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Strategies for Knowledge

Management Success:

Exploring Organizational Efficacy


Murray E. Jennex
San Diego State University, USA
Stefan Smolnik
EBS University of Business and Law, Germany

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Library of Congress Cataloging-in-Publication Data
Strategies for knowledge management success : exploring organizational efficacy / Murray Jennex and Stefan Smolnik, editors.
p. cm.
Includes bibliographical references and index.
Summary: "This chapter presents results of a survey looking at how KM practitioners, researchers, KM students, and others
interested in KM view what constitutes KM success, including background on KM success and then a series of perspectives
on KM/KMS success"--Provided by publisher.
ISBN 978-1-60566-709-6 (hbk.) -- ISBN 978-1-60566-710-2 (ebook) 1.
Knowledge management. I. Jennex, Murray E., 1956- II. Smolnik, Stefan, 1970HD30.2.S796 2010
658.4'038--dc22
2009052394
British Cataloguing in Publication Data
A Cataloguing in Publication record for this book is available from the British Library.
All work contributed to this book is new, previously-unpublished material. The views expressed in this book are those of the
authors, but not necessarily of the publisher.

List of Reviewers
Rodrigo Baroni de Carvalho, FUMEC University, Brazil
Vittal S. Anantatmula, Western Carolina University, USA
Kerstin Fink, University of Innsbruck, Austria
Hannu Kivijrvi, Helsinki School of Economics, Finland
P. Lpez Sez, Universidad Complutense de Madrid, Spain
Shahnawaz Muhammed, Fayetteville State University, USA
Alexander Orth, Accenture, Germany
Vincent M. Ribire, Bangkok University, Thailand
Silke Wei, Federal Ministry of Finance, Austria
Suzanne Zyngier, LaTrobe University, Australia
Thomas Menkhoff, Singapore Management University, Singapore

Table of Contents

Preface ................................................................................................................................................. xiv


Section 1
Knowledge Management Success
Chapter 1
Towards a Consensus Knowledge Management Success Definition ...................................................... 1
Murray E. Jennex, San Diego State University, USA
Stefan Smolnik, EBS University of Business and Law, Germany
David T. Croasdell, University of Nevada, Reno, USA
Chapter 2
A Model of Knowledge Management Success ..................................................................................... 14
Murray E. Jennex, San Diego State University, USA
Lorne Olfman, Claremont Graduate University, USA
Chapter 3
Market Knowledge Management, Innovation and Product Performance: Survey in Medium
and Large Brazilian Industrial Firms .................................................................................................... 32
Cid Gonalves Filho, FUMEC University, Brazil
Rodrigo Baroni de Carvalho, FUMEC University, Brazil
George Leal Jamil, FUMEC University, Brazil
Chapter 4
Does KM Governance = KM Success? Insights from a Global KM Survey........................................ 51
Suzanne Zyngier, La Trobe University, Australia
Chapter 5
An Evaluation of Factors that Influence the Success of Knowledge Management Practices
in US Federal Agencies ........................................................................................................................ 74
Elsa Rhoads, The George Washington University, Institute of Knowledge & Innovation, USA
Kevin J. OSullivan, New York Institute of Technology, USA
Michael Stankosky, The George Washington University, USA

Section 2
KM Measurements
Chapter 6
Process Model for Knowledge Potential Measurement in SMEs ......................................................... 91
Kerstin Fink, University of Innsbruck, Austria
Chapter 7
Developing Individual Level Outcome Measures in the Context of Knowledge
Management Success .......................................................................................................................... 106
Shahnawaz Muhammed, American University of Middle East, Kuwait
William J. Doll, University of Toledo, USA
Xiaodong Deng, Oakland University, USA
Chapter 8
Validating Distinct Knowledge Assets: A Capability Perspective ...................................................... 128
Ron Freeze, Emporia State University, USA
Uday Kulkarni, Arizona State University, USA
Chapter 9
Assessing Knowledge Management: Refining and Cross-Validating the Knowledge
Management Index (KMI) using Structural Equation Modeling (SEM) Techniques ......................... 150
Derek Ajesam Asoh, Southern Illinois University Carbondale, USA
& National Polytechnic, University of Yaounde, Cameroon
Salvatore Belardo, University at Albany, USA
Jakov (Yasha) Crnkovic, University at Albany, USA
Chapter 10
A Relational Based-View of Intellectual Capital in High-Tech Firms................................................ 179
G. Martn De Castro, Universidad Complutense de Madrid, Spain
P. Lpez Sez, Universidad Complutense de Madrid, Spain
J.E. Navas Lpez, Universidad Complutense de Madrid, Spain
M. Delgado-Verde, Universidad Complutense de Madrid, Spain
Section 3
KM Strategies in Practice
Chapter 11
The Effect of Organizational Trust on the Success of Codification and Personalization
KM Approaches .................................................................................................................................. 192
Vincent M. Ribire, Bangkok University, Thailand

Chapter 12
Advancing the Success of Collaboration Centered KM Strategy ...................................................... 213
Johanna Bragge, Aalto University School of Economics, Finland
Hannu Kivijrvi, Aalto University School of Economics, Finland
Chapter 13
The Relevance of Integration for Knowledge Management Success:
Towards Conceptual and Empirical Evidence .................................................................................... 238
Alexander Orth, Accenture, Germany
Stefan Smolnik, EBS University of Business and Law, Germany
Murray Jennex, San Diego State University, USA
Chapter 14
Strategies for Successful Implementation of KM in a University Setting .......................................... 262
Vittal S. Anantatmula, Western Carolina University, USA
Shivraj Kanungo, George Washington University, USA
Chapter 15
DYONIPOS: Proactive Knowledge Supply ....................................................................................... 277
Silke Wei, Federal Ministry of Finance, Austria
Josef Makolm, Federal Ministry of Finance, Austria
Doris Ipsmiller, m2n development and consulting gmbh, Austria
Natalie Egger, Federal Ministry of Finance, Austria
Compilation of References .............................................................................................................. 288
About the Contributors ................................................................................................................... 317
Index ................................................................................................................................................... 325

Detailed Table of Contents

Preface ................................................................................................................................................. xiv


Section 1
Knowledge Management Success
Chapter 1
Towards a Consensus Knowledge Management Success Definition ...................................................... 1
Murray E. Jennex, San Diego State University, USA
Stefan Smolnik, EBS University of Business and Law, Germany
David T. Croasdell, University of Nevada, Reno, USA
This chapter explores knowledge management, KM, and knowledge management system, KMS, success. The inspiration for this chapter is the KM Success and Measurement minitracks held at the Hawaii
International Conference on System Sciences in January of 2007 and 2008. KM and KMS success are
issues needing to be explored. The Knowledge Management Foundations workshop held at the Hawaii
International Conference on System Sciences (HICSS-39) in January 2006 discussed this issue and
reached agreement that it is important for the credibility of the KM discipline that we be able to define
KM success. Additionally, from the perspective of KM academics and practitioners, identifying the factors, constructs, and variables that define KM success is crucial to understanding how these initiatives
and systems should be designed and implemented. This chapter presents results of a survey looking at
how KM practitioners, researchers, KM students, and others interested in KM view what constitutes
KM success. The chapter presents some background on KM success and then a series of perspectives
on KM/KMS success. These perspectives were derived by looking at responses to questions asking
academics and practitioners how they defined KM/KMS success. The chapter concludes by presenting
the results of an exploratory survey on KM/KMS success beliefs and attitudes.
Chapter 2
A Model of Knowledge Management Success ..................................................................................... 14
Murray E. Jennex, San Diego State University, USA
Lorne Olfman, Claremont Graduate University, USA

This chapter describes a knowledge management, KM, Success Model that is derived from observations generated through a longitudinal study of KM in an engineering organization, KM success factors
found in the literature, and modified by the application of these observations and success factors in
various projects. The DeLone and McLean (1992, 2003) IS Success Model was used as a framework
for the model as it was found to fit the observed success criteria and it provided an accepted theoretical
basis for the proposed model.
Chapter 3
Market Knowledge Management, Innovation and Product Performance: Survey in Medium
and Large Brazilian Industrial Firms .................................................................................................... 32
Cid Gonalves Filho, FUMEC University, Brazil
Rodrigo Baroni de Carvalho, FUMEC University, Brazil
George Leal Jamil, FUMEC University, Brazil
In a business environment characterized by a high level of competitiveness, the impact of new products
on an organizations revenue is an important factor. This research was developed with the objective
of examining empirically the relationships between market knowledge management, innovation and
the performance of new products in the market. This chapter analyzes KM (Knowledge Management)
success trough a market-oriented perspective because, at the end of the day, KM success must lead to
better organizational performance. The research model was generated by the combination of market
knowledge models and KM success and maturity models. By means of a survey, based on 387 medium
and large industrial firms, and the use of structural equation modeling, the supremacy of the competitor
knowledge management process over other constructs was verified, as the most important antecedent
of new product performance in the market. The results also revealed that innovation was strongly impacted from technology knowledge management and customer knowledge management.
Chapter 4
Does KM Governance = KM Success? Insights from a Global KM Survey........................................ 51
Suzanne Zyngier, LaTrobe University, Australia
This chapter examines factors that contribute to KM success by differentiating between KM leadership through management and through governance. We look at governance as a structural mechanism
that both embeds KM into organizational activity, and lifts it from a series of initiatives to a structured
program of activities that are subject to authority, policy, risk management, financial fiduciary duty, and
evaluation. Using evidence from 214 respondents to a global internet based KM survey; we find that
having a recognized and defined authority for KM that is well-resourced leads to strategically aligned
benefits realized from investment in KM. We demonstrate that governance through assigned authority
strongly contributes to strategic KM success.
Chapter 5
An Evaluation of Factors that Influence the Success of Knowledge Management Practices
in US Federal Agencies ........................................................................................................................ 74
Elsa Rhoads, The George Washington University, Institute of Knowledge & Innovation, USA
Kevin J. OSullivan, New York Institute of Technology, USA
Michael Stankosky, The George Washington University, USA

This research chapter investigates the status of knowledge management practices implemented across
federal agencies of the U.S. government. It analyzes the extent to which this status is influenced by the
size of the agency, whether or not the agency type is a Cabinet-level Department or Independent Agency, the longevity of KM Practices implemented in the agency, whether or not the agency has adopted a
written KM policy or strategy, and whether the primary responsibility for KM Practices in the agency
is directed by a CKO or KM unit versus other functional locations in the agency. The research also
tests for possible KM practitioner bias, since the survey was directed to members of the Knowledge
Management Working Group of the Federal CIO Council who are KM practitioners in federal agencies.
Section 2
KM Measurements
Chapter 6
Process Model for Knowledge Potential Measurement in SMEs ......................................................... 91
Kerstin Fink, University of Innsbruck, Austria
Knowledge measurement is developing into a new research field in the area of knowledge management.
To ensure that a company is successful, business, technology, and human elements must be integrated
and balanced into a knowledge measurement system. The introduction of a knowledge audit with the
objective to uncovering the tacit knowledge in an organization and of identifying the existing management practices is needed. This chapter uses the quantum mechanical thinking as a reference model for
the development of a knowledge potential measurement system. This system is influenced by three
measurement components: (1) Person-dependent variables, (2) System-dependent variables and (3)
knowledge velocity. Based on several case studies conducted in small and medium-sized enterprises,
a process model for the implementation of the knowledge potential framework is discussed and introduced. Future research and limitations of the model are discussed in the final part.
Chapter 7
Developing Individual Level Outcome Measures in the Context of Knowledge
Management Success .......................................................................................................................... 106
Shahnawaz Muhammed, American University of Middle East, Kuwait
William J. Doll, University of Toledo, USA
Xiaodong Deng, Oakland University, USA
Success of organizational level knowledge management initiatives depends on how effectively individuals implementing these initiatives use their knowledge to bring about outcomes that add value
in their work. To facilitate assessment of individual level outcomes in the knowledge management
context, this research provides a model of interrelationships among individual level knowledge management success measures which include conceptual knowledge, contextual knowledge, operational
knowledge, innovation, and performance. The model was tested using structural equation modeling
based on data collected from managerial and professional knowledge workers. The results suggest
that conceptual knowledge enhances operational and contextual knowledge. Contextual knowledge
improves operational knowledge and is also a key predictor of innovations. The innovativeness of an

individuals work along with operational knowledge enhances work performance. The results support
the proposed model. This model can potentially be used for measuring knowledge management success
at the individual level.
Chapter 8
Validating Distinct Knowledge Assets: A Capability Perspective ...................................................... 128
Ron Freeze, Emporia State University, USA
Uday Kulkarni, Arizona State University, USA
Identification and measurement of organizational Knowledge Management capabilities is necessary to
determine the extent to which an organization utilizes its knowledge assets. We developed and operationalized a set of constructs to measure capabilities associated with management of knowledge assets
identified as distinct Knowledge Capabilities (KCs) comprising the overall Knowledge Management
(KM) capability of an organizational unit. Each KC represents a distinct kind of knowledge that requires different organizational process and technological support. This delineation of knowledge allows targeted improvement to a specific KC. We present validation of these capability constructs with
empirical evidence from two separate business units in a large semi-conductor manufacturing company,
providing the basis of measurement standardization for KM Capability improvement. Confirmatory
factor analysis affirmed four KCs, each identified as an overall factor influencing a set of latent descriptor variables. Second Order and General-Specific Structural Equation Models of each capability provide evidence as to the validity of measurement of these knowledge assets. A standardized instrument
for measuring knowledge capabilities would not only allow benchmarking, but also allow tracking
capabilities over time and linking them to those performance metrics that are deemed appropriate by
the organization.
Chapter 9
Assessing Knowledge Management: Refining and Cross-Validating the Knowledge
Management Index (KMI) using Structural Equation Modeling (SEM) Techniques ......................... 150
Derek Ajesam Asoh, Southern Illinois University Carbondale, USA
& National Polytechnic, University of Yaounde, Cameroon
Salvatore Belardo, University at Albany, USA
Jakov (Yasha) Crnkovic, University at Albany, USA
With growing interest in KM-related assessments and calls for rigorous assessment tools, the objective of this study was to apply SEM techniques to refine and cross-validate the KMI, a metric to assess
the degree to which organizations are engaged in knowledge management (KM). Unlike previous KM
metrics research that has focused on scales, we modeled the KMI as a formative latent variable, thereby
extending knowledge on formative measures and index creation from other fields into the KM field.
The refined KMI metric was tested in a nomological network and found to be robust and stable when
cross-validated; thereby demonstrating consistent prediction results across independent data sets. The
study also verified the hypothesis that the KMI is positively correlated with organizational performance
(OP). Research contributions, managerial implications, limitations of the study, and direction for further research are discussed.

