collective knowledge. knowledge dissemination and responsiveness to knowledge as main components of knowledge management practice.. and Epistemological Dimension i. and Handerson. innovation. the proposed study explores the role of management hierarchical levels with reference to knowledge management practices. Lee and Knag. postulates that organizational knowledge creation can be viewed as an upward spiral process. creation. Today‟s economy is dubbed as knowledge based or knowledge economy. 2006). and application of knowledge to achieve organizational goals. the cognitive and the constructionist point of view. Gold et al. Rather it is an exercise about how people can be motivated. Lee. innovation and other forms of knowledge creation (Islam. best utilize their knowledge. the key global pressure on management practices is knowledge identification.. the one sure source of lasting competitive advantage is improved knowledge management (Nonaka.e. sometimes reaching out to the inter-organizational level. In an economy where the only certainty is uncertainty. Number of researchers. starting at the individual level moving up to the collective (group) level and then to the organizational level. Collaboration and Formalization (Organizational Culture Attributes) with regard to Knowledge Creation (Dimension of Knowledge Management Practices). Nonaka (2007) prefers to call knowledge management as Knowledge-Based Management. knowledge utilization and knowledge internalization. interpretation of the knowledge to serve organization goals. knowledge accumulation. where participants sell knowledge. The ground rules of economic competition have shifted in important ways in recent years because of the impetus of globalization. Nonaka. and development of talent. review and implementation of both social and technological processes to improve the application of knowledge. knowledge transfer. Learning. explicit and tacit knowledge. Researchers from different disciplines have given different categories of knowledge. Another categorization is the Ontological dimension i. 2006). Researchers like (e. Darroch (2003) has elicited knowledge creation and acquisition. 1994). whether tacit or explicit and is accelerated by encouraging synergistic interrelations of individuals from diverse back grounds” (Lee et al. proliferation of information technology. “The design. convert these into knowledge and combine it with their experience. LITERATURE REVIEW Today. culture and knowledge process architecture. Knowledge creation deals with a variety of knowledge. focused on research. (2001) empirically proved the effective knowledge management was the result of knowledge infrastructure i.Proceedings of ASBBS Volume 17 Number 1 The main focus of the present study has been to examine the predicting role or effects of Trust. 2005). knowledge sharing. Nonaka (1994) cites dynamic organizations as the ones that not only process information but also create information and knowledge. organizations absorb information. on knowledge management has focused on specific processes and activities within knowledge management. Sussman. These include knowledge creation and acquisition. (2005) introduced the Knowledge Circulation Process that can be determined by knowledge creation.e. Knowledge management is a human resource management exercise than a technology based discipline. 2001) have discussed four critical stages of management of a firm‟s knowledge.g. values and rules. experiences and enhance the creativity by using state of the art technology.. Thomas. Additionally. connecting people to people and people to information to create competitive advantage. Through interaction with environments.e. dissemination.

. 2006). 2002).e. experimentation and risk taking in order to develop new knowledge and use existing knowledge. 2004. learning and formalization.g. it may be even counterproductive (Jex. Organizational culture as a concept is considered to be a key element of managing organizational change and renewal (Pettigrew. contend that structured and standardized procedures are needed to capture. an emerging pre-requisite for effective knowledge management. Researchers argued that culture is a complex system of norms and values that is shaped over time and affects the types and variance of organizational processes and behaviors (Barney. Formalization is also manifested by uncertainty avoidance practices of establishment and enforcement of rules. Knowledge management processes are embedded in social settings which heavily influence these processes (Alavi. as more innovation and creativity have been found in more formalized setups (Lee & Choi. 2000). Beck and Tainio (2001). The cultural differences from country to country necessitate aligning corresponding differences in management practices. Formalization In work setup formalization refers to rules. as cultural factors (Predictors) of knowledge creation process.. collaboration. The study. honest and cooperative behavior. procedures and regulations (House et al. The current study. focus on trust. Four types of culture are found in organizations i. Kayworth & Leidner (2005) cite expertise. role culture.Proceedings of ASBBS Volume 17 Number 1 CULTURE Workforce diversity in globalized business reflects a multitude of cultural and ethnic backgrounds. 2004). centralized and non responsive to customer need (Khilji. According to Keiser. 2001). 2006). power culture. Graham and Pizzo (1996) argued that effective knowledge management requires a balance between open and flexible organization system along with formality and discipline to ensure tangible output. (1991) called culture the “Software of the mind”. the empirical evidences do not support the concept. the formal rules enable organizational learning and knowledge and increase the effectiveness of organizational communication. a general belief that formalization inhibits creativity and innovation and thus knowledge management. Trust Trust is the most important explicitly stated value essential for knowledge management. 1990). Rules and directives help sequencing problem solving and decision making. However. 2007). 2001). Hofstede. Although. Zaman. based on commonly shared norms. Ravindran & Freeze. Trust has been defined as an expectation that arises within a community of regular. 2001). In the competitive environment the organizations have to change its culture in order to survive otherwise. 1986). shared values that blur potentially sharp cultural differences. (2004) stress that an atmosphere of trust and security is essential to encourage innovation. ASBBS Annual Conference: Las Vegas 1030 February 2010 . which in turn facilitate knowledge accumulation (Gold et al. Resultantly. innovativeness. Deshpande and Webster (1989) define organizational culture as the set of shared values that help organizational members understand organizational functioning and thus guide their thinking and behavior. South Asian culture independence from British rulers was marked by passive management culture borrowed from the British colonial era (Khilji. Many scholars and practitioners (e. culture is a sort of glue that bonds the social structure of an organization together. Thus. procedure and written documentation such as policy manuals and job descriptions (Daft. Lopez et al. Kayworth & Leidner. The local culture of public sector organizations has been identified as a replica of the colonial era: bureaucratic.. 2003. 2003). support culture and achievement culture (McKenna. the success or failure of knowledge management within organizations depends on „culture‟. formalization. Alavi. Lopez et al. control and connect knowledge. on the part of other members of that community (Fukuyama. Kulkarni. collaboration and autonomy as the values of organizational culture that lead to effective knowledge management. believe that an organizational culture that is supportive and or adaptive can enable the successful implementation of knowledge management technologies as well as practices.

