You are on page 1of 9

Integrative framework

on knowledge management and
new product development
Sung-Wook Kang and Soo-Wook Kim
College of Business Administration, Seoul National University,
Seoul, South Korea
Abstract
Purpose – The paper aims to summarize important findings on knowledge management (KM) and
new product development (NPD). Also, it seeks to propose an integrative framework on KM and NPD.
Design/methodology/approach – The authors review the literature on KM and NPD, and derive
common themes behind these research streams. Based on such themes, they build a conceptual
framework integrating the two areas.
Findings – Based on the literature review, this paper argues that seemingly distinctive research
streams, KM and NPD, are eventually another form of innovation to cope with external volatility.
Research limitations/implications – The paper hints that various managerial theories and
approaches may, in fact, address similar issues and that it is possible to develop a comprehensive
framework without losing distinctive features.
Originality/value – The paper attempts to derive common themes from two separate research
streams and to propose a comprehensive and simplified view. A proposed framework can be an
introductory guideline for those considering a more thorough investigation on management theories.
Keywords Knowledge management, Product development, Integration, Innovation
Paper type Literature review
1. Introduction
Knowledge management (KM) has drawn an increasing attention as a new source of
competitive advantage. Since Nonaka’s (1994) seminal explanation on dynamic process
of knowledge creation, tacit knowledge has been considered as strategic resource to
allow firms to sustain the competitiveness (Hult et al., 2006). On the other hand,
researches on new product development (NPD) have increased its role under the
current business environment such as rapid market changes and diversified customer
demand. Owing to cross-functional feature, NPD has been studied in various
disciplines such as marketing and operations (Krishnan and Ulrich, 2001). Recently,
researchers in operations management have started to expand the scope of NPD
research into services and attempted to integrate manufacturing strategies with
service product development (Froehle and Roth, 2004).
While the above research streams showdistinctive developments, some papers point
out the potential of incorporating KM and NPD (Hatch and Mowery, 1998). That is,
process innovation, which is a promising avenue for the sustainable competitiveness,
is one of the most critical success factors not only in KM but also NPD.
Building on such a notion, this study investigates common themes underlying KM
and NPD and proposes integrative framework on two research streams. Major
contributions of this study can be summarized in two ways. First, our work presents a
brief literature review on KM and NPD and check current academic developments on
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1598-2688.htm
Integrative
framework
on KM
157
The Asian Journal on Quality
Vol. 11 No. 2, 2010
pp. 157-164
qEmerald Group Publishing Limited
1598-2688
DOI 10.1108/15982681011075961
two areas. We admit that this study is not a comprehensive review on KM and NPD
and that some academic perspectives on those researches might not be covered.
Nevertheless, we hope that this study plays a role of introduction to KM and NPD and
a stepping-stone for further academic researches.
Second, an integrative framework can help researchers to understand underlying
themes from distinctive research streams. We argue that an inherent feature of the KM
and NPD is process innovation and an effort to cope with volatile environments. Under
this notion, researchers may attempt to apply previous researches on innovation into
KM and NPD. On the other hand, when researchers examine cross-functional activities,
many studies tend to focus on some topics and to omit other complexities or simply put
control variables on those complexities. By presenting integrative framework, we show
one approach on how to develop a comprehensive framework to capture various
complexities. Given that cross-functional activities such as NPD are very complex, an
integrative framework can help not only researchers but also business practitioners to
understand underlying themes on cross-functional activities and to build more
simplified prescriptions on business activities.
This study is organized in the following orders. The next section conducts literature
review on KM and resource-based view and derives a core theme on KM. Section 3
addresses current academic developments on NPD. Finally, common themes between
KM and NPD and integration between two research streams are discussed.
2. Knowledge management view
This section examines important messages from KM view. Section 2.1 shows
traditional studies explaining the nature of knowledge and knowledge creation process.
Section 2.2 discusses the relationship between KM and resource-based view.
Section 2.3 attempts to link KM with organizational capabilities and discuss a pivotal
role of KM in organizational success.