Chapter 10
A Relational Based-View of Intellectual Capital in High-Tech Firms................................................ 179
G. Martn De Castro, Universidad Complutense de Madrid, Spain
P. Lpez Sez, Universidad Complutense de Madrid, Spain
J.E. Navas Lpez, Universidad Complutense de Madrid, Spain
M. Delgado-Verde, Universidad Complutense de Madrid, Spain
The Resource-Based Theory (RBT) has tried to test the role of strategic resources on sustained competitive advantage and superior performance. Although this theory has found several flaws in order to
reach its objective effectively (Priem & Butler, 2001; Foss & Knudsen), recent proposals have suggested that these problems can be overcome (Peteraf & Barney, 2003). This solution requires paying a
greater attention to the analysis of knowledge stocks, developing a mid-range theory: the Intellectual
Capital-Based View (Reed, Lubatkin & Srinivasan, 2006). This mid-range and pragmatic theory allows
the hypotheses development and empirical testing in a more effective way than the Resource Based
View (RBV). There is a certain degree of general agreement about the presence of human capital and
organizational capital as the main components of intellectual capital, as well as about the fact that the
configuration of knowledge stocks will vary from one industry and firm to another one. Taking these
assumptions as a starting point, this chapter explores the configuration of intellectual capital that can
be empirically found on a sample of high-technology firms. Our findings highlight the importance of
relational capital, which must be divided in business and alliance capital, so the strategic alliances play
a relevance role in the type of firms that have been included in our research.
Section 3
KM Strategies in Practice
Chapter 11
The Effect of Organizational Trust on the Success of Codification and Personalization
KM Approaches .................................................................................................................................. 192
Vincent M. Ribire, Bangkok University, Thailand
Knowledge Management (KM) initiatives are expanding across all types of organizations worldwide.
However, not all of them are necessarily successful mainly due to an unfriendly organizational culture.
Organizational trust is often mentioned as a critical factor facilitating knowledge sharing. For this
research we took an empirical approach to validate this assumption. The purpose of this research is
to explore the relationships between organizational trust, a knowledge management strategy (codification vs. personalization) and its level of success. This study was conducted among 97 US companies
involved in knowledge management. A survey tool was developed and validated to assess the level
of trust, the level of success and the dominant KM strategy deployed by an organization. Six main
research hypotheses and a conceptual model were tested. The findings show the impact of trust on the
choice of the KM strategy as well as on the level of success.

Chapter 12
Advancing the Success of Collaboration Centered KM Strategy ...................................................... 213
Johanna Bragge, Aalto University School of Economics, Finland
Hannu Kivijrvi, Aalto University School of Economics, Finland
Knowledge is today more than ever the most critical resource of organizations. At the same time it is,
however, also the least-accessible resource that is difficult to share, imitate, buy, sell, store, or evaluate.
Organizations should thus have an explicit strategy for the management of their knowledge resources.
In this chapter we pay special attention to a KM strategy called collaboration centered strategy. This
strategy builds on the assumption that a significant part of personal knowledge can be captured and
transferred, and new knowledge created through deep collaboration between the organizations members. A critical element in the collaboration centered KM strategy is the facilitation process that involves managing relationships between people, tasks and technology. We describe how the Collaboration Engineering approach with packaged facilitation techniques called ThinkLets is able to contribute
to this endeavour.
Chapter 13
The Relevance of Integration for Knowledge Management Success:
Towards Conceptual and Empirical Evidence .................................................................................... 238
Alexander Orth, Accenture, Germany
Stefan Smolnik, EBS University of Business and Law, Germany
Murray Jennex, San Diego State University, USA
Many organizations pursue knowledge management (KM) initiatives, with different degrees of success.
One key aspect of KM often neglected in practice is following an integrated and holistic approach.
Complementary, KM researchers have increasingly focused on factors that determine KM success and
examined whether the metrics used to measure KM initiatives are reasonable. In this chapter, the importance of integration issues for successful KM is analyzed by means of a case study of a KM initiative
at an international consulting company. The investigations demonstrate the importance of an integrated
KM approach an integrated view of KM strategy, KM processes, KM technology, and company culture to ensure KM success.
Chapter 14
Strategies for Successful Implementation of KM in a University Setting .......................................... 262
Vittal S. Anantatmula, Western Carolina University, USA
Shivraj Kanungo, George Washington University, USA
Research has identified enabling factors and inhibitors for implementing knowledge management successfully and to accomplish its strategic objectives. However, it is important to understand how these
factors interact with each other to improve or inhibit the performance. With this in mind, this chapter
presents a model, based on a research study, to determine underlying relations among these factors and
develop strategies implementing KM initiatives.

Chapter 15
DYONIPOS: Proactive Knowledge Supply ....................................................................................... 277
Silke Wei, Federal Ministry of Finance, Austria
Josef Makolm, Federal Ministry of Finance, Austria
Doris Ipsmiller, m2n development and consulting gmbh, Austria
Natalie Egger, Federal Ministry of Finance, Austria
Traditional knowledge management is often combined with extra work to recollect information which
is already electronically available. Another obstacle to overcome is to make the content of the collected
information easily accessible to enquiries, as conventional searching tools provide only documents and
not the content meaning. They are often based on the search for character strings, usually resulting in
many unnecessary hits and no or less context information. The research project DYONIPOS focuses
on detecting the knowledge needs of knowledge users and automatically providing the required knowledge just in time, while avoiding additional work and violations of the knowledge workers privacy,
proposing a new way of support. This knowledge is made available through semantic linkage of the
relevant information out of existing artifacts. In addition DYONIPOS creates an individual and an organizational knowledge base just in time.
Compilation of References .............................................................................................................. 288
About the Contributors ................................................................................................................... 317
Index ................................................................................................................................................... 325

xiv

Preface

Organizations use KM (Knowledge Management), because it makes sense. KM, when done successfully,
has an impact on the organization and its members. How do organizations define and measure success or
its impact on the organization? Also, while knowing that KM improves an organization may be enough
to encourage organizations to pursue a KM initiative, many organizations still need to quantitatively
justify an investment in KM. Calculating Return on Investment (ROI), is a popular approach, but how
is this done? There are some commonly accepted first steps:

Find a need or an opportunity that KM satisfies, supports, or resolves.


Identify the costs with the need or the benefits of the opportunity.
Identify the savings or potential earnings that implementing KM will provide.
Identify the costs of implementing KM.

Easily stated but not easily done and the resulting financial numbers are often questionable. Do the
numbers present the full story for KM? Many think they do not, and that stories and anecdotes about
KM need to be included to make KM real to management (Moore, 2008). However, is this enough
measurement for an organization?
This book is about how to implement successful KM initiatives. What is required for KM to be successful? Jennex and Olfman (2005) summarized and synthesized the literature on KM/KMSs critical
success factors (CSF) into an ordered set of twelve KM CSFs identified from 17 studies of more than
200 KM projects. These CSFs were thereafter sequentially ordered according to the number of studies
identifying them:

A knowledge strategy that identifies users, sources, processes, storage strategy, knowledge, and
links to knowledge for the KMS;
Motivation and commitment of users, including incentives and training;
Integrated technical infrastructure, including networks, databases/repositories, computers, software,
and KMS experts;
An organizational culture and structure that supports learning and the sharing and use of knowledge;
A common enterprise-wide knowledge structure that is clearly articulated and easily understood;
Senior management support, including allocation of resources, leadership, and training;
Learning organization;
The KMS has a clear goal and purpose;
Measures are established to assess the impacts of the KMS and the use of knowledge, as well as
verification that the right knowledge is being captured;

xv

The search, retrieval, and visualization functions of the KMS support facilitated use of knowledge;
Work processes are designed that incorporate knowledge capture and use; and
Knowledge is secured/protected.

While the above CSFs are useful for determining if the antecedents for KM success exist in an
organization, they do not state what success is or how to assess it. This book attempts to answer these
questions. Three sections are provided: Section 1 discusses KM success. It defines what KM success
is, provides a model of KM success, and discusses KM success in a variety of contexts. Section 2 addresses the issue of measuring KM. It is proposed that organizations cannot manage what they cannot
measure. This section provides a variety of studies that provide KM measures based on various theoretical perspectives. Finally, knowing how to define KM success and how to measure KM is important, but
without a strategy for implementing the KM initiative the organization is not likely to succeed. Section
3 presents several KM strategies as implemented in a variety of contexts. The following paragraphs
provide further description of the chapters.

Section 1: Knowledge ManageMent SucceSS


Chapter 1: Towards a Consensus Knowledge Management Success Definition by Murray E. Jennex,
Stefan Smolnik, David T. Croasdell, explores knowledge management, KM, and knowledge management system, KMS, success. Identifying the factors, constructs, and variables that define KM success is
crucial to understanding how these initiatives and systems should be designed and implemented. This
chapter presents results of a survey looking at how KM practitioners, researchers, KM students, and
others interested in KM view what constitutes KM success. The chapter presents some background on
KM success and then a series of perspectives on KM/KMS success. These perspectives were derived
by looking at responses to questions asking academics and practitioners how they defined KM/KMS
success. The chapter concludes by presenting the results of an exploratory survey on KM/KMS success
beliefs and attitudes.
Chapter 2: A Model of Knowledge Management Success by Murray E. Jennex, Lorne Olfman,
describes a knowledge management, KM, Success Model that is derived from observations generated through a longitudinal study of KM in an engineering organization, KM success factors found
in the literature, and modified by the application of these observations and success factors in various
projects. The DeLone and McLean (1992, 2003) IS Success Model was used as a framework for the
model as it was found to fit the observed success criteria and it provided an accepted theoretical basis
for the proposed model.
Chapter 3: Market Knowledge Management, Innovation and Product Performance: Survey in
Medium and Large Brazilian Industrial Firms by Cid Gonalves Filho, Rodrigo Baroni de Carvalho,
George Leal Jamil. In a business environment characterized by a high level of competitiveness, the
impact of new products on an organizations revenue is an important factor. This research was developed with the objective of examining empirically the relationships between market knowledge
management, innovation and the performance of new products in the market. This chapter analyzes
KM (Knowledge Management) success through a market-oriented perspective because, at the end of
the day, KM success must lead to better organizational performance. The research model was generated by the combination of market knowledge models and KM success and maturity models. By

xvi

means of a survey, based on 387 medium and large industrial firms, and the use of structural equation
modeling, the supremacy of the competitor knowledge management process over other constructs
was verified, as the most important antecedent of new product performance in the market. The results
also revealed that innovation was strongly impacted from technology knowledge management and
customer knowledge management.
Chapter 4: Does KM Governance = KM Success? Insights from a Global KM Survey by Suzanne
Zyngier, examines factors that contribute to KM success by differentiating between KM leadership
through management and through governance. We look at governance as a structural mechanism that
both embeds KM into organizational activity, and lifts it from a series of initiatives to a structured program of activities that are subject to authority, policy, risk management, financial fiduciary duty, and
evaluation. Using evidence from 214 respondents to a global internet based KM survey; we find that
having a recognized and defined authority for KM that is well-resourced leads to strategically aligned
benefits realized from investment in KM. We demonstrate that governance through assigned authority
strongly contributes to strategic KM success.
Chapter 5: An Evaluation of Factors that Influence the Success of Knowledge Management Practices in US Federal Agencies, by Elsa Rhoads, Kevin J. OSullivan, Michael Stankosky, investigates
the status of knowledge management practices implemented across federal agencies of the U.S. government. It analyzes the extent to which this status is influenced by the size of the agency, whether
or not the agency type is a Cabinet-level Department or Independent Agency, the longevity of KM
Practices implemented in the agency, whether or not the agency has adopted a written KM policy or
strategy, and whether the primary responsibility for KM Practices in the agency is directed by a CKO
or KM unit versus other functional locations in the agency. The research also tests for possible KM
practitioner bias, since the survey was directed to members of the Knowledge Management Working
Group of the Federal CIO Council who are KM practitioners in federal agencies.

Section 2: KM MeaSureMentS
Chapter 6: Process Model for Knowledge Potential Measurement in SMEs by Kerstin Fink, shows that
knowledge measurement is developing into a new research field in the area of knowledge management.
To ensure that a company is successful, business, technology, and human elements must be integrated
and balanced into a knowledge measurement system. The introduction of a knowledge audit with the
objective to uncovering the tacit knowledge in an organization and of identifying the existing management practices is needed. This chapter uses the quantum mechanical thinking as a reference model for
the development of a knowledge potential measurement system. This system is influenced by three
measurement components: (1) Person-dependent variables, (2) System-dependent variables and (3)
knowledge velocity. Based on several case studies conducted in small and medium-sized enterprises, a
process model for the implementation of the knowledge potential framework is discussed and introduced.
Future research and limitations of the model are discussed in the final part.
Chapter 7: Developing Individual Level Outcome Measures in the Context of Knowledge Management Success by Shahnawaz Muhammed, William J. Doll, Xiaodong Deng, Show how success
of organizational level knowledge management initiatives depends on how effectively individuals
implementing these initiatives use their knowledge to bring about outcomes that add value in their
work. To facilitate assessment of individual level outcomes in the knowledge management context,

xvii

this research provides a model of interrelationships among individual level knowledge management success measures which include conceptual knowledge, contextual knowledge, operational
knowledge, innovation, and performance. The model was tested using structural equation modeling
based on data collected from managerial and professional knowledge workers. The results suggest
that conceptual knowledge enhances operational and contextual knowledge. Contextual knowledge
improves operational knowledge and is also a key predictor of innovations. The innovativeness of an
individuals work along with operational knowledge enhances work performance. The results support the proposed model. This model can potentially be used for measuring knowledge management
success at the individual level.
Chapter 8: Validating Distinct Knowledge Assets: A Capability Perspective, by Ron Freeze, Uday
Kulkarni, explain how identification and measurement of organizational Knowledge Management capabilities is necessary to determine the extent to which an organization utilizes its knowledge assets.
We developed and operationalized a set of constructs to measure capabilities associated with management of knowledge assets identified as distinct Knowledge Capabilities (KCs) comprising the overall
Knowledge Management (KM) capability of an organizational unit. Each KC represents a distinct kind
of knowledge that requires different organizational process and technological support. This delineation
of knowledge allows targeted improvement to a specific KC. We present validation of these capability
constructs with empirical evidence from two separate business units in a large semi-conductor manufacturing company, providing the basis of measurement standardization for KM Capability improvement.
Confirmatory factor analysis affirmed four KCs, each identified as an overall factor influencing a set
of latent descriptor variables. Second Order and General-Specific Structural Equation Models of each
capability provide evidence as to the validity of measurement of these knowledge assets. A standardized instrument for measuring knowledge capabilities would not only allow benchmarking, but also
allow tracking capabilities over time and linking them to those performance metrics that are deemed
appropriate by the organization.
Chapter 9: Assessing Knowledge Management: Refining and Cross-Validating the Knowledge
Management Index (KMI) using Structural Equation Modeling (SEM) Techniques, by Derek Ajesam
Asoh, Salvatore Belardo, Jakov (Yasha) Crnkovic, show how with growing interest in KM-related
assessments and calls for rigorous assessment tools, the objective of this study was to apply SEM
techniques to refine and cross-validate the KMI, a metric to assess the degree to which organizations
are engaged in knowledge management (KM). Unlike previous KM metrics research that has focused
on scales, we modeled the KMI as a formative latent variable, thereby extending knowledge on formative measures and index creation from other fields into the KM field.
The refined KMI metric was tested in a nomological network and found to be robust and stable when
cross-validated; thereby demonstrating consistent prediction results across independent data sets. The
study also verified the hypothesis that the KMI is positively correlated with organizational performance
(OP). Research contributions, managerial implications, limitations of the study, and direction for further
research are discussed.
Chapter 10: A Relational Based-View of Intellectual Capital in High-Tech Firms by G. Martn De
Castro, P. Lpez Sez, J.E. Navas Lpez, M. Delgado-Verde. The Resource-Based Theory (RBT) has
tried to test the role of strategic resources on sustained competitive advantage and superior performance.
Although this theory has found several flaws in order to reach its objective effectively (Priem & Butler,
2001; Foss & Knudsen), recent proposals have suggested that these problems can be overcome (Peteraf
& Barney, 2003). This solution requires paying a greater attention to the analysis of knowledge stocks,

xviii

developing a mid-range theory: the Intellectual Capital-Based View (Reed, Lubatkin & Srinivasan, 2006).
This mid-range and pragmatic theory allows the hypotheses development and empirical testing in a more
effective way than the Resource Based View (RBV). There is a certain degree of general agreement about
the presence of human capital and organizational capital as the main components of intellectual capital,
as well as about the fact that the configuration of knowledge stocks will vary from one industry and
firm to another one. Taking these assumptions as a starting point, this paper explores the configuration
of intellectual capital that can be empirically found on a sample of high-technology firms. Our findings
highlight the importance of relational capital, which must be divided in business and alliance capital, so
the strategic alliances play a relevance role in the type of firms that have been included in our research.