However. 1994). Organizational learning is synonymous to capacity to innovate and related to the ability to apply knowledge in organizations (Sinkula. shaping social interaction in the context of knowledge management. Bhatt (2000) relates individual learning capability and organizational learning culture to broadening of knowledge base. This version consisted of 29-items questionnaire that measure the five dimensions of Knowledge Management Processes. A learning process relating to use of conceptual knowledge enhances the employees‟ knowledge applicative capability (Tsai & Lee. Trust among people is associated with professional relationships rather than individual relationships (Wang. Software. variety. Lee and Choi (2003) defined learning as the degree of opportunity. Trust and Formalization. Ashleigh & Meyer. 2006). Collaboration Collaboration is the degree of active support and help in the organization. sharing and teaching. Collaboration is defined as human behavior sharing of meaning and completion of activities with respect to a mutuallyshared goal and taking place in a particular social or work setting (Sonnenwald & Pierce. acquisition. 2003). Learning is found to be a predictor of knowledge creation (Lee and Choi. whereas 44% and 27% from middle and lower levels respectively. 2003). Telecom. A culture of collaboration helps in knowledge creation by increasing knowledge exchange. Strong learning culture of firms is linked to creation. 2000). A learning culture opens up formal and informal channels of communication (Bhatt. The test for alpha reliability was . 2000). (2005). with 7 indicating “Strongly Agree” to 1 indicating “Strongly Disagree”.86 for the current instrument.. Learning and Collaboration would have a positive predicting impact on Knowledge Creation. Trust is considered an important predictor of knowledge creation (Lee & Choi. Petroleum and Food was contacted. 4 for Collaboration. 813 of these participants provided complete data and were included for the study with the response rate of 54. The Knowledge Management Process Scale was adapted to measure knowledge management process by Lee et al. 2006). Collaboration is also found positively linked with knowledge creation (Lee and Choi. (2004) empirically identify collaborative culture as a means to leverage knowledge through organizational learning. continuous innovation and competitiveness as key elements of learning. collaboration. 2003). Learning The cultivation of culture that supports and encourages knowledge acquisition and learning to occur may be more important than any of the technological advancements. The scale was rated on 7-point Likert-type scale. Delong and Fahey (2000) cited interactivity. Based on the preceding literature review following hypothesis is developed: H: Formalization. and transfer of knowledge (Murray and Donegan. Transport. 1500 managers from 50 organizations in 7 different sectors including Banking. The OCS in current study consists of 13-items. Thus. Post.2 %. orientation to existing knowledge as the cultural characteristics. ranging from (1) ASBBS Annual Conference: Las Vegas 1031 February 2010 . 3 each for Learning. Trust. the final sample included 17% participants from senior management level. Instrument Organizational culture scale (OCS) by Tayyab (2008) measured the four attributes of organizational culture. satisfaction and encouragement for development in organization.Proceedings of ASBBS Volume 17 Number 1 1996). METHOD Sample Based on purposive sampling design. 2003) and interpersonal trust is empirically found positively linked to knowledge acquisition (Politis. Lopez et al. (1995) cited social support from supervisors and coworkers. 2003). The items were rated on a 7 point Likert‟s type scale. however in the present study 5 items measuring the Knowledge Creation was used. dealing with mistakes. Tracy et al.