2.1 Nature of knowledge
Traditional KM papers have investigated the nature of internal process and
organizational “know-how” which is hard to duplicate (Argote and Epple, 1990; Kogut
and Zander, 1992; Nonaka, 1994). Argote and Epple (1990) introduced organizational
learning and various reasons for the different productivity from learning. Kogut and
Zander (1992) discussed knowledge transfer in the multinational setting. Nonaka
(1994) presents a novel framework to explain dynamic knowledge creation. In this
paper, the author revealed the roles of the individual and the organization in the
knowledge creation and dynamic process in creating knowledge. According to the
author, knowledge is categorized into two types, tacit knowledge and explicit
knowledge. Tacit knowledge refers to subjective and experience-based knowledge that
cannot be expressed in words, while explicit knowledge refers to objective and rational
knowledge that can be expressed in words. Also, the author explains the interaction
between these two types of knowledge and how knowledge is created (Figure 1).
Fedor et al. (2003) emphasized the importance of KM in specific business context
such as team member’s ratings of project success. Argote et al. (2003) explains an
integrative framework in the KM, using two dimensions, KM and KM context.
These papers have contributed to explain the nature of knowledge and how
knowledge is created and processed. A common lesson from these studies is that
AJQ
11,2
158
organizational knowledge creation and transfer is an important innovation or process to
cope with volatile environment.
2.2 Resource-based view and KM view
Resource-based view emphasizes the importance of internal resources (Barney, 1991).
A bundle of resources, which has value, rareness, imperfect imitability, substitutability
and heterogeneity, are expected to be key sources of the sustainable competitive
advantages (Barney, 1991; Rungtusanathamet al., 2003). In line with this view, Prahalad
and Hamel (1990) asserts that a firm should identify and focus on core competencies,
outsourcing non-core competencies.
Hult et al. (2006) point out that knowledge, especially tacit knowledge, is fit with
various features of business resources and can be considered as a strategic resource of
a firm. For example, knowledge is valuable in that knowledge allows the firm to
understand customer’s needs and to create products fit for customer’s needs. Moreover,
knowledge, (especially tacit knowledge) is rare and inimitable in that tacit knowledge
cannot be codified and transmitted by ordinary means.
Considering that most forms of firm resources are easy to copy, tacit knowledge
may be the only source of valuable resource. In this sense, we may think that managing
knowledge is the only way to create and to manage valuable resources. If so, KM view
may be called as another name of resource-based view.
2.3 Linkage between KM and organizational capabilities
Some researchers have linked KM with organizational capabilities to achieve
competitiveness. Roth et al. (1994) introduced a metaphor, “the knowledge factory” and
emphasized the role of organizational learning and knowledge in achieving competitive
capabilities and core competence. Grant (1996) suggests knowledge integration as one of
the organizational capabilities insurvivingdynamic andcompetitive environments. Paiva
et al. (2002) present an empirical evidence of the impact of KM on the firm’s performance
and characteristics in information search. Oliveira et al. (2003a, b) indicates that recent
advances in technologies have changed the features of knowledge and global customer
market and, that knowledge asset strategies play a significant role in efficient global
service operations. Clark (1996) states that previous manufacturing paradigm is not
enough to cope with the current changing environment and that the true power of
manufacturing lies in integrating the capabilities of advanced manufacturing systems
Figure 1.
Interaction between tacit
knowledge and explicit
knowledge and knowledge
creation
Socialization Externalization
Internalization
Sources: Reprinted by permission. Copyright [1994] INFORMS;
Nonaka (1994); the Institute for Operations Research and the
Management Sciences, Hanover, Maryland, USA
Combination
Tacit knowledge Explicit knowledge
To
From
Tacit
knowledge
Explicit
knowledge
Integrative
framework
on KM
159
with strategic management of manufacturing. Although this paper does not specifically
address KM, the management of integration of capabilities can be regarded as process or
know-how such as organizational knowledge in managing manufacturing capabilities.
These papers point out that a mere combination of capabilities cannot obtain
competitive position in the current global market and severe competition. Under severe
competition and globalization, a firm needs to innovate and change its strategy and
structure in a very short time span, and KM is considered as an inherent asset to
accelerate such a conversion.