Section 3: KM StrategieS in Practice


Chapter 11: The Effect of Organizational Trust on the Success of Codification and Personalization
KM approaches by Vincent M. Ribire, explains how Knowledge Management (KM) initiatives are
expanding across all types of organizations worldwide. However, not all of them are necessarily successful mainly due to an unfriendly organizational culture. Organizational trust is often mentioned
as a critical factor facilitating knowledge sharing. For this research we took an empirical approach
to validate this assumption. The purpose of this research is to explore the relationships between organizational trust, a knowledge management strategy (codification vs. personalization) and its level
of success. This study was conducted among 97 US companies involved in knowledge management.
A survey tool was developed and validated to assess the level of trust, the level of success and the
dominant KM strategy deployed by an organization. Six main research hypotheses and a conceptual
model were tested. The findings show the impact of trust on the choice of the KM strategy as well as
on the level of success.
Chapter 12: Advancing the Success of Collaboration Centered KM Strategy by Johanna Bragge,
Hannu Kivijrvi, shows that Knowledge is the most critical resource of organizations. At the same
time it is, however, also the least-accessible resource that is difficult to share, imitate, buy, sell,
store, or evaluate. Organizations should thus have an explicit strategy for the management of their
knowledge resources. In this chapter we pay special attention to a KM strategy called collaboration
centered strategy. This strategy builds on the assumption that a significant part of personal knowledge
can be captured and transferred, and new knowledge created through deep collaboration between the
organizations members. A critical element in the collaboration centered KM strategy is the facilitation process that involves managing relationships between people, tasks and technology. We describe
how the Collaboration Engineering approach with packaged facilitation techniques called ThinkLets
is able to contribute to this endeavour.
Chapter 13: The Relevance of Integration for Knowledge Management Success: Towards Conceptual and Empirical Evidence by Alexander Orth, Stefan Smolnik, Murray Jennex. Many organizations
pursue knowledge management (KM) initiatives, with different degrees of success. One key aspect
of KM often neglected in practice is following an integrated and holistic approach. Complementary,
KM researchers have increasingly focused on factors that determine KM success and examined
whether the metrics used to measure KM initiatives are reasonable. In this chapter, the importance
of integration issues for successful KM is analyzed by means of a case study of a KM initiative at
an international consulting company. The investigations demonstrate the importance of an integrated

xix

KM approach an integrated view of KM strategy, KM processes, KM technology, and company


culture to ensure KM success.
Chapter 14: Strategies for Successful Implementation of KM in a University Setting by Vittal S.
Anantatmula, Shivraj Kanungo. Research has identified enabling factors and inhibitors for implementing
knowledge management successfully and to accomplish its strategic objectives. However, it is important
to understand how these factors interact with each other to improve or inhibit the performance. With
this in mind, this chapter presents a model, based on a research study, to determine underlying relations
among these factors and develop strategies implementing KM initiatives.
Chapter 15: DYONIPOS: Proactive Knowledge Supply by Josef Makolm, Silke Wei, Doris Ipsmiller,
Natalie Egger. Traditional knowledge management is often combined with extra work to recollect information which is already electronically available. Another obstacle to overcome is to make the content
of the collected information easily accessible to enquiries, as conventional searching tools provide only
documents and not the content meaning. They are often based on the search for character strings, usually
resulting in many unnecessary hits and no or less context information. The research project DYONIPOS
focuses on detecting the knowledge needs of knowledge users and automatically providing the required
knowledge just in time, while avoiding additional work and violations of the knowledge workers privacy, proposing a new way of support. This knowledge is made available through semantic linkage of
the relevant information out of existing artifacts. In addition DYONIPOS creates an individual and an
organizational knowledge base just in time.
These chapters come from several sources: some were submitted just to this book, some are expansions
of conference/journal articles, and some are taken directly from the International Journal of Knowledge
Management (IJKM). Taken together, we believe this book provides researchers, students, and practitioners with an excellent overview of how to implement and measure successful KM and/or knowledge
initiatives.
We hope you enjoy the book.
Murray E. Jennex
San Diego State University, USA
Stefan Smolnik
EBS University of Business and Law, Germany

referenceS
Jennex, M.E., & Olfman, L. (2005). Assessing Knowledge Management Success. International Journal
of Knowledge Management, 1(2), 33-49.
Moore, M. (2008). Justifying Your Knowledge Management Programme. White Paper retrieved on
March 30, 2009 from http://innotecture.files.wordpress.com/2008/11/justifying_your_km_prog3.pdf

Section 1

Knowledge Management
Success

Chapter 1

Towards a Consensus
Knowledge Management
Success Definition
Murray E. Jennex
San Diego State University, USA
Stefan Smolnik
EBS University of Business and Law, Germany
David T. Croasdell
University of Nevada, Reno, USA

abStract
This chapter explores knowledge management (KM), and knowledge management system (KMS), success. The inspiration for this chapter is the KM Success and Measurement minitracks held at the Hawaii
International Conference on System Sciences in January of 2007 and 2008. KM and KMS success are
issues needing to be explored. The Knowledge Management Foundations workshop held at the Hawaii
International Conference on System Sciences (HICSS-39) in January 2006 discussed this issue and
reached agreement that it is important for the credibility of the KM discipline that we be able to define
KM success. Additionally, from the perspective of KM academics and practitioners, identifying the factors, constructs, and variables that define KM success is crucial to understanding how these initiatives
and systems should be designed and implemented. This chapter presents the results of a survey looking
at how KM practitioners, researchers, KM students, and others interested in KM view what constitutes
KM success. This chapter presents some background on KM success and then a series of perspectives
on KM/KMS success. These perspectives were derived by looking at responses to questions asking academics and practitioners how they defined KM/KMS success. The chapter concludes by presenting the
results of an exploratory survey on KM/KMS success beliefs and attitudes.
DOI: 10.4018/978-1-60566-709-6.ch001

Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

Towards a Consensus Knowledge Management Success Definition

bacKground on KM SucceSS
Jennex summarized various definitions of KM to
propose that KM success be defined as reusing
knowledge to improve organizational effectiveness by providing the appropriate knowledge
to those that need it when it is needed (Jennex,
2005). KM is expected to have a positive impact
on the organization that improves organizational
effectiveness. DeLone and McLean use the terms
success and effectiveness interchangeably and
one of the perspectives proposed in this chapter
does the same for KM (DeLone and McLean,
1992 and 2003).
Jennex and Olfman (2005) summarized and
synthesized the literature on KM/KMS critical
success factors, CSFs, into an ordered set of 12
KM CSFs. CSFs were ordered based on the number of studies identifying the CSF. The following
CSFs were identified from 17 studies looking at
78 KM projects:

A knowledge strategy that identifies users, sources, processes, storage strategy,


knowledge, and links to knowledge for the
KMS;
Motivation and commitment of users including incentives and training;
Integrated technical infrastructure including networks, databases/repositories, computers, software, KMS experts;
An organizational culture and structure
that supports learning and the sharing and
use of knowledge;
A common enterprise wide knowledge
structure that is clearly articulated and easily understood;
Senior management support including allocation of resources, leadership, and providing training;
Learning organization;
There is a clear goal and purpose for the
KMS;

Measures are established to assess the impacts of the KMS and the use of knowledge as well as verifying that the right
knowledge is being captured;
The search, retrieval, and visualization
functions of the KMS support easy knowledge use;
Work processes are designed that incorporate knowledge capture and use;
Security/protection of knowledge.

However, these CSFs do not define KM/KMS


success; they just say what is needed to be successful. Without a definition of KM/KMS success
it is difficult to measure actual success.
Measuring KM/KMS success is important

To provide a basis for company valuation,


To stimulate management to focus on what
is important, and
To justify investments in KM activities
(Jennex and Olfman, 2005) (Turban and
Aronson, 2001).

Besides these reasons from an organizational


perspective, the measurement of KM and KMS
success is important for building and implementing efficient KM initiatives and systems from the
perspective of KM academics and practitioners
(Jennex and Olfman, 2005).

PerSPectiVeS on
KM/KMS SucceSS
The KM workshop at the 2006 HICSS-39 found
that there were several perspectives on KM
success. This section briefly summarizes these
perspectives.

KM Success and effectiveness


One perspective on KM success is that KM success and KM effectiveness are interchangeable

Towards a Consensus Knowledge Management Success Definition

and imply the same construct or variable. This is


based on the view that effectiveness is a manifestation of success. An example would be increasing decision-making effectiveness to generate a
positive impact on the organization resulting in
successful KM. This perspective uses both process
and outcome measures.

the value that these systems and processes provide


to an organization. KM focuses therefore more
on the outcome, while KMS focus more on the
process. These perspectives are introduced in the
following sections.

KM and KMS Success


as interchangeable

This perspective views KM success as a process


measure. KM success can be described in terms
of the efficient achievement of well defined organizational and process goals by means of the
systematic employment of both organizational
instruments and information and communication
technologies for a targeted creation and utilization
of knowledge as well as for making knowledge
available. KM is a support function to improve
knowledge-intensive business processes. An
example would be supporting the technologyforecasting process in an IT consulting firm by
technical components of a KMS (Henselewski, et
al., 2006). Complementary, the effective implementation of knowledge processes (i.e. acquisition, creation, sharing, and codification) is seen
as a part of KM success. This perspective focuses
therefore on measuring how much KM contributes
to improving the effectiveness of business and
knowledge processes.

Another perspective is that KM and KMS success


are interchangeable. KMS success can be defined
as making KMS components more effective by
improving search speed, accuracy, etc. As an example, a KMS that enhances search and retrieval
functions enhances decision-making effectiveness
by improving the ability of the decision maker to
find and retrieve appropriate knowledge in a timelier manner. The implication is that by increasing
KMS effectiveness, KMS success is enhanced and
decision making capability is enhanced leading to
positive impacts on the organization. This is how
KM success is defined and it is concluded that
enhancing KMS effectiveness makes the KMS
more successful as well as being a reflection of
KM success. The Jennex and Olfman KM Success
Model (Jennex and Olfman, 2006), based on the
DeLone and McLean (1992, 2003) IS Success
Model, combines KM and KMS success and
utilizes this perspective.

KM and KMS Success as Separate


As opposed to the previous section, this perspective views KM and KMS success as separate
measures. It is based on a narrow system view
that allows for KMS success that does not translate into KM success. KMS are often seen as a
sub-function of KM comprising technical and
organizational instruments to implement KM.
Thus, KMS success addresses implementation and
operation factors in terms of system or process
metrics whereas KM success is an assessment of

KM Success as a Process Measure

KM Success as an outcome Measure


In contrast, KM success can be viewed as an outcome measure. KM success is therefore seen as
a measure of the various outcomes of knowledge
process capabilities existing within an organization
as a result of undertaken KM initiatives. Typical
outcomes in terms of organizational performance
are the enhancement of:

Product and service quality,


Productivity,
Innovative ability and activity,
Competitive capacity and position in the
market,

Towards a Consensus Knowledge Management Success Definition

Proximity to customers and customer


satisfaction,
Employee satisfaction,
Communication and knowledge sharing,
and
Knowledge transparency and retention.

KM Success as combined Process


and outcome Measures
The last perspective views KM success as a
combination of process and outcome measures.
Respective descriptions of KM success focus
on improved process effectiveness as well as on
achieving actionable outcomes. The first and third
perspectives contain examples for this combined
approach.

MetHodologY
This chapter is exploratory research with the goal
of guiding the KM community towards a consensus
definition of KM success. The chapter builds on
the results of an exploratory and a confirmatory
survey (discussed below) reported in Jennex,
et al., (2007). These survey results included a
definition of KM success and identification of a
set of dimensions and measures. As part of the
confirmatory survey, respondents were asked
what dimensions/measures they would add or
delete from a list of those presented. This chapter
analyzes these comments by tallying them and
then putting them into context by comparing the
KM success definition dimensions and measures
to the Jennex Olfman (2006) KM Success Model.
The exploratory survey was generated through
an expert panel approach. The 30 members of the
editorial review board of the International Journal
of Knowledge Management, IJKM, were asked to
provide their definitions of KM success. Thirteen
responses were received. These responses were
used to generate an exploratory survey of KM
success, which used 5-point Likert scale items to

solicit agreement on various perspectives and proposed KM success definitions. The perspectives
were generated through an analysis of the expert
board responses that distinguished two groups.
The first grouping examined the measures used
to determine KM success. Three subgroups were
then observed: process-based measures, outcomebased measures, and a combination of process
and outcome based measures. The second grouping of responses provided two subgroups: those
that combined KM and KMS success measures
and those that viewed KM and KMS success as
separate measures. A final observation was that
many proposed definitions used success and effectiveness interchangeably.
The exploratory survey also collected data on
the KM expertise and focus of the respondents.
Furthermore, the survey offered text boxes that allowed for free form input of additional KM success
factors or measures, KM success definitions, and
thoughts on the differences between KM and KMS
success. The exploratory survey was administered
using a web form with data collected and stored
automatically. Survey respondents were solicited
via broadcast emails to the ISWorld and DSI email
list servers, to lists of KM researchers maintained
by the authors, and to the editorial review board
and list of authors for the International Journal
of Knowledge Management, IJKM. An initial
request was sent followed by a second request
approximately one week later.
One hundred and three usable survey responses
were received. Thirteen were from KM practitioners, 70 were from KM researchers, 6 were from
KM students, and 14 were from others including
academics interested in KM but not active KM
researchers. Likert items were analyzed using
means and standard deviations as no hypotheses
have been proposed and need testing.
The results of the exploratory survey were used
to generate a second survey. This survey presented
a composite definition of KM success and a set of
measures for each of the indicated dimensions. A
7-point Likert scale was used to solicit agreement

Towards a Consensus Knowledge Management Success Definition

Table 1. Opinions on KM success perspectives, mean (std dev) (5-point Likert scale)
Definition

Overall

Research

Practice

Other

Student

Success = Effectiveness

3.1 (1.4)

3 (1.4)

3.3 (1.3)

3.2 (1.5)

3.7 (0.5)

KM = KMS Success

2.6 (1.5)

2.5 (1.4)

3.2 (1.6)

3.4 (1.5)

2.2 (1)

KM = KMS Measures

2.6 (1.4)

2.4 (1.4)

3.2 (1.6)

3 (1.4)

2.4 (0.9)

KM Success = Process

2 (1)

1.9 (0.9)

2.2 (1.1)

1.9 (0.8)

3 (1.3)

2 (1)

2 (1)

2.2 (1.4)

1.7 (0.8)

2.3 (1)

4 (0.9)

3.9 (1)

3.8 (1)

4.3 (0.6)

4.2 (0.8)

KM Success = Outcomes
KM Success = Process & Outcomes

on the composite definition and each set of measures. Additionally, as in the exploratory survey
items were provided for collecting data on KM
expertise and respondent focus. Also, each set
of measures had boxes where respondents could
indicate measures they would add or remove from
each set of measures.
The second survey was also administered
using a web form with respondents solicited in
the same manner as the exploratory survey. One
hundred and ninety-four usable survey responses
were received. Sixteen were from KM practitioners, 114 were from KM researchers, 23 from
KM students, and 41 were from others including
academics interested in KM but not active KM
researchers. Likert items were analyzed using
means and standard deviations as no hypotheses
have been proposed and need testing.