the value of R² explains 23. When trust is high.001 *. emails and post mail were also used to approach participants through their organizations. Collaboration. Although.20. multiple regression (enter method) was computed. RESULTS AND DISCUSSION Correlation matrix of all variables along with alpha coefficient values calculated in order to establish the validity and reliabilities of the instruments. The structured and standardized procedures are needed to capture. PROCEDURE Participants were approached individually during office hours in their respective organizations with the help of concerned administration.27* . p <.83 Collaboration . control and connect knowledge. Learning and Formalization) on knowledge creation process. tends to enable individuals within an organization to communicate and interact with one another. knowledge creation requires flexibility and less emphasis on work rules and lack of formal structure.40* V . ASBBS Annual Conference: Las Vegas 1032 February 2010 . sufficient time given to complete the questionnaires and collections were made when intimated.13. substantive and influential knowledge exchange. p <.73 p<0. Learning is the acquisition of new knowledge by the individuals who are able and willing to apply it in decision making or influencing other. the individuals are more prone to participate in knowledge exchange. 2003). Collaborative culture affects knowledge creation through increasing knowledge exchange (Nahapiet & Ghoshal. as the exchange in knowledge among different members is a prerequisite for knowledge creation. 1998). p <. In case of field locations.42* .33. According to Quintas et al. The findings are in line with Zucker et al. while.78. In Table 2.78 Formalization . Table 1 Correlation Matrix of Variables (N =813) Variables I II III IV V Trust I .23.001). resulting in knowledge creation (Nahapiet & Ghoshal. shown in Table 1. The internal consistency reliability estimates for the knowledge creation dimension of KMPS was 0.35* IV . 1998).41* III .32* .Proceedings of ASBBS Volume 17 Number 1 Strongly Disagree to (7) Strongly Agree.36* II .75 Knowledge Creation . learning has not shown significant impact. (Boldface Shows Alpha Coefficient Values of Variables) In order to verify the direct/predicting effect of organizational culture attributes (Trust.65 Learning .46* . collaboration (β = .5% of the variance in the scores for knowledge creation accounted for by the cultural dimensions (F= 63. The collaborative culture fosters this type of exchange by reducing fear and increasing openness among members (Lee & Choi. p <. the findings are in line with Lee and Choi (2003). (1996) that the significance of collaborative culture on knowledge creation in biotechnology industry and Lee and Choi (2003) who found a positive relationship between collaborative culture and knowledge creation in a Korean Stock Exchange.40* .001). But effective knowledge management requires a balance between open and flexible organization system along with formality and discipline to ensure tangible outputs (Ichigo et al.36* . Trust facilitates open. Again.. Participants were briefed about the purpose of study and confidentiality was assured to the participants. The regression results partially support the hypothesis. (1996) a deeply ingrained learning culture is a precondition for successful knowledge creation.001). 1998).001) and formalization (β = . as significant contribution to the knowledge creation is made by trust (β = .

33*.01 . 2006). Zaman.05 1.17 .04 .79) and 27. 2001).23 6.05 . 2003. the formal rules enable organizational learning and knowledge and enhancing the effectiveness of organizational communication (Keiser. 808) *p <.82* *p <. more involved in knowledge processing than the middle managers.04 .20 6. The possible explanation can be that middle managers perform the role of linking pins in organizations taking directives from the top management and forwarding to the operational managers.000 R² = . The findings of the research help knowledge management researchers as well as practitioners develop a better understanding of the role of organizational culture and successful implementation of knowledge management process. suggesting the importance and contributing to the existing body of universal knowledge in areas of organizational culture and knowledge management.13 3.000 I Trust . et al. ∆ R² = . while designing and developing strategies and policies and training manuals. provides evidence.000 Learning .86 (SD=3. Rules and directives help sequencing problem solving and decision making.001 Table 3 shows that the mean knowledge creation scores of the respondents from senior level is 28.62 .23 .65). whereas mean knowledge creation score for middle and lower level management is 27.001 The effect of management levels on knowledge management process reveal that the senior management levels are significantly different from middle and lower levels in the way they create knowledge. Management.65 27. Table 3 One-way Analysis of Variance (ANOVA) of Management Levels for Score on Knowledge Creation (N=813) Management Levels Variable Senior Middle Lower (n = 224) (n = 358) (n = 231) M SD M SD M SD F Knowledge Creation 28.12) respectively. IMPLICATIONS AND FUTURE RESEARCH The present study is one of the pioneer works on the subject in Pakistani organizational context.05 . Empirical literature also supports the results contending that a more innovation and creativity have been found in more formalized setups (Lee & Choi.125 Formalization . df (4.29 (SD = 4. Table 2 Multiple Regression Analyses for Trust. Collaboration.29 4.12 6. hence. Learning and Formalization on Knowledge Creation (N=813) B Model Variables SE β t p Constant 15. which in turn facilitate knowledge accumulation too.000 II Collaboration . ASBBS Annual Conference: Las Vegas 1033 February 2010 .06 .79 27. the current study may provide necessary guidelines to understand the issues of knowledge management and culture..89 . The senior and lower managers are more involved in planning and execution of decision and handling of information respectively.01 .36 .66 4.86 3.66 (SD = 4.235 F = 63.32 .54 .238.80 18.Proceedings of ASBBS Volume 17 Number 1 Furthermore.

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