3. NPD and innovation
This section explores multidisciplinary characteristics of NPD and current academic
development. Section 3.1 examines various NPDresearches fromdiversified disciplines.
Section 3.2 shows the current expansion of NPD researches into services. Section 3.3
discusses a true nature of NPD and underlying themes.
3.1 Multidisciplinary approach in NPD
NPD has been an important topic in various disciplines such as marketing,
manufacturing, organization and engineering. NPD is defined as a transformation of a
market opportunity and a set of assumptions about product technology into a product
available for sale (Krishnan and Ulrich, 2001). A new product becomes the nexus of
competition (Brown and Eisenhardt, 1995) for many firms, so that it is an essential
process for success, survival and renewal of organizations, particularly for firms in
either fast-paced or competitive market.
Owing to its significant importance, NPD has been one of the major research topics
in various disciplines. Based on the distinctive perspective on the product, each
discipline has developed its own research stream on the major components of NPD
(e.g. features of the product, performance metrics, decision variables and critical success
factors). For example, marketing views a product as a bundle of attributes and use the
fit with market and market share as a major performance criteria. In marketing
research, main decision variables are product attributes and price. On the other hand,
operations management regards a product as a sequence of development and
production process steps. Under this definition, efficiency and development process
becomes a focus.
3.2 NPD in service
In addition to NPD in manufacturing, there has been an outburst of NPD in services.
Froehle et al. (2000), Menor et al. (2001) and Menor and Roth (2007) are exemplary
articles in the area. Some difference between NPD and new service product (new
service development (NSD)) is that NSD emphasizes the role of strategy while NPD
emphasizes the process. Some papers indicated the integration of technology and
capabilities. Roth (1996) presented neo-operations strategy to link capabilities-based
competition to technology. Froehle and Roth (2004) emphasized the role of technology
in measuring customer service experience.
3.3 NPD as process management
One central trend is that product development is related to the process and that an
appropriate process management of NPD is a key to the success. Griffin (1993)
AJQ
11,2
160
presented one of the initial metrics for NPD. Ettlie (1995) showed that product
development can be integrated into process development and that such integration can
be an important source of the firm success. Meyer and Utterback (1995) is another
example of product development measures and its impact on the performance.
Krishnan and Ulrich (2001) present an excellent literature review on the NPD. In this
paper, they define NPD as the transformation of market opportunity and a set of
assumptions about product technology into a product available for sale. Among
various perspectives, this paper adapts decision perspective on the NPD and
emphasizes the role of process in the NPD.
Taken together, previous researches have indicated the importance of process
and strategy in new product/service development. In order to cope with diversified and
fast-changing customer demand, a firm should improve the efficiency in the NPD
and an appropriate process management in the NPD is a key to the success.
4. Integrative view on KM and NPD
A common theme between KM and NPD is the importance of process and innovation
in achieving the competitive position. Some papers have integrated KMand NPD. Hatch
and Mowery (1998) indicated the relationship between process innovation and
organizational learning. In this paper, they suggest that simultaneous management of
process innovation and organizational learning can significantly improve the
performance. Froehle and Roth (2007) presented a resource-process framework of
NSD. Contrasting process-oriented and resource- practices, this paper presents a single
theory to explain seemingly contradictory phenomena.
In the current market, NPD plays a significant role in satisfying customer demands
and managing the organizational knowledge can be a central facilitator to improve the
efficiency in achieving the success in NPD. In some sense, researches in the KMand NPD
are related to the transformation fromestablished structure into newone to cope with the
newenvironments. Therefore, two research streams should eventually converge into the
innovation process in the company. Therefore, the advent of integration researches
seems to be very desirous.
KM researches have revealed the nature of the knowledge and addressed the
appropriate creation and transfer of knowledge, which are eventually the process
management of the company. Researchers in NPD have emphasized the strategic
importance of NPD and process management in achieving time to market and effective
development. As discussed above, KM is an effective capability to manage the internal
process and the process management is the central tool to achieve the success in the
NPD. Therefore, to incorporate KM and new product/service development is an
integrative approach to achieve the competitiveness in the NPD, which is the core in
the current volatile market condition. In a fundamental sense, KMand NPD are subsets
of innovation management required in the current severe competition (Figure 2).