reSultS
There was little consensus on KM success perspective or definition from the first survey while we
did find agreement on a definition of KM success
and measures of success in the second survey.
The results of the first survey are summarized in
Tables 1-3 while the results of the second survey
are presented in Table 4.
Table 1 presents opinions with respect to the
perspectives on KM success. The only perspective
that tends to have any consensus agreement is
that KM success is a combination of process and

outcome measures and is NOT just process or just


outcomes. We are undecided if success and effectiveness are equivalent measures and tend to
be undecided to slightly against the idea that KM
and KMS success are equivalent.
Overall n = 103, researcher n = 70, practitioner
n=13, academics n=14, and student n=6, Values
are rounded to 2 significant digits
Table 2 summarizes opinions on five suggested components of KM and KMS success
definitions. There appears to be consensus on
using organization-specific subjective measures
derived for KM process capabilities. Examples
of these capabilities include knowledge reuse,
quality, relevance, effectiveness of acquisition,
search, and application of knowledge, etc. There
also appears to be consensus that any KM success
definition should include providing the appropriate
knowledge when needed. Additionally, there is
consensus that use is not a good measure of KMS
success. It is interesting to note that practitioners
and students support the use of firm performance
measures as indicators of KM success while there
is less support for these measures from researchers
and academics. It is also interesting to note that
academics and students tend to support the use
of measures reflecting direct returns from organizational and individual learning and application
of knowledge while researchers and practitioners
are less favorable to them.
Overall n = 103, researcher n = 70, practitioner
n=13, academics n=14, and student n=6, Values
are rounded to 2 significant digits

Towards a Consensus Knowledge Management Success Definition

Table 2. Opinions on KM and KMS success definition components, mean (std dev) (5-point Likert scale)
Overall

Research

Practice

Other

Student

Subjective measure of various outcomes of KM processes capabilities should be included in a definition of KM success
4.1 (0.8)

4 (0.9)

4.3 (0.8)

4.2 (0.9)

4.5 (0.8)

Achieving direct returns from learning and projection should be included in a definition of KM success
3.8 (1)

3.7 (1)

4 (1)

3.6 (1)

4.3 (0.5)

Success of KMS should be measured in terms of pure usage statistics should be included in a definition of KM success
2.5 (1.2)

2.5 (1.2)

2.2 (1.1)

2.6 (1.2)

2.8 (1.2)

Success of KMS should be measured in terms of firm performance should be included in a definition of KM success
3.7 (1)

4.1 (1)

3.6 (1.1)

3.5 (0.8)

4 (0.9)

Providing the appropriate knowledge when needed should be included in a definition of KM success
4.2 (0.9)

4.2 (0.9)

4.3 (0.9)

4.4 (0.6)

4.3 (0.5)

Table 3. Opinions on KM and KMS success definitions; mean (std dev) (5-point Likert scale)
Overall

Research

Practice

Other

Students

KMS success can be defined as making KMS components more effective by improving search speed, accuracy, etc.
3 (1.2)

2.8 (1.1)

3.6 (1.2)

3.1 (1.1)

3.2 (1)

KM success is the ability to leverage knowledge resources to achieve actionable outcomes.


4 (1)

4 (1)

4.3 (0.9)

3.9 (0.9)

3.7 (1)

KM success is reusing knowledge to improve organizational effectiveness by providing the appropriate knowledge to those that need it
when it is needed.
3.9 (1)

3.8 (1.1)

4.4 (0.91)

4.1 (0.7)

3.8 (0.4)

KM success is knowledge tacit and explicit alike circulates freely throughout the organization, with no debilitating clumping, clotting, or hemorrhaging.
3 (1.2)

2.8 (1.2)

3.2 (1.5)

3.4 (0.8)

2.7 (1)

KM success is the efficient achievement of well defined organizational and process goals by means of the systematic employment of both
organizational instruments and information and communication technologies for a targeted creation and utilization of knowledge as well
as for making knowledge available.
3.7 (1.2)

3.5 (1.3)

4.2 (1.1)

Table 3 summarizes opinions on five suggested


definitions of KM and KMS success. There appears to be little consensus on these definitions
other than a general neutrality on KM success
as the flow of knowledge and KMS success as
improving effectiveness of the KMS components.
However, there are some interesting observations. KM success as the ability to leverage knowledge resources to achieve actionable outcomes
is overall supported with the strongest support

3.8 (0.9)

3.8 (1.2)

coming from practitioners. This is interesting


but not surprising as practitioners tend to favor
definitions and measures that are objective, readily measurable, and have an obvious impact on
the organization.
This is also why practitioners favor KM success
as reusing knowledge to improve organizational
effectiveness and KM success as the efficient
achievement of well defined organizational goals
for targeted creation and utilization of knowledge.

Towards a Consensus Knowledge Management Success Definition

Table 4. Opinions on KM and KMS success definition and sets of measures, mean (std dev) (5-point
Likert scale)
Overall

Research

Practice

Other

Student

KM success is a multidimensional concept. It is defined by capturing the right knowledge, getting the right knowledge to the right user,
and using this knowledge to improve organizational and/or individual performance. KM success is measured using the dimensions of
impact on business processes, strategy, leadership, efficiency and effectiveness of KM processes, efficiency and effectiveness of the KM
system, organizational culture, and knowledge content.
5.4 (1.4)

5.3 (1.5)

6.1 (1.4)

5.6 (1.4)

5.5 (1.2)

5.7 (1.2)

5.7 (1.0)

5.3 (1.4)

5.7 (1.0)

5.3 (1.3)

5.4 (1.6)

Impact on business process measures


5.5 (1.3)

5.3 (1.4)

5.8 (1.4)
Strategy measures

5.3 (1.4)

5.1 (1.6)

5.2 (1.5)

5.1 (1.5)

6.1 (0.6)
Leadership measures
5.3 (1.5)

KM process effectiveness and efficiency measures


5.7 (1.3)

5.5 (1.4)

6.2 (0.8)

5.8 (1.3)

5.7 (1.4)

KM system effectiveness and efficiency measures


5.6 (1.3)

5.5 (1.4)

6.0 (0.7)

5.8 (1.2)

5.4 (1.3)

5.7 (1.1)

5.6 (1.2)

5.7 (1.2)

5.5 (1.3)

Learning culture measures


5.6 (1.2)

5.5 (1.4)

5.4 (1.4)

5.2 (1.5)

6.0 (0.8)
Knowledge content measures
6.0 (1.0)

Overall n = 103, researcher n = 70, practitioner


n=13, academics n=14, and student n=6, Values
are rounded to 2 significant digits
Table 4 summarizes opinions from the second
survey on a proposed success definition generated
from the first survey and sets of measures for
the dimensions listed in the proposed definition.
There appears to be some level of consensus on
the proposed definition and measures. However,
we do not consider it strong consensus given that
the mean response is between agree and somewhat
agree. Still, this is considered a strong beginning
to establishing a common definition and set of
success measures.
Overall n = 194, researcher n = 114, practitioner
n=16, others n=41, and student n=23, Values are
rounded to 2 significant digits
The comments were used to adjust the measures
identified in the survey. However, a simple tallying

of the comments and adjusting the measures based


on this tally was not useful. Instead, the comments
suggested that the entire list of dimensions and
measures in the context of a KM success model
and CSFs had to be reviewed. These findings are
discussed in the following paragraphs.
The impact on business processes dimension.
The comments suggested adding innovation and
agility as measures. They also supported removing
labor-saving measures, refining learning through
mistakes or insights, and clarifying the differences
between action and outcome measures.
The strategy dimension. In this study, strategy
refers to KM that is designed to support organization-wide strategic systems and initiatives.
The comments first questioned the meaning of
strategy. They also suggested that social network
analysis, SNA, measures should be added to provide indicators of cohesiveness, centrality, and the

Towards a Consensus Knowledge Management Success Definition

strength of ties. Additional issues were raised with


respect to strategy or alignment to strategy also
impacting employee performance, and the way in
which social capital and knowledge integration
measure strategy.
The leadership dimension. The comments
suggested adding social network analysis, SNA,
measures that provide indicators of cohesiveness,
centrality, and the strength of ties.
The KM process efficiency and effectiveness
dimension. The comments questioned whether
the measures should be lifecycle-based rather
than process-based. Additionally, they suggested
considering scalability, changing safe and effective storage of knowledge to secure, private,
and reliable storage of knowledge. However,
these terms have conceptual definitions that differ
from safe2, while effective in terms of storage
is difficult to define. The comments furthermore
questioned whether increased collaboration is a
true measure for this dimension.
The KMS effectiveness and efficiency dimension. The comments queried the synonymous
use of usability and adaptability, questioned
whether this dimension does in fact differ from
KM process, and suggested that measures like
maintenance costs and system measures such as
maintainability and availability should be added.
The learning culture dimension. The comments questioned change in leadership culture as
a leadership measure, and suggested adding organizational learning as well as incentive measures.
The knowledge content dimension. The comments questioned whether retrieval does in fact
differ from KMS retrieval and suggested adding
integrity, temporal, lifecycle, visualization, and
multifacetness measures. They furthermore suggested that knowledge creation measures should
be part of the KM process dimension.
The questions raised by the comments suggest that there may be issues with the dimensions. This drove the analysis of the dimensions
with the CSFs and the Jennex Olfman (2006)
KM Success Model. An inspection of the list of

CSFs reveals conflicts that can affect the success


dimensions. CSFs such as organizational culture,
learning organization, and senior management
support are regarded as necessary for KM to
succeed. This in turn raises the question whether
a dimension can be a CSF and, simultaneously,
a reflection of success. We conclude that this is
not likely, that CSFs are indeed necessary for
KM success to occur, but are not reflections of
KM success in and of themselves. This is borne
out by the Jennex Olfman (2006) KM Success
Model, as it is a causal model. This suggests that
the success dimensions leadership and learning
organization should be removed. Moreover, the
success dimensions in the Jennex Olfman (2006)
KM Success Model leads us to question whether
a KMS effectiveness and efficiency dimension
and perhaps even a KM process efficiency and
effectiveness dimension are required as reflections
of KM success. The following section provides a
discussion that leads to the final definition of the
dimensions of KM success.

diScuSSion
This was exploratory research so few conclusions
can be drawn. However, using two surveys has
allowed us to reach some consensus on a KM
success definition and set of success measures.
The consensus KM success definition is:
KM success is a multidimensional concept. It is
defined by capturing the right knowledge, getting
the right knowledge to the right user, and using
this knowledge to improve organizational and/
or individual performance. KM success is measured using the dimensions of impact on business
processes, strategy, leadership, efficiency and
effectiveness of KM processes, efficiency and
effectiveness of the KM system, organizational
culture, and knowledge content.

Towards a Consensus Knowledge Management Success Definition

Also, there are a few points of consensus that


can be identified from the initial survey:

KM success and KMS success may not be


the same thing.
Usage is not a good measure of KM or
KMS success.

Additionally, it is possible that there is a different focus on KM success between practitioners


and researchers. Researchers do not seem to have
a clear idea of KM success while practitioners
appear focused on KM success as being tied to
its impact on organizational performance and effectiveness. This cannot be stated conclusively,
the number of practitioner responses are too low
(n=13) making this supposition. However, it is
not unexpected that practitioners would have
a focus on organizational impact as a measure
of KM and KMS success. Given that KM is an
action discipline, researchers should accept this
focus and incorporate it into their investigations.
The preliminary set of success dimensions
must be examined critically, though, as previous
discussions have shown that there is conflict
between what is regarded as an antecedent and
thus necessary for success, and what is regarded
as a reflection of success. This is made more
complex as factors that are antecedents to KM
need to remain to sustain continued KM success.
We therefore start this discussion by examining
the research behind the CSF of organizational and
learning cultures.
In an executive development program, Alavi
and Leidner (1999) surveyed executive participants with respect to what was required for a successful KMS. They found that organizational and
cultural issues associated with user motivation to
share and use knowledge are the most significant.
Yu et al. find that KM drivers such as a learning
culture, knowledge sharing intention, KMS quality, rewards, and KM team activity significantly
affect KM performance (Yu, et al., 2004). These
conclusions were deduced from a survey of 66

Korean firms. Cross and Baird propose that KM


will not improve business performance by simply
using technology to capture and share the lessons of
experience Cross and Baird (2000). They postulate
that for KM to improve business performance, it
had to increase organizational learning through the
creation of organizational memory. Subsequently,
22 projects were examined to investigate this. The
conclusion is that improving organizational learning improves the likelihood of KM success. Chan
and Chau (2005) deduce lessons learned from a
failed case of KM in a Hong Kong organization
and find a need for a knowledge-sharing culture.
In their study of KM abandonment in four KM
projects, Lam and Chua (2005) identify CSFs for
KM from the literature, including a learning culture. Other studies identifying a learning culture
as a CSF include Goh (2002), McDermott and
ODell (2001), Zolingen, et al. (2001).
The above research examined successful and
failed KM and, on the whole, concludes that an
appropriate organizational culture and learning
culture are necessary antecedents to KM success,
but are not an outcome of KM success although.
Nevertheless, it can also be concluded that successful KM should lead to the strengthening of
organizational and learning cultures. However, it
is difficult to quantify measurements of change
in culture, which leads to the decision that organizational and learning cultural measures of KM
success should be dropped and used only as CSFs.
Leadership is an interesting concept. The CSF
of senior management support can be considered
leadership and it has been found to be necessary
for KM to succeed, but can leadership also be a reflection of KM success? In their above-mentioned
study, one of Chan and Chaus (2005) key findings
is the need for continued top management support
and involvement. Davenport et al. (1998) studied
31 projects in 24 companies (18 were successful,
five were considered failures, and eight were too
new to be rated). Eight CSFs, including senior
management support, were common in successful
KM projects. Jennex and Olfman (2000) studied

Towards a Consensus Knowledge Management Success Definition

three KM projects and also observed senior


management support as a CSF. In their abovementioned study, Lam and Chua (2005) also identify continuous top management support (as also
identified by Storey and Barnett, 2000) as a CSF.
Holsapple and Joshi (2000) investigated factors
that influenced the management of knowledge in
organizations by using a Delphi panel consisting
of 31 recognized KM researchers and practitioners
and find leadership and top management commitment/support to be crucial. This finding is also
supported by Bals et al.s (2007) study on key
success factors for a successful KM initiative in
a global bank. Furthermore, several researchers
have demonstrated the need to create incentives
and motivation within the organization to create
and reuse knowledge (Davenport, et al. (1998),
Ginsberg and Kambil (1999), Jennex and Olfman
(2000), Lam and Chua (2005), Sage and Rouse
(1999), Yu, et al. (2004)). Finally, Malhotra and
Galletta (2003) identify the critical importance
of user commitment and motivation through a
survey study of users of a KMS implemented in
a health care organization.
The above research found that continuous
senior management support is a CSF and also
necessary for sustaining KM success. Leadership
indicates support for KM, providing the management environment that encourages KM through
knowledge creation and reuse by members of the
organization, and providing adequate resources for
the KM/KMS initiative. This is an antecedent to
KM success and also an outcome of KM success as
successful KM reinforces knowledge leadership.
Why do we argue that culture is a CSF but
not an output of KM success, while leadership is
argued to be both? It is our opinion that culture
is not changed quickly, that it takes much time to
effect cultural changes but that individuals can be
changed quickly, and that success breeds success,
i.e. that successful KM will encourage senior
management to push KM even more.
Strategy as a dimension can be discussed briefly
as the only point of contention is what it actually

10

refers to. This dimension refers to the impact of


KM on organizational strategy. This can occur
through impacts on organizational and/or strategic
systems, on strategic intelligence gathering, or
merely on fulfilling strategy. This dimension differentiates between impacts on business systems
and strategic systems; it examines organizational
impacts instead of localized impacts. The decision
is therefore that this dimension needs to be renamed
and is thus changed to impacts on strategy.
The next dimensions needing discussion
are KM and KMS efficiency and effectiveness.
Since this chapter takes the perspective that KM
and KMS success are essentially similar, it follows that as success dimensions they should be
similar. However, should they even be success
dimensions? It is clear that they are antecedents to
KM success, but are improvements in efficiency
and effectiveness resultants and measures of KM
success? Using the Jennex Olfman (2006) KM
Success Model, we determine that these two dimensions are not measures of KM success. While
it is agreed that improving KM/KMS effectiveness
and efficiency will enhance KM and knowledge
reuse in an organization, we reject the notion
that simply being more effective or efficient in
KM/KMS is a reflection of KM success.
The final dimension needing discussion is
knowledge content. At first, it seems as if this
dimension should be treated the same as KM/KMS
effectiveness and efficiency. This is, however,
rejected. Instead, we accept that knowledge content is a reflection and measure of KM success,
as well as being an antecedent to KM success.
The Jennex Olfman (2006) KM Success Model
is the basis for this determination. The knowledge
quality dimension is an antecedent to KM success;
however, there is also a feedback process from
the impact of KM use to guide further knowledge
content and quality. Much like leadership, it is
anticipated that KM success will be reflected in
the increased quantity and quality of knowledge
content; and that a lack of KM success will also be

Towards a Consensus Knowledge Management Success Definition

reflected in a decrease in the quantity and quality


of knowledge content.
There are some limitations to this research. It is
quite possible that the reason little consensus has
been observed is because KM and KMS success
are complex constructs that are multidimensional.
It may be that KM and KMS success includes
outcome measures, quality of knowledge, how
well the KM processes function, organizational
culture measures, usability measures, and strategy
measures. This is consistent with the DeLone and
McLean model of Information Systems success
(DeLone and McLean, 1992 and 2003) and there
is much empirical evidence to support the correctness of this model. This model is also the basis of
the Jennex and Olfman KM Success Model (Jennex and Olfman, 2006). It is quite likely that the
exploratory survey used for this research, while
generated using an expert panel, probably did not
capture the multidimensional nature of the provided KM success definitions and therefore made
it difficult for respondents to find statements they
fully agreed with. This limitation was considered
when generating the second survey and it appears
that this has improved consensus with the KM
success definition generated from the first survey.

concluSion
It is difficult to reach any conclusions with this
research; no hypotheses were proposed or tested.
This is okay as the purpose of this chapter is to
propose a definition of KMS success. Before doing
this it is important to identify areas of consensus
and areas of disagreement. The following points
are areas of agreement:

KM and KMS success are likely different


definitions (note that at least one of the authors greatly disagrees with this point).
Use is a poor measure of KM and KMS
success.

KM success is likely a multidimensional


construct that will include process and outcome measures.
A base definition of KM success is: KM
success is reusing knowledge to improve
organizational effectiveness by providing
the appropriate knowledge to those that
need it when it is needed.

Additionally, a base definition of KM success


can be established:
KM success is a multidimensional concept. It is
defined by capturing the right knowledge, getting
the right knowledge to the right user, and using
this knowledge to improve organizational and/or
individual performance. KM success is measured
by means of the dimensions: impact on business
processes, impact on strategy, leadership, and
knowledge content.
Some areas of disagreement are in further need
of discussion:

KM success and effectiveness are likely


the same and will be able to use the same
measures.
KM and KMS success are essentially the
same (in deference to the authors and consistent with a Churchman view of a KMS
and DeLone and McLean (DeLone and
McLean, 1992 and 2003)).
The role of learning and firm performance
in KM success.
The role of outcome measures such as
speed, accuracy, amount of knowledge
stored and used, etc. in KM and KMS
success.

It is expected that it will take a great deal of


research before consensus is reached on what KM
and KMS success is. It is concluded that these
findings from an exploratory survey are a good
starting point for this discussion.

11

Towards a Consensus Knowledge Management Success Definition

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13

14

Chapter 2

A Model of Knowledge
Management Success
Murray E. Jennex
San Diego State University, USA
Lorne Olfman
Claremont Graduate University, USA

abStract
This chapter describes a knowledge management (KM), Success Model that is derived from observations
generated through a longitudinal study of KM in an engineering organization, KM success factors found
in the literature, and modified by the application of these observations and success factors in various
projects. The DeLone and McLean (1992, 2003) IS Success Model was used as a framework for the
model as it was found to fit the observed success criteria and it provided an accepted theoretical basis
for the proposed model.

introduction
Knowledge Management, KM, and Knowledge
Management System, KMS, success is an issue
needing to be explored. The Knowledge Management Foundations workshop held at the Hawaii
International Conference on System Sciences in
January 2006 discussed this issue and reached
agreement that it is important for the credibility
of the KM discipline that we be able to define
KM success. Also, Turban and Aronson (2001)
list three reasons for measuring the success of
KM and a KMS:
DOI: 10.4018/978-1-60566-709-6.ch002

To provide a basis for company valuation


To stimulate management to focus on what
is important
To justify investments in KM activities.

All are good reasons from an organizational


perspective. Additionally, from the perspective
of KM academics and practitioners, identifying
the factors/constructs/variables that define KM
success is crucial to understanding how these
initiatives and systems should be designed and
implemented. It is the purpose of this paper to
present a model that specifies and describes the
antecedents of KM/KMS success so that researchers and practitioners can predict if a specific

Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

A Model of Knowledge Management Success

KM/KMS initiative will be successful. The paper


assumes that KM and KMS success cannot be
separated; this is based on a broad, Churchman
view of what constitutes a KMS and a definition
of success that is not reliant solely on technical
effectiveness. The other basic assumption for this
paper is that success and effectiveness, as used
in the KM literature, are synonymous terms. The
remainder of the paper uses the term KM to refer
to KM and KMS and success to refer to success
and effectiveness. The reasoning for these assumptions is discussed later in the paper.
The proposed KM Success Model is an explication of the widely accepted DeLone and McLean IS
Success Model, which was used as it was able to be
modified to fit the observations and data collected
in a longitudinal study of Organizational Memory,
OM, and KM, it fit success factors found in the KM
literature, and the resulting KM Success Model
was useful in predicting success when applied to
the design and implementation of a KM initiative
and/or a KMS. Additionally, the stated purpose of
the DeLone and McLean (1992, 2003) IS Success
Model is to be a generalized framework describing
success dimensions that researchers can adapt and
define specific contexts of success (DeLone and
McLean, 2003). Before presenting the KM Success
Model we will discuss the concepts of knowledge,
KM, KMS, and KM/KMS success. We will then
briefly discuss the DeLone and McLean (1992,
2003) IS Success Model, present the KM Success Model, and discuss the differences. We will
conclude by summarizing studies that support the
KM Success Model and present operationalizations
that can be used to evaluate the constructs used to
define the KM Success Model dimensions.

Knowledge, oM, and KM


Alavi and Leidner (2001) summarize and extend
the significant literature relating to knowledge,
knowledge management, and knowledge management systems. They view organizational knowl-

edge and OM as synonymous labels as do Jennex


and Olfman (2002). This is useful as it allows for
the combination of research results from OM and
KM. It is also born out in the literature. Huber,
Davenport, and King (1998) summarize OM as the
set of repositories of information and knowledge
that the organization has acquired and retains.
Stein and Zwass (1995) define OM as the means
by which knowledge from the past is brought to
bear on present activities resulting in higher or
lower levels of organizational effectiveness, and
Walsh and Ungson (1991) define OM as stored
information from an organizations history that
can be brought to bear on present decisions.
Davenport and Prusak (1998) define knowledge as an evolving mix of framed experience,
values, contextual information and expert insight
that provides a framework for evaluating and
incorporating new experiences and information. Knowledge often becomes embedded in
documents or repositories and in organizational
routines, processes, practices, and norms. Knowledge is also about meaning in the sense that it is
context-specific (Huber, Davenport, and King,
1998). Jennex (2006) extends the concepts of
context to also include associated culture that
provides frameworks for understanding and using
knowledge. Ultimately we conclude that knowledge contains information, but information is not
necessarily knowledge. Also, we conclude that
OM contains knowledge. However, for the sake
of simplicity, we will use the term knowledge to
refer to OM and knowledge throughout this paper.
Various knowledge taxonomies exist. Alavi and
Leidner (2001) and Jennex and Croasdell (2005)
found that the most commonly used taxonomy is
Polyanis (1964 and 1967) and Nonakas (1994)
dimensions of tacit and explicit knowledge. This
paper uses this taxonomy for knowledge. Tacit
knowledge is that which is understood within
a knowers mind. It consists of cognitive and
technical components. Cognitive components
are the mental models used by the knower and
which cannot be directly expressed by data or

15

A Model of Knowledge Management Success

knowledge representations. Technical components are concrete concepts that can be readily
expressed. Explicit knowledge also consists of
these technical components that can be directly
expressed by knowledge representations. Knowledge management, KM, in an organization occurs
when members of an organization pass tacit and
explicit knowledge to each other. Information
Technology, IT, assists KM by providing knowledge repositories and methods for capturing and
retrieving knowledge. The extent of the dimension of the knowledge being captured limits the
effectiveness of IT in assisting KM. IT works best
with knowledge that is primarily in the explicit
dimension. Knowledge that is primarily in the tacit
dimension requires that more context be captured
with the knowledge where context is the information used to explain what the knowledge means
and how it is used. Managing tacit knowledge is
more difficult to support using IT solutions.
Jennex (2005) looked at what KM is and
found no consensus definition. However, using
the review board of the International Journal of
Knowledge Management as an expert panel and
soliciting definitions of KM that were used by the
board members, the following working definition
is used to define KM for this paper:
KM is the practice of selectively applying
knowledge from previous experiences of decision
making to current and future decision making
activities with the express purpose of improving
the organizations effectiveness.(Jennex, 2005)
KM is an action discipline; knowledge needs
to be used and applied for KM to have an impact.
We also need measurable impacts from knowledge
reuse for KM to be successful. Decision making
is something that can be measured and judged.
Organizations can tell if they are making the same
decisions over and over and if they are using
past knowledge to make these decisions quicker
and better. Also, decision making is the ultimate
application of knowledge. This working defini-

16

tion provides this direction for KM and leads to


a description of success for KM as being able to
provide the appropriate knowledge for decision
making when it is needed to those that need it.

Knowledge Management Systems


Alavi and Leidner (2001, p. 114) defined a KMS
as IT (Information Technology)-based systems
developed to support and enhance the organizational processes of knowledge creation, storage/
retrieval, transfer, and application. They observed
that not all KM initiatives will implement an IT
solution, but they support IT as an enabler of KM.
Maier (2002) expanded on the IT concept for the
KMS by calling it an ICT (Information and Communication Technology) system that supported the
functions of knowledge creation, construction,
identification, capturing, acquisition, selection,
valuation, organization, linking, structuring, formalization, visualization, distribution, retention,
maintenance, refinement, evolution, accessing,
search, and application. Stein and Zwass (1995)
define an Organizational Memory Information
System (OMS) as the processes and IT components
necessary to capture, store, and apply knowledge
created in the past on decisions currently being
made. Jennex and Olfman (2004) expanded this
definition by incorporating the OMS into the KMS
and adding strategy and service components to the
KMS. We expand the boundaries of a KMS by
taking a Churchman view of a system. Churchman (1979, p. 29) defines a system as a set of
parts coordinated to accomplish a set of goals;
and that there are five basic considerations for
determining the meaning of a system:

System objectives, including performance


measures
System environment
System resources
System components, their activities, goals
and measures of performance
System management.

A Model of Knowledge Management Success

Churchman (1979) also noted that systems


are always part of a larger system and that the
environment surrounding the system is outside the
systems control, but influences how the system
performs. The final view of a KMS is as a system
that includes IT/ICT components, repositories, users, processes that use and/or generate knowledge,
knowledge, knowledge use culture, and the KM
initiative with its associated goals and measures.
This final definition is important as it makes the
KMS an embodiment of the KM initiative and
making it possible to associate KM success with
KMS success.

KM Success
The above paragraphs define KM success as
reusing knowledge to improve organizational
effectiveness by providing the appropriate knowledge to those that need it when it is needed. KM is
expected to have a positive impact on the organization that improves organizational effectiveness.
DeLone and McLean (1992, 2003) use the terms
success and effectiveness interchangeably. This
paper uses KM success and KM effectiveness
interchangeably by implying that increasing decision making effectiveness has a positive impact on
the organization resulting in successful KM. KM
and KMS success is also used interchangeably.
KMS success can be defined as making KMS
components more effective by improving search
speed, accuracy, etc. As an example, a KMS that
enhances search and retrieval functions enhances
decision making effectiveness by improving the
ability of the decision maker to find and retrieve
appropriate knowledge in a more timely manner. The implication is that by increasing KMS
effectiveness, KMS success is enhanced and
decision making capability is enhanced leading
to positive impacts on the organization. This is
how KM success is defined and it is concluded
that enhancing KMS effectiveness makes the KMS
more successful as well as being a reflection of
KM success.

delone and Mclean iS


Success Model
In 1992 DeLone and McLean published their
seminal work proposing a taxonomy and interactive model for conceptualizing and operationalizing IS Success (DeLone and McLean 1992).
The DeLone and McLean (D&M) IS Success
Model is based on a review and integration of
180 research studies that used some form of system success as a dependent variable. The model
identifies six interrelated dimensions of success
as shown in Figure 1. Each dimension can have
measures for determining their impact on success and each other. Jennex, et al. (1998) adopted
the generic framework of the D&M IS Success
Model and customized the dimensions to reflect
the System Quality and Use constructs needed for
an organizational memory information system,
OMS. Jennex and Olfman (2002) expanded this
OMS Success Model to include constructs for
Information Quality.
DeLone and McLean (2003) revisited the D&M
IS Success Model by incorporating subsequent
IS Success research and addressing criticisms of
the original model. 144 articles from refereed
journals and 15 papers from the International
Conference on Information Systems, ICIS, citing
the D&M IS Success Model were reviewed with
14 of these articles reporting on studies that attempted to empirically investigate the model. The
result of the article is the modified D&M IS Success Model shown in Figure 2. Major changes
include the additions of a Service Quality dimension for the service provided by the IS group, the
modification of the Use dimension into a Intent
to Use dimension, the combination of the Individual and Organizational Impact dimensions into
an overall Net Benefits dimension, and the addition of a feedback loop from Net Benefits to Intent
to Use and User Satisfaction. This paper modifies
the Jennex and Olfman OMS Success Model into
a KM Success Model by applying KM research
and the modified D&M IS Success Model.

17

A Model of Knowledge Management Success

Figure 1. DeLone and McLeans IS Success Model (1992)

Figure 2. DeLone and McLeans Revisited IS Success Model (2003)

KM Success Model
The model developed in this paper was initially
proposed by Jennex, et al. (1998) after an ethnographic case study of KM in an engineering organization. The model was modified by Jennex and
Olfman (2002) following a five year longitudinal
study of knowledge management in an engineering organization and is based on the DeLone and
McLean (2003) revised IS Success Model. This
final model was developed to incorporate experience in using the model to design KMS and
for incorporating other KM/KMS success factor
research from the literature. Figure 3 shows the
KM Success Model. The KM Success Model is
based on DeLone and McLean (2003). Since the
KM Success Model is assessing the use of orga-

18

nizational knowledge, the Information Quality


dimension is renamed the Knowledge Quality
dimension. Also, because use of a KMS is usually
voluntary, the KM Success Model expanded the
Intention to Use dimension to include a Perceived
Benefit dimension based on Thompson, Higgins,
and Howells (1991) Perceived Benefit model used
to predict system usage when usage is voluntary.
Finally, since KM strategy/process is key to having
the right knowledge, the feedback loop is extended
back to this dimension. Dimension descriptions
of the model follow.