5. Conclusion
This study proposes an integrative framework on KM and NPD. Section 2 reviews
current literatures on KM and attempts to link KM with organizational capabilities.
By doing so, we argue that KM is a strategic resource to help internal process
management and to accelerate firm’s innovation coping with rapid environmental
changes. Section 3 illustrates current development of NPD and concludes that NPD,
Integrative
framework
on KM
161
itself, is another form of innovation to cope with volatile market and that a core success
factor in NPD is an appropriate process management. Section 4 discusses the
relationship between KM and NPD and argues that KM is a central tool for process
management, which is a key success factor in NPD and that both the KM and NPD are
eventually the subset of innovation management.
As discussed in this study, seemingly distinctive research streams, KM and NPD,
can be considered as another form of innovation, which is a firm’s effort to cope with
volatile environment. Therefore, future researchers may consider similarities between
these two perspectives and develop a more thorough research framework on
cross-functional business activities.
By presenting integrative framework on KM and NPD, this paper attempts to
contribute to academia and practitioners in the following ways. First, this study can
play a role of an introductory guideline on KM and NPD to those who are not familiar
with these areas. Although literatures on this study are not exhaustive, we attempted
to capture some important themes and to help future researchers to conduct further
investigation.
Second, this study is an effort to integrate various perspectives in operations
management and to develop a more comprehensive framework. Although business
activities, especially cross-functional activities (e.g. NPD) tend to be heavily influenced
by many factors, including all the factors makes the model too large to get an
appropriate intuition. By investigating common themes among factors or perspectives,
we may reduce the number of factors in the model and extract “sufficient” dimensions
with an appropriate explanatory power. In this way, it will allow business practitioners
to better understand complex cross-functional activities and to focus their resources.
References
Argote, L. and Epple, D. (1990), “Learning curves in manufacturing”, Management Science,
Vol. 247 No. 4945, pp. 920-4.
Argote, L., McEvily, B. andReagans, R. (2003), “Managingknowledgeinorganizations: anintegrative
framework and review of emerging themes”, Management Science, Vol. 49 No. 4, pp. 571-82.
Figure 2.
An integrative framework
on KM and NPD
Global competition
Diversified
customer demand
Environment
Knowledge
management
New
product
development
Innovation
Process
management
AJQ
11,2
162
Barney, J. (1991), “Firm resource and sustained competitive advantage”, Journal of Management,
Vol. 17, pp. 99-120.
Brown, S.L. and Eisenhardt, K.M. (1995), “Product development: past research, present findings,
and future directions”, The Academy of Management Review, Vol. 20 No. 2, pp. 343-78.
Clark, K.B. (1996), “Competing through manufacturing and the new manufacturing paradigm:
is manufacturing strategy passe?”, Production and Operations Management, Vol. 5 No. 1,
pp. 42-58.
Ettlie, J.E. (1995), “Product-process development integration in manufacturing”, Management
Science, Vol. 41 No. 7, pp. 1224-37.
Fedor, D.B., Ghosh, S., Caldwell, S.D., Maurer, T.J. and Singhal, V.R. (2003), “The effects of
knowledge management on team members’ ratings of project success and impact”,
Decision Sciences, Vol. 34 No. 3, pp. 513-39.
Froehle, C.M. and Roth, A.V. (2004), “New measurement scales for evaluating perceptions of the
technology-mediated customer service experience”, Journal of Operations Management,
Vol. 22, pp. 1-21.
Froehle, C.M. and Roth, A.V. (2007), “A resource-process framework of new service
development”, Production and Operations Management, Vol. 16 No. 2, pp. 169-88.
Froehle, C.M., Roth, A.V., Chase, R.V. and Voss, C.A. (2000), “Antecedents of new service
development effectiveness”, Journal of Service Research, Vol. 3 No. 1, pp. 3-17.