System Quality
Jennex and Olfman (2000, 2002) found infrastructure issues such as using a common network

A Model of Knowledge Management Success

Figure 3. KM Success Model

structure, adding KM skills to the technology


support skill set, using high end personal computers, integrated databases; and standardizing
hardware and software across the organization key
to building KM. The System Quality dimension
incorporates these findings and defines system
quality by how well KM performs the functions
of knowledge creation, storage/retrieval, transfer,
and application; how much of the knowledge is
represented in the computerized portion of the OM,
and the KM infrastructure. Three constructs: the
technological resources of the organization, KM
form, and KM level are identified. Technological
resources define the capability of an organization

to develop, operate, and maintain KM. These


include aspects such as amount of experience
available for developing and maintaining KM,
the type of hardware, networks, interfaces, and
databases used to hold and manipulate knowledge, capacities and speeds associated with KM
infrastructure, and the competence of the users
to use KM tools. Technical resources enable the
KM form and KM level constructs.
KM form refers to the extent to which the
knowledge and KM processes are computerized
and integrated. This includes how much of the
accessible knowledge is on line and available
through a single interface and how integrated

19

A Model of Knowledge Management Success

the processes of knowledge creation, storage/


retrieval, transfer, and application are automated
and integrated into the routine organizational
processes. This construct incorporates concerns
from the integrative and adaptive effectiveness
clusters proposed for KMS effectiveness use by
Stein and Zwass (1995). This construct along with
the technological resources construct influences
the KM level construct.
KM level refers to the ability to bring knowledge to bear upon current activities. This refers
explicitly to the KM mnemonic functions such
as search, retrieval, manipulation, and abstraction; and how well they are implemented. The
technological resources and form of the KMS
influence this construct in that the stronger the
technical resources and the more integrated and
computerized knowledge is, the more important
this construct is and the more effective it can be.
Additional support for these constructs come
from Alavi and Leidner (1999) who found it
important to have an integrated and integrative
technology architecture that supports database,
communication, and search and retrieval functions. Davenport, et al. (1998) who found technical
infrastructure to be crucial to effective KM. Ginsberg and Kambil (1999) who found knowledge
representation, storage, search, retrieval, visualization, and quality control to be key technical
issues. Mandviwalla, et al. (1998) who described
technical issues affecting KMS design include
knowledge storage/repository considerations, how
information and knowledge is organized so that it
can be searched and linked to appropriate events
and use, and processes for integrating the various
repositories and for re-integrating information
and knowledge extracted from specific events,
and access locations as users rarely access the
KMS from a single location (leads to network
needs and security concerns). Sage and Rouse
(1999) who identified infrastructure for capturing,
searching, retrieving, and displaying knowledge
and an understood enterprise knowledge structure
as important. Finally, several of the KMS classifi-

20

cations focus on KM support tools, architecture,


or life cycle, all requiring strong system quality.
Ultimately, given the effectiveness of information technology to provide search, storage,
retrieval, and visualization capabilities rapidly,
it is expected that a more fully computerized
system utilizing network, semantic web, and data
warehouse technologies will result in the highest
levels of system quality.

Knowledge Quality
Jennex and Olfman (2000, 2002) identified that
having a KM process and an enterprise wide
knowledge infrastructure, incorporating KM
processes into regular work practices, and that
knowledge needs were different for users of different levels were key issues to determining and
implementing what is the right knowledge for KM
to capture. Additionally it was found that KM users have formal and/or informal drivers that guide
them in selecting information and knowledge to be
retained by KM and formal and informal processes
for reviewing and modifying stored information
and knowledge. The Knowledge Quality dimension incorporates this and ensures that the right
knowledge with sufficient context is captured and
available for the right users at the right time. Three
constructs: the KM strategy/process, knowledge
richness, and linkages between knowledge components are identified. The KM strategy/process
construct looks at the organizational processes for
identifying knowledge users and knowledge for
capture and reuse, the formality of these processes
including process planning, and the format and
context of the knowledge to be stored. This construct determines the contents and effectiveness
of the other two constructs. Richness reflects the
accuracy and timeliness of the stored knowledge
as well as having sufficient knowledge context and
cultural context to make the knowledge useful.
Linkages reflect the knowledge and topic maps
and/or listings of expertise available to identify
sources of knowledge to users in the organization.

A Model of Knowledge Management Success

Hansen et al (1999) describes two types of


knowledge strategy, personification and codification and warns of trying to follow both strategies
equally at the same time. These strategies refer
to how knowledge is captured, represented, retrieved, and used. However, KM strategy/process
also needs to reflect that the knowledge needs of
the users change over time as found by the longitudinal study (Jennex and Olfman, 2002) and
that new users have a hard time understanding
codified tacit knowledge (Koskinen, 2001). As
an example new users will follow personification until they understand the context in which
knowledge is captured and used, and then they
are willing to switch to a codification strategy.
Personification corresponds to linkages in the
model shown in Figure 3, and refers to the situation
where new users initially feel more comfortable
seeking knowledge contexts from recognized
human experts on a particular subject. Following
this phase, these users tend to switch to codified
knowledge; thus, codification corresponds to
richness in the model. Additionally, Brown, et
al. (2006) found that as the procedural complexity and teachability of knowledge increased the
tendency of users to rely on linkages (person to
person knowledge transfer) also increased. Jennex (2006) discuses the impact of context and
culture on knowledge reuse and the conclusion is
that as knowledge complexity grows, the ability
to capture the context and culture information
needed to ensure the knowledge is usable and used
correctly becomes more difficult and the richness
of the stored knowledge is less able to meet this
need resulting in users shifting to using linkages
and personification. This model disagrees with
Hansen et als (1999) finding that organizations
need to select a single strategy to concentrate on
while using the other strategy in a support role
by recognizing that both strategies will exist and
that they may be equal in importance.
Additional support for these constructs
comes from Barna (2003) who identified creating a standard knowledge submission process,

methodologies and processes for the codification, documentation, and storage of knowledge,
processes for capturing and converting individual
tacit knowledge into organizational knowledge as
important. Cross and Baird (2000) who found that
for KM to improve business performance it had
to increase organizational learning by supporting personal relationships between experts and
knowledge users, providing distributed databases
to store knowledge and pointers to knowledge,
providing work processes for users to convert
personal experience into organizational learning,
and providing direction to what knowledge the
organization needs to capture and learn from.
Davenport, et al. (1998) who identified three key
success factors for KM strategy/process as clearly
communicated purpose/goals, multiple channels
for knowledge transfer, and a standard, flexible
knowledge structure. Mandviwalla, et al. (1998)
who described several strategy issues affecting
KM design. These include the KM focus (who
are the users), the quantity of knowledge to be
captured and in what formats; who filters what
is captured, what reliance and/or limitations are
placed on the use of individual memories, how
long the knowledge is useful, and the work activities and processes that utilize KM. Sage and
Rouse (1999) who identified modeling processes
to identify knowledge needs and sources, KM
strategy for the identification of knowledge to
capture and use and who will use it, an understood
enterprise knowledge structure, and clear KM
goals as important.

Service Quality
The Service Quality dimension ensures that KM
has adequate support for users to utilize KM effectively. Three constructs, management support,
user KM service quality, and IS KM service quality, are identified. Management support refers to
the direction and support an organization needs
to provide to ensure that adequate resources are
allocated to the creation and maintenance of KM,

21

A Model of Knowledge Management Success

a knowledge sharing and using organizational


culture is developed, encouragement, incentives,
and direction is provided to the work force to encourage KM use, knowledge reuse, and knowledge
sharing; and that sufficient control structures are
created in the organization to monitor knowledge
and KM use. This construct enables the other
two constructs. User KM service quality refers
to the support provided by user organizations
to help their personnel utilize KM. This support
consists of providing training to their users on
how to use KM, how to query KM, and guidance and support for making knowledge capture,
knowledge reuse, and KM use part of routine
business processes. IS KM service quality refers
to the support provided by the IS organization to
KM users and to maintaining KM. This support
consists of building and maintaining KM tools and
infrastructure, maintaining the knowledge base,
building and providing knowledge maps of the
databases, and ensuring the reliability, security,
and availability of KM.
Our previous KM success model versions included the above constructs as part of the system
quality and knowledge quality dimensions. These
constructs were extracted from these dimensions
in order to generate the constructs for the service
quality dimension and to ensure the final KM
success model was consistent with DeLone and
McLean (2003).
Additional support for these constructs come
from Alavi and Leidner (1999) who found organizational and cultural issues associated with user
motivation to share and use knowledge to be the
most significant. Barna (2003) who identified the
main managerial success factor as creating and
promoting a culture of knowledge sharing within
the organization by articulating a corporate KM
vision, rewarding employees for knowledge sharing and creating communities of practice. Other
managerial success factors include obtaining
senior management support, creating a learning
organization, providing KM training; precisely
defining KM project objectives, and creating

22

relevant and easily accessible knowledge-sharing


databases and knowledge maps. Cross and Baird
(2000) who found that for KM to improve business performance it had to increase organizational
learning by supporting personal relationships
between experts and knowledge users, and providing incentives to motivate users to learn from
experience and to use KM. Davenport, et al. (1998)
who found senior management support, motivational incentives for KM users, and a knowledge
friendly culture critical issues. Ginsberg and
Kambil (1999) who found incentives to share
and use knowledge to be the key organizational
issues. Holsapple and Joshi (2000) who found
leadership and top management commitment/
support to be crucial. Resource influences such
as having sufficient financial support and skill
level of employees were also important. Malhotra
and Galletta (2003) who identified the critical
importance of user commitment and motivation
but found that using incentives did not guarantee
a successful KMS. Sage and Rouse (1999) who
identified incentives and motivation to use KM,
clear KM goals, and measuring and evaluating
the effectiveness of KM as important. Yu, et al.
(2004) who determined that KM drivers such as
a learning culture, knowledge sharing intention,
rewards, and KM team activity significantly affected KM performance

User Satisfaction
The User Satisfaction dimension is a construct
that measures satisfaction with KM by users. It
is considered a good complementary measure of
KM use as desire to use KM depends on users
being satisfied with KM. User satisfaction is considered a better measure for this dimension then
actual KM use as KM may not be used constantly
yet still be considered effective. Jennex (2005)
found that some KM repositories or knowledge
processes, such as email, may be used daily while
others may be used once a year or less. However,
it was also found that the importance of the once

A Model of Knowledge Management Success

a year use might be greater than that of the daily


use. This makes actual use a weak measure for
this dimension given that the amount of actual use
may have little impact on KM success, as long
as KM is used when appropriate, and supports
DeLone and McLean (2003) in dropping amount
of use as a measurement of success.

Intent to Use/Perceived Benefit


The Intent to Use/Perceived Benefit dimension
is a construct that measures perceptions of the
benefits of KM by users. It is good for predicting
continued KM use when KM use is voluntary, and
amount and/or effectiveness of KM use depends
on meeting current and future user needs. Jennex and Olfman (2002) used a perceived benefit
instrument adapted from Thompson, Higgins,
and Howell (1991) to measure user satisfaction
and predict continued intent to use KM when
KM use was voluntary. Thompson, Higgins, and
Howells (1991) perceived benefit model utilizes
Triandis (1980) theory that perceptions on future
consequences predict future actions. This construct
adapts the model to measure the relationships
between social factors concerning knowledge use,
perceived KM complexity, perceived near-term
job fit and benefits of knowledge use, perceived
long-term benefits of knowledge use, and fear of
job loss with respect to willingness to contribute
knowledge. Malhotra and Galletta (2003) created
an instrument for measuring user commitment and
motivation that is similar to Thompson, Higgins,
and Howells (1991) perceived benefit model but
based on self-determination theory that uses the
Perceived Locus of Causality that may also be
useful for predicting intent to use. Additionally,
Yu, et al. (2004) found that KM drivers such as
knowledge sharing intention significantly affected
KM performance.

Net Impact
An individuals use of KM will produce an impact
on that persons performance in the workplace. In
addition, DeLone and McLean (1992) note that
an individual impact could also be an indication
that an information system has given the user a
better understanding of the decision context, has
improved his or her decision-making productivity, has produced a change in user activity, or has
changed the decision makers perception of the
importance or usefulness of the information system. Each individual impact should have an effect
on the performance of the whole organization.
Organizational impacts usually are not the summation of individual impacts, so the association
between individual and organizational impacts
is often difficult to draw. DeLone and McLean
(2003) recognized this difficulty and combined
all impacts into a single dimension. Davenport,
et al. (1998) overcame this by looking for the establishment of linkages to economic performance.
Alavi and Leidner (1999) also found it important
to measure the benefits of KM as did Jennex and
Olfman (2000).
We agree with combining all impacts into
one dimension and the addition of the feedback
loop to the User Satisfaction and Intent to Use/
Perceived Benefit dimensions but take it a step
further and extend the feedback loop to include
the KM Strategy/Process construct. Jennex and
Olfman (2002) showed this feedback in their
model relating KM, OM, organizational learning,
and effectiveness shown in Figure 4. This model
recognizes that the use of knowledge may have
good or bad benefits. It is feedback from these
benefits that drives the organization to either use
more of the same type of knowledge or to forget
the knowledge and which also provides users with
feedback on the benefit of the KMS. Alavi and
Leidner (2001) also agree that KM should allow
for forgetting of some knowledge when it has no
or detrimental benefits. To ensure this is done

23

A Model of Knowledge Management Success

Figure 4. The OM/KM Model

feedback on the value of stored knowledge needs


to be fed into the KM Strategy/Process construct.

operationalization of the Success


Model
Jennex and Olfman (2002) performed a longitudinal study of KM in an engineering organization
that identified a link between knowledge use and
improved organizational effectiveness. Although
a great deal of quantitative data was taken, it was
not possible to quantify productivity gains as a
function of knowledge use. KM was found to be
effective and to have improved in effectiveness
over a five-year period. Additionally, the engineers
were found to be more productive.
Jennex (2000) applied an early version of this
model to the construction and implementation of
a knowledge management website for assisting
a virtual project team. It was found that applying
the model to the design of the site resulted in the
project going from lagging to a leading project
in just a few months.

24

Hatami et al. (2003) used the KM Success


Model to analyze knowledge reuse and the effectiveness of decision-making. They found the
model useful in explaining the effects of culture
and knowledge needs on the overall KM success.
Jennex, Olfman, and Addo (2003) investigated
the need for having an organizational KM strategy
to ensure that knowledge benefits gained from
projects are captured for use in the organization.
They found that benefits from Y2K projects were
not being captured because the parent organizations did not have a KM strategy/process. Their
conclusion was that KM in projects can exist and
can assist projects in utilizing knowledge during
the project. However, it also led to the conclusion
that the parent organization will not benefit from
project based KM unless the organization has an
overall KM strategy/process.
The following discussion combines these
studies to provide methods of operationalizing the
constructs proposed previously. Table 1 summarizes the various measures applied in these studies.

A Model of Knowledge Management Success

Table 1. KMS success model data collection methods


Construct

Data Collection Method

Technical Resources

User competency survey, observation and document research of IS capabilities, interview with
IS Manager on infrastructure

Form of KMS

Interviews and survey of knowledge sources and form

Level of KMS

Survey of satisfaction with retrieval times, usability testing on KMS functions

KM Strategy/Process

Survey on drivers for putting knowledge into the KMS and for satisfaction with the knowledge
in the KMS, check on if a formal strategy/process exists

Richness

Usability test on adequacy of stored knowledge and associated context, interviews and satisfaction survey on adequacy of knowledge in KMS

Linkages

Usability test on adequacy of stored linkages, interviews and satisfaction surveys on satisfaction with linkages stored in KMS

Management Support

Interviews and Social Factors construct of Thompson, Higgins, and Howells survey on perceived benefit

IS KM Service Quality

Interview with IS Manager on IS capabilities. Interviews with users on needs and capabilities.
Suggest adding user satisfaction survey on service issues

User Organization KM Service Quality

Interview with user organization KM team on capabilities and responsibilities, and needs from
IS. Interview with users on needs and capabilities. Suggest adding user satisfaction survey on
service issues

User Satisfaction
Intent to Use/ Perceived Benefit
Net Impacts

Doll and. Torkzadeh (1988) End User Satisfaction Measure, any other user satisfaction measure
Thompson, Higgins, and Howells (1991) survey on perceived benefit
Determine Individual and Organizational productivity models through interviews, observation,
tend to be specific to organizations

System Quality
Three constructs were proposed for the system
quality dimension: technical resources, KM
form, and KM level. Jennex and Olfman (2002)
found that the capabilities of the IS organization
and the users can impact the success of KM. IS
infrastructure and organizational capabilities that
enhanced KM effectiveness included a fast, high
capacity infrastructure, strong application development skills, network skills, and awareness of
the user organizations knowledge requirements.
Users capabilities that enhanced KM effectiveness included a high degree of computer literacy
and high-end personal computers. Given the
importance of these technical resources, operationalization of the technical resources construct
can be accomplished by focusing on the overall
experience of the development group in building
and maintaining networked systems that support

KM, the computer capabilities of KM end-users,


and the quality of hardware, network, application,
and operating system capabilities of workstations
supporting KM.
KM level was defined as the ability to bring
past information to bear upon current activities.
This can be measured in terms of Stein and Zwasss
(1995) mnemonic functions including knowledge
acquisition, retention, maintenance, search, and
retrieval. It is expected that more effective KM
will include more sophisticated levels of these
functions. For example, more sophisticated KM
should contain the ability to do filtering, guided
exploration, and to grow memory. Usability testing
of these functions can serve as measure of how
effective they are implemented.
KM form refers to the extent to which knowledge is computerized and integrated. In essence,
the more computerized the memory (personification and codification approaches), the more inte-

25

A Model of Knowledge Management Success

grated it can be. That is, if all knowledge sources


are available in computer-based form, then it will
be possible to more effectively search and retrieve
knowledge. Integration also speaks to the external
consistency of the various KM tools. Jennex and
Olfman (2002) found that although much of the
KM used by the engineering organization was
computerized, there were many different KMS
components, each with varying kinds of storage
mechanisms and interfaces. These components
were poorly integrated, relying mainly on the
copy and paste features of the Windows interface,
and therefore limited the ability of workers to
utilize KM effectively. It was evident that more
sophisticated technical resources could produce
a more integrated set of components. Surveys of
actual knowledge repositories used for KM can
determine how much knowledge is stored in computerized forms. It is desired, but not practical, to
have all knowledge in a computer. Assessment of
this construct should focus on how much of the
knowledge that is practical for computer storage
is computerized.

Knowledge Quality
Knowledge quality has three constructs, KM strategy/process, richness, and linkages. Jennex and
Olfman (2002) used surveys of users to determine
drivers for putting knowledge into KM repositories
and user satisfaction with the knowledge that was
in these repositories. Jennex, Olfman, and Addo
(2003) surveyed organizations to determine if they
had a KM strategy and how formal it was. Jennex
and Olfman (2002) used interviews of KM users
to determine their satisfaction with the accuracy,
timeliness, and adequacy of available knowledge.
The need for linkages and personification of
knowledge was found through interviews with
users on where they went to retrieve knowledge.
Additionally, it was found that users KM needs
vary depending on their experience level in the
organization. Context of the knowledge is critical.
New members did not have this context and the

26

knowledge repositories did not store sufficient


context for a new member to understand and
use the stored knowledge. It was found that new
members need linkages to the human sources of
knowledge. It is not expected that KM will ever
be able to do an adequate job of storing context
so it is recommended that KM store linkages to
knowledge.

Service Quality
Service quality was defined previously as how well
the organization supports KM. Three constructs
are proposed: management support, IS KM service
quality, and user KM service quality. Jennex and
Olfman (2002) identified these constructs through
interviews that found evidence to show that the
service quality of the IS and user organizations
can impact KM success and that service quality
was determined by the organizations possessing
certain capabilities. IS KM service consisted of IS
being able to build and maintain KM components
and to map the knowledge base. IS organizational
capabilities that enhanced this service effectiveness included data integration skills, knowledge
representation skills, and awareness of the user
organizations knowledge requirements. User organization KM service consisted of incorporating
knowledge capture into work processes and being
able to identify key knowledge requirements.
User organization KM capabilities that enhanced
this service effectiveness included understanding and being able to implement KM techniques
such as knowledge taxonomies, ontologies, and
knowledge maps; and process analysis capabilities. Additionally, service was enhanced by either
the IS or the user organization providing training
on how to construct knowledge searches, where
the knowledge was located, and how to use KM.
The key construct, management support, was
measured using interviews and the social factors
measure of Thompson, Higgins, and Howells
survey on perceived benefit. The social factors
measure uses a likert scale survey to determine

A Model of Knowledge Management Success

perceptions of support from peers, supervisors, and


managers and gives a good view as to the ability
of the organizational culture to support KM and
management support for doing KM. Additionally,
individual and organizational productivity models
were generated using interviews with managers that provide an assessment of the impact of
knowledge use on individuals and organizations
and what incentives are being used to encourage
KM participation.
IS organization KM support was measured by
determining the overall experience of the development group in building and maintaining networked
systems that support KM and the satisfaction of
the KM end-users with this support. User organization KM support was measured by determining
what support was provided and how satisfied the
users were with it. Measures assessing specific
areas of capability can be used should less than
acceptable service satisfaction be found.

User Satisfaction
User satisfaction is a construct that measures perceptions of KM by users. This is one of the most
frequently measured aspects of IS Success, and
it is also a construct with a multitude of measurement instruments. User satisfaction can relate to
both product and service. As noted above, product
satisfaction is often used to measure knowledge
quality. Product satisfaction can be measured
using the 12-item instrument developed by Doll
and Tordzadeh (1988). This measure addresses
satisfaction with content, accuracy, format, ease
of use, and timeliness. Additionally, measures
addressing satisfaction with interfaces should
be used. Other user satisfaction measures can be
used to assess the specific quality constructs as
discussed in previous paragraphs.

Intent to Use/Perceived Benefit


Jennex, et al. (1998) used Thompson, Higgins,
and Howells (1991) Perceived Benefit Model

to predict continued voluntary usage of KM by


the engineering organization. Four factors from
the model plus one added by Jennex and Olfman
were in the survey:

Job fit of KM, near term consequences of


using KM
Job fit of KM, long term consequences of
using KM
Social factors in support of using KM
Complexity of KM tools and processes.
Fear of job loss for contributing knowledge to KM

All five factors were found to support continued KM use during the initial measurements.
Jennex and Olfman (2002) found continued KM
use throughout the five years of observing KM
usage and concluded that the Perceived Benefit
model was useful for predicting continued use.
Jennex (2000) used these factors to design the
site, work processes, and management processes
for a virtual project team using web based KM
to perform a utility Year 2000 project. Promoting
the Social factors and providing near term job fit
were critical in ensuring the virtual project team
utilized KM. KM use was considered highly successful as the project went from performing in the
bottom third of utility projects to performing in
the top third of all utility projects.

Net Benefits
The net benefits dimension looks for any benefits
attributed to use of the KMS. We attempted to
measure benefits associated with individual and
organizational use of KM through the generation
of productivity models which identified where
knowledge use impacted productivity. KM benefits for an individual are found in their work
processes. Jennex and Olfman (2002) queried
supervisors and managers to determine what they
believed were the nature of individual productivity in the context of the station-engineering work

27

A Model of Knowledge Management Success

process. The interviews revealed a complex set


of factors. Those benefiting from KM include:

Timeliness in completing assignments and


doing them right the first time
Number of assignments completed
Identification and completion of high priority assignments
Completeness of solutions
Quality of solutions (thoroughness and
accuracy)
Complexity of the work that can be assigned to an engineer
Client satisfaction.

While many of these factors are measured


quantitatively, it was not possible to directly
attribute changes in performance solely to KM
use although improvements in performance were
qualitatively attributed to KM use. Additionally,
Jennex and Olfman (2002) asked 20 engineers to
indicate whether they were more productive now
than 5 or 10 years ago, and all but one thought they
were. This improvement was primarily attributed
to KM use but was also a qualitative assessment.
Organizational impacts relate to the effectiveness of the organization as a whole. For a nuclear
power plant, specific measures of effectiveness
were available. These measures relate to assessments performed by external organizations, as
well as those performed internally. External assessments were found to be the most influenced
by KM use. Jennex and Olfman (2002) found
measures such as the SALP, Systematic Assessment of Licensee Performance, Reports issued
by the Nuclear Regulatory Commission and site
evaluations performed by the Institute of Nuclear
Power Operations, INPO. Review of SALP scores
issued since 1988 showed an increase from a rating of 2 to a rating of 1 in 1996. This rating was
maintained through the 5 years of the study. An
INPO evaluation was conducted during the spring
of 1996 and resulted in a 1 rating. This rating

28

was also maintained throughout the 5 years of


the study. These assessments identified several
strengths directly related to engineer productivity
using KM. These include decision-making, root
cause analysis, problem resolution, timeliness,
and Operability Assessment documentation.
This demonstrates a direct link between engineer
productivity and organization productivity. Also,
since organization productivity is rated highly, it
can be inferred that engineer productivity is high.
Two internal indicators were linked to KM use:
unit capacity and unplanned automatic scrams.
Unit capacity and unplanned scrams are influenced
by how well the engineers evaluate and correct
problems. Both indicators improved over time.
These two indicators plus unplanned outages and
duration of outages became the standard measure
during the Jennex and Olfman (2002) study and
reporting and monitoring of these factors significantly improved during the study.
The conclusion is that net benefits should be
measured using measures that are specific to the
organization and are influenced by the use of KM.
Suitable measures were found in all the studies
used for this paper and it is believed they can be
found for any organization.

concluSion
The DeLone and McLean IS Success Model is a
generally accepted model for assessing success
of an IS. Adapting the model to KM is a viable
approach to assessing KM success. The model
presented in this paper meets the spirit and intent of
DeLone and McLean (1992, 2003). Additionally,
Jennex (2000) used an earlier version of the KM
Success Model to design, build, and implement
Intranet based KM that was found to be very
effective and successful. The conclusion of this
paper is that the KM Success Model is a useful
model for predicting KM success. It is also useful
for designing effective KM.

A Model of Knowledge Management Success

areaS for future reSearcH


DeLone & McLean (1992, pp. 87-88) stated that
Researchers should systematically combine individual measures from the IS success categories to
create a comprehensive measurement instrument.
This is the major area for future KM success
research. Jennex and Olfman (2002) provided a
basis for exploring a quantitative analysis and test
of the KM Success Model. To extend this work, it
is suggested that a survey instrument to assess the
effectiveness of KM within other nuclear power
plant engineering organizations in the United
States be developed and administered. Since
these organizations have similar characteristics
and goals, they provide an opportunity to gain
a homogeneous set of data to use for testing the
model and to ultimately generate a generic set of
KM success measures.
Additionally, other measures need to be assessed for applicability to the model. In particular,
the Technology Acceptance Model, Perceived
Usefulness (Davis, 1989) should be investigated
as a possible measure for Intent to Use/Perceived
Benefit.

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31

32

Chapter 3

Market Knowledge
Management, Innovation
and Product Performance:
Survey in Medium and Large
Brazilian Industrial Firms
Cid Gonalves Filho
FUMEC University, Brazil
Rodrigo Baroni de Carvalho
FUMEC University, Brazil
George Leal Jamil
FUMEC University, Brazil

abStract
In a business environment characterized by a high level of competitiveness, the impact of new products
on an organizations revenue is an important factor. This research was developed with the objective
of examining empirically the relationships between market knowledge management, innovation and
the performance of new products in the market. This chapter analyzes KM (Knowledge Management)
success trough a market-oriented perspective because, at the end of the day, KM success must lead to
better organizational performance. The research model was generated by the combination of market
knowledge models and KM success and maturity models. By means of a survey, based on 387 medium
and large industrial firms, and the use of structural equation modeling, the supremacy of the competitor
knowledge management process over other constructs was verified, as the most important antecedent of
new product performance in the market. The results also revealed that innovation was strongly impacted
from technology knowledge management and customer knowledge management.
DOI: 10.4018/978-1-60566-709-6.ch003

Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

Market Knowledge Management, Innovation and Product Performance

introduction
In a business environment characterized by a high
level of competitiveness, the impact of new products on revenues is an important factor. Innovation
consequences include firms innovativeness, their
ability to create and implement new ideas, products and processes, and new product performance
defined as the success of new products in terms
of market share, sales, return on investment, and
profitability (Im and Workman, 2004; Hult and
Ketchen, 2001; Kirca et al., 2005). Innovation
is usually described as a knowledge-intensive
activity, involving the discovery, experimentation,
and development of new technologies, services,
production processes and organizational structures (Carneiro, 2000; Khalifa et al., 2008). In
a post-industrial society, the growing perception
of the strategic role of knowledge in innovation
processes has contributed to the development of
Knowledge Management (KM) initiatives.
KM refers to identifying and leveraging the
collective knowledge in an organization to help
it compete (von Krogh, 1998). KM intends to be
an area of research and practice that deepens the
understanding of knowledge processes in organizations, and develops procedures and instruments
to support the transformation of knowledge into
economic and social progress (Carvalho and
Ferreira, 2001). In fact, different aspects of these
issues have been studied for decades in many different disciplines, and one of the most important
contributions of the KM concept is creating a space
(in academic and business world) where practitioners and scholars from different backgrounds
may discuss and work together.
KM is closely related to the organizations
capabilities of collecting, filtering, organizing and
disseminating existing information and knowledge. The organizational knowledge strategy
is usually a mix of exploitation and exploration
(Choo and Bontis, 2002). Exploitation emphasizes
knowledge codification and the reuse of existing
knowledge. When exploitation is overemphasized,

the organization may diminish its capacity to innovate, resulting in obsolescence. On the other
hand, exploration stimulates the creation of new
knowledge, applying it to the development of
products and services. When exploration is overemphasized, the organization reduces its ability
to externalize knowledge and to convert it into
organizational memory. Despite the quicker return
on investment (ROI) of exploitation approach, the
dynamic balance between exploration and exploitation seems to produce better results in a longer
term, because innovation demands exploration.
Furthermore, the collaborative development of
strategy leverages a firms collective knowledge
and capabilities, leading to more creative and
realistic strategies (Gebhardt et al., 2006). This
collaborative process also leads to higher commitment to the firm, which again increases the
likelihood of success.
Internal sources of organizational knowledge
include business processes, databases and employees, while external sources consist of interorganizational processes, customers, business
partners, market and competitive intelligence
(Khalifa et al., 2008). Many of the existing studies
in the KM field place more emphasis on organizational internal knowledge and its exploitation.
This survey intended to discuss the exploration
perspective that is related to market and customer
knowledge, pushing the KM approach out of the
boundaries of the firm.
This complimentary orientation is justified
because it was observed that the financial results
of some firms have improved more than others in
the same market segment. As a result of efficient
market orientation and creative management of
market knowledge, it is possible that consecutive
releases of new products and services with a high
level of market acceptance have contributed to this
advantageous position. According to Martin et al.
(2009), a market orientation is a strong source of
sustainable competitive advantage because it is
difficult to imitate, focuses the firm on finding