Grant, R. (1996), “Prospering in dynamically-competitive environments: organizational
capability as knowledge integration”, Organizational Science, Vol. 7 No. 4, pp. 375-87.
Griffin, A. (1993), “Metrics for measuring product development cycle time”, Journal of Production
and Innovation Management, Vol. 10, pp. 112-25.
Hatch, N.W. and Mowery, D.C. (1998), “Process innovation and learning by doing in
semiconductor manufacturing”, Management Science, Vol. 44 No. 11, pp. 1461-77.
Hult, G.T.M., Ketchen, D.J., Cavusgil, S.T. and Calantone, R.J. (2006), “Knowledge as a strategic
resource in supply chains”, Journal of Operations Management, Vol. 24, pp. 458-75.
Kogut, B. and Zander, U. (1992), “Knowledge of firm, combinative capabilities, and the
replication of technology”, Organization Sciences, Vol. 3 No. 3, pp. 383-97.
Krishnan, V. and Ulrich, K.T. (2001), “Product development decisions: a review of the literature”,
Management Science, Vol. 47 No. 1, pp. 1-21.
Menor, L.J. and Roth, A.V. (2007), “New service development competence in retail banking:
construct development and measurement validation”, Journal of Operations Management,
Vol. 25 No. 4, pp. 825-46.
Menor, L.J., Roth, A.V. and Mason, C.H. (2001), “Agility in retail banking: a numerical taxonomy
of strategic service groups”, Manufacturing and Service Operations Management, Vol. 3
No. 4, pp. 273-92.
Meyer, M.H. and Utterback, J.M. (1995), “Product development cycle time and commercial
success”, IEEE Transactions on Engineering Management, Vol. 42 No. 4, pp. 297-304.
Nonaka, I. (1994), “A dynamic theory of organizational knowledge creation”, Organizational
Science, Vol. 5 No. 1, pp. 14-37.
Oliveira, P., Roth, A.V. and Ponte, K.M. (2003a), “Cross-border mergers and acquisitions as a tool
to transfer knowledge and foster competitive capabilities”, International Journal of
Technology, Policy and Management, Vol. 3 No. 2, pp. 204-23.
Integrative
framework
on KM
163
Oliveira, P., Roth, A.V., Conley, V. and Voss, C. (2003b), “Knowledge assets in global service
strategy”, in Gibson, D., Stolp, C., Conceic¸a˜o, P. and Heitor, M. (Eds), Systems and Policies
for the Globalized Learning Economy, Praeger, Westport, CT, pp. 511-36.
Paiva, E.L., Roth, A.V. and Fensterseifer, J.E. (2002), “Focusing information in manufacturing:
knowledge management perspective”, Industrial Management & Data Systems, Vol. 102
No. 7, pp. 381-9.
Prahalad, C.K. and Hamel, G. (1990), “The core competence of the corporation”, Harvard Business
Review, May-June, pp. 79-91.
Roth, A.V. (1996), “Neo-operations strategies: linking capabilities-based competition to
technology”, in Gaynor, G.H. (Ed.), The Handbook of Technology Management,
McGraw-Hill, New York, NY, pp. 38.1-38.44.
Roth, A.V., Marucheck, A.S., Kemp, A. and Trimble, D. (1994), “The knowledge factory for
accelerated learning practices”, Planning Review, May/June, pp. 26-33.
Rungtusanatham, M., Salvador, F., Forza, C. and Choi, T.Y. (2003), “Supply chain linkages and
operational performance: a resource-based perspective”, International Journal of
Operations & Production Management, Vol. 23 No. 9, pp. 1084-99.
About the authors
Sung-Wook Kang is a doctoral student in College of Business Administration, Seoul National
University, Seoul. Sung-Wook Kang is the corresponding author and can be contacted at:
kangsw@snu.ac.kr
Soo-Wook Kim is an Associate Professor in College of Business Administration, Seoul
National University, Seoul.
AJQ
11,2
164
To purchase reprints of this article please e-mail: reprints@emeraldinsight.com
Or visit our web site for further details: www.emeraldinsight.com/reprints
Reproducedwith permission of thecopyright owner. Further reproductionprohibited without permission.