33

Market Knowledge Management, Innovation and Product Performance

oportunitties for growth, and reduces the time lag


for responding to those opportunities.
This chapter analyzes KM success trough a
market-oriented perspective because, at the end
of the day, KM success must lead to better organizational performance which is closely related
to market results. Furthermore, competitive capacity and position in the market (sales, market
share, brand equity), proximity to customers and
customer satisfaction, and innovative ability and
activity are considered typical outcomes of organizational performance (Jennex, Smolnik, and
Croasdell, 2008). KM success includes the ability
of obtaining knowledge about the environment and
if a firm is not able to obtain market information,
it will not be able to set strategies with efficiency
and leverage performance. In a research developed
by Jennex et al., (2007), it was observed that
practitioners support the use of firm performance
measures as indicators of KM success because
they tend to favor definitions and measures that
are objective and have an obvious impact on the
organization, such as the new product performance
discussed in this chapter.
Nevertheless, some doubts arise whether the
KM initiatives are successful or if KM is just
another management fad. According to Verhoef
and Leeflang (2009), short-term financial measures still dominate management functions to the
detriment of strategic thinking and this pressure
increases as the the economy suffers and global
competition grows. To answer these questions,
both researchers and practitioners have developed
different approaches to understand and measure
the impact of KM (Paulzen and Perc, 2002; Berztis,
2002; Anantatmula and Kanungo, 2005; Khalifa
et al., 2008; Jennex et al., 2008). Some of these
approaches will be detailed further in this chapter.
Additionally, the marketing strategy literature
posits that market orientation provides a firm
with the market-sensing and customer-linking
capabilities that lead to a superior organizational
performance (Hult and Ketchen, 2001;Kirca et
al. 2005). These points raised a fundamental

34

question: What is the impact of the processes of


market knowledge management on innovation
and market results of new products?
The following section was organized to introduce the concept of market KM and to present
some KM success measurement models.

bacKground
Market orientation and Market KM
At the beginning of the 1950s, the concept of
marketing and the philosophical foundations of
the marketing orientation were introduced. Glazer
(1991) considers market knowledge a companys
strategic resource. Aaker (1998), Aaker et al.
(1998), Capon et al.(1992), Day (1999) and Geus
(1997) observed that the competencies in associated with market knowledge can be the elements
that generate competitive advantages in new
products (Porter, 1995).
Market orientation has been conceptualized
from both behavioral and cultural perspectives
(Kirca et al., 2005). The behavioral perspective
concentrates on organizational activities that are
associated to the generation, distribuition and
responsiveness to market intelligence (Kohli and
Jaworski, 1990). On the other hand, the cultural
perspective places focus on organizational norms
and values that encourage behaviors that are
consistent with market orientation (Narver and
Slater, 1990). Market orientation is a fundamental
aspect of an organizations culture that defines
competitive value, norms, artifacts and behaviors
that collectively create the opportunity for competitive advantage (Martin et al., 2009). Verhoef
and Leeflang (2009) defines market orientation
as a business culture that (1) places the highest
priority on the profitable creation and maintenance
of superior values for customers while considering
the interest of other stakeholders and (2) provides
norms of behaviors regarding market information.
The cultural perspective is also present in some KM

Market Knowledge Management, Innovation and Product Performance

success models such as Lindsey (2002) and Ehms


and Lagen (2002). Jennex and Olfman (2005) also
included organizational culture and structure for
learning, sharing and use of knowledge in a set
of 12 KM critical success factors (CSF).
Narver and Slater (1990) observed that a business should be capable of maintaining a culture
able to generate behaviors oriented to the market
in order to create superior value for the customers
and to obtain sustained competitive advantage. In
this connection, they defined market orientation
as an organizational culture that aims to create
and put into practice, in an efficient way, behaviors that generate value for the customers and
consequently (Slywotzky, 1996), better results
in the marketplace. Narver and Slater (1990)
confirmed the hypothesis that market orientation
has a significant impact on business performance.
It therefore makes sense to hold that the orientation to customers, orientation to competitors and
inter function coordination produce results for
companies.
Based on marketing orientation theory, Li and
Calantone (1998) defined marketing knowledge
as organized and structured information about the
market. In this definition, organized means it is
the result of systematic processing (as opposed
to random picking) and structured implies that it
is endowed with useful meaning (as opposed to
discrete items of irrelevant data).
The authors defined Competence of Market
Knowledge as three processes that integrate and
generate market knowledge. The three following
processes are implemented as a series of activities
that generate and integrate knowledge: management of customer knowledge; management of
competitor knowledge; and marketing-Research
& Development (R&D) interface. Although many
organizations perceive the importance of market
knowledge, there is a trend among managers to
overemphasize one process while ignoring the
others (Day and Wesley, 1988). Li and Calantone
(1998) stated that such imbalanced practice might

result in fragmentary knowledge and weaken the


effectiveness of a market KM system.
The process of customer knowledge management refers to the group of activities and behaviors
that generate knowledge about the current and
potential needs of customers concerning new
products. The process of competitor knowledge
management involves behavioral activities that
generate knowledge about competitors strategies
and actions. The interface between marketing and
R&D refers to the process by which the marketing and R&D areas communicate and cooperate
with one another. Li and Calantone (1998) applied
multivariate techniques to evaluate the following
model (Figure 1):
This study considered processes of knowledge
management that were mainly focused on knowledge available in the market, so it did not consider new knowledge generated inside the organization from innovation. Li and Calantone (1998)
also checked the influence of the processes of
customer and competitor knowledge management
on the competitive advantage of new products.
However, the weights obtained (standardized
betas) were 0.23 and 0.20 respectively, and, although relatively low, were significant. The findings also indicated that the perceived importance
of market knowledge by top management had the
largest impact on the process of market knowledge
competence. One of the interesting results of Li
and Calantones work (1998) was the evidence
that the most innovative firms, called by them as
first-movers due their short time to market, would
be able to achieve better performance because
they would have better and earlier access to customer information.
Hurley and Hult (1998) carried out important
research looking for causal relationships and
antecedents of competitive advantage, with a
special focus on innovation. In this research,
characteristics of the organization concerning
structures, processes and culture were proposed
as antecedents of innovation and performance in
the market (Figure 2).

35

Market Knowledge Management, Innovation and Product Performance

Figure 1. Li and Calantones (1998) research model

Figure 2. Hurley and Hults (1998) research model

36

Market Knowledge Management, Innovation and Product Performance

Hurley and Hults (1998) research, as well as


that carried out by Li and Calantone (1998),
demonstrated strong relations with the work of
Narver and Slater (1990) and the marketing orientation.

KM Success and KM Maturity Models


The knowledge-based view (KBV) highlights
knowledge-intensive capabilities as the main drivers of organizational performance (Grant, 1996;
Khalifa et al., 2008). Compared to a subject such
as software engineering however, the domain of
KM consists more of soft subjects to be considered. However, the existence of open standards
and common approaches for KM will allow future
work to start from a higher level, and the most
arguments which are brought against standardization of KM can be classified as general concern
against standardization (Weber et al., 2002).
In a maturity model, the levels are characterized
by specific requirements that have to be achieved
on that level, and it is highly improbable to skip a
level in an evolutionary process. An assumption of
a maturity model is that more mature organizations
have higher chances of obtaining success in their
projects. For an immature organization, success
might be a matter of trial and error, luck or as a
result of a heroic effort. In other words, it is hard
to expect clean water (organizational success) from
rusty pipes (inefficient and immature processes).
Two widely known approaches among KM
practitioners are the APQC (American Productivity & Quality Center) Road Map to KM results, and
the KMMM (KM Maturity Model) developed by
Siemens. The APQC Road Map is a methodology
to guide organizations through the five stages of
KM implementation, with relevant advice concerning processes, structures, and enablers (Hubert
and ODell, 2004). The APQC Road Map provides
a qualitative evaluation of KM practices in their
five following stages: getting started; explore and
experiment; pilots and KM initiatives; expand and
support; and institutionalize KM.

The KMMM provides qualitative and quantitative results, allowing a comprehensive assessment of the KM activities which covers eight key
areas: strategy and knowledge goals; environment
and partnerships; people and competencies; collaboration and culture; leadership and support;
knowledge structures and knowledge forms;
technology and infrastructure; processes, roles,
and organization (Ehms and Langen, 2002).
The KMMM received a strong influence of
the CMM (Capability Maturity Model) of the
Software Engineering Institute (SEI) at Carnegie
Mellon University. Although the CMM (Paulk et
al., 1995) is applied to the software development
context, the KMMM adopts the same name for its
five levels, and adapts the maturity concept to the
KM domain. The five levels are: initial, repeatable,
defined, managed, and optimizing. The maturity
level is assessed for the individual topics and condensed into one maturity level for each key area.
Berztiss (2002) also proposed a capability
maturity model for KM based on CMM. The following requirements, defined by CMM as KPA
(key process areas), were suggested for each KM
maturity level:

Level 1: absence of structured KM


practices;
Level 2: knowledge requirements management, internal knowledge acquisition, uncertainty awareness and training;
Level 3: knowledge representation, user
access and profiling;
Level 4: integrated KM process, external
knowledge acquisition, cost-benefit qualitative analysis;
Level 5: technical change management
and quantitative cost/benefit analysis.

In order to establish a more consistent link


between market orientation and KM, the research
model proposed in this chapter will also have the
Knowing Organization Model (Choo, 1998) as a
theoretical background. This framework describes

37

Market Knowledge Management, Innovation and Product Performance

organizations as systems where the processes of


sensemaking, knowledge creating and decisionmaking are continuously interacting and combining external and internal knowledge. Sensemaking
is closely related to market orientation as it is
defined as how the organization interprets and
makes sense of its changing environment which
leads to shared meanings and intent. Knowledge
creation is accomplished through the conversion
and sharing of different forms of organizational
knowledge, resulting in new capabilities, new
products and innovation. Finally, the organization
processes and analyzes information through the
use of rules and routines that reduce complexity
and uncertainty (Choo, 1998).
Smith and Farquhar (2000) proposed four
success statements for KM: (1) The organization
knows what it knows and uses it and knows what
it needs to know and learns it; (2) For any project,
for any customer, the project team delivers the
knowledge of the overall organization; (3) The
organization delivers the right information, to
the right people, at the right time with the tools
they need to use it; (4) The perspective of the
employees is aligned with that of the customers.
Lindsey (2002) proposed a KM effectiveness
model with two constructs: knowledge infrastructure capability and knowledge process capability.
The first construct represents social capital (relationships between knowledge sources and users)
and is operationalized by technology, structure,
and cultural context. Knowledge process capability represents the integration of KM processes
into the organization and is operationalized by
acquisition, conversion, application, and protection of knowledge (Lindsey, 2002; Jennex, 2005).
Massey et al. (2002) presented a KM success model with the following key components:
strategy (knowledge processes, users, technology
infrastructure), key managerial influences (top
management support, KM leadership, KM metrics), key resources influences (mainly financial
resources), and key environmental influences
defined as the external forces that drive the orga-

38

nization to exploit its knowledge to maintain its


competitive position. This chapter places more
focus on the key environmental influences that
are critical not only to KM success, but also to
organizational success.
On the other hand, after studying 147 organizations in 21 countries, Anantatmula and Kanungo
(2005) stated that widely accepted criteria and
performance measures have not been developed
for KM. Their research questions were: what are
the criteria for measuring KM success?; and how
do managers use and understand these criteria to
leverage their KM assets? Their research results
implied that managers must consciously explore
and establish the ambiguous relationships between
KM results and bottom-line business measures.
The authors also said that future research should
focus on translating the soft measures of KM into
detailed metrics.
After conducting a panel with 30 KM experts and a survey with 103 members within a
KM community, Jennex, Smolnik and Croasdell
(2007) were able to establish the following base
definition of KM success:
KM success is a multidimensional concept. It is
defined by capturing the right knowledge, getting
the right knowledge to the right user, and using
this knowledge to improve organizational and/
or individual performance. KM success is measured using the dimensions of impact on business
processes, strategy, leadership, efficiency and
effectiveness of KM processes, efficiency and
effectiveness of the KM system, organizational
culture and knowledge content.
Indeed, KM success and KM itself are very
broad concepts. For instance, Dalkir (2005) was
able to produce a list with 72 very consistent KM
definitions. Within the scope of this research, KM
success was associated with innovation and the
performance of new products in the market. This
association was a way of translating a soft KM
measure into bottom-line business measures, as

Market Knowledge Management, Innovation and Product Performance

suggested by Anantatmula and Kanungo (2005).


We also think that this external and market-oriented
perspective of KM success provides a better connection between KM and the strategy of the firm.

Main focuS of tHe cHaPter


research Model
This section explains the development process of
the research model by connecting literature review
with research constructs definitions. Most of the
previous studies consider processes of KM that
are mainly focused on pre-existent knowledge, or
knowledge available in the market, so they usually do not consider new knowledge generated
inside the organization, which has come from
innovation. In this research, characteristics of the
organization concerning structures, processes and
culture are proposed as antecedents of innovation
and performance in the market.
In a way that is similar to Li and Calantones
(1998) research framework, the model proposed
in this research consists of three dimensions:
external and internal antecedents, contributory
factors and results. However, it differs from their
model because the construct marketing-R&D
interface was replaced by the technological KM
construct. Thus, the three main processes of KM
operate in a more homogeneous way with the
aim of improving on the model proposed (Li and
Calantone, 1998) more specifically, in regard to
the market KM. The research model also adds
the construct innovation as an antecedent of
new products market performance, acting as a
mediator variable between marketing KM and
performance, in a similar way to that described
by Hurley and Hult (1998). Figure 3 illustrates
the general conceptual model of the research.
The theoretical sources of the explanatory
model are introduced next, classified by the construct involved in the model and its respective
hypothetical relations.

Process of Customer
Knowledge Management
Market orientation proposes to enhance customerperceived quality of products and services by
helping maintain superior customer value (Brady
and Cronin, 2001; Kirca et al., 2005). Market
orientation enhances customer loyalty and satisfaction because market-oriented companies
anticipate customer needs and offer products and
services to satisfy those needs (Slater and Narver,
1994). According to Verhoef and Leeflang (2009),
several studies have revealed that marketing activies, such as creating satisfied customers and
corporate advertising are positively related to
shareholder value and greater customer lifetime
value. By responding rapidly to changes in customer demand, a company can enhance customer
satisfaction and loyalty, leverage the knowledge
embedded in customers and take the advantage
of the windows of opportunities that appear in the
market from time to time (Khalifa et al., 2008).
Consistent with the theories of organizational
learning (Hair et al., 1998), the process of customer
KM can be approached using Davenport and Prusaks model (1998), which consists in generating,
codifying and distributing the knowledge. The
customer KM process would involve marketing
research, regular meetings and interactions with
customers, personal interviews and focus groups
(Capon et al., 1992) and problem-solving sessions.
Choo (1998) considered sensemaking as a
dimension of the Knowing Organization model,
Berztiss (2002) listed external knowledge acquisition as one of key indicators of KM maturity, and
Ehms and Langen (2002) included environment
and partnerships as a key area of the KMMM,
giving support to two constructs in our research
model: customer KM and competitor KM. Han,
Kim and Srivastava in Narver and Slater (1995),
Li and Calantone (1998), Jaworski and Kohli
(1990), Hurley and Hult (1998), are some of the
authors that have performed empirical research
on customer orientation, innovation, market KM

39

Market Knowledge Management, Innovation and Product Performance

Figure 3. Research Model

and management of customer-intelligence, and


their role as antecedents of results and market
orientation. Based in this analysis, hypotheses
H1 and H2 were elaborated:
H1:The more intense the process of customer KM
is, the greater will be the intensity of innovation.
H2:The more intense the process of customer
KM is, the greater will be the intensity of the
performance of the new products in the market.

Process of Competitor
Knowledge Management
Truly market-oriented firms identify competitive
advantages based on satisfying both the current
needs of customers and doing this better than
competitors (Martin et al., 2009). Narver and

40

Slater (1990) have defined customer and competitor orientation as information acquisition
and dissemination activities that are necessary to
understand what buyers value and the strategies
used by competitors in serving target buyers. This
knowledge provides a framework to create superior value for customers relative to competitors.
The process of competitor KM involves obtaining, codifying, storing and distributing information
as a continuous activity of competitive intelligence
gathering. Knowledge of competitors exercises a
fundamental role in the competitive positioning
of organizations (Day, 1999; Aaker, 1998; Geus,
1997). Geus (1997) affirmed: the only source
of competitive advantage in the future will be to
learn (about the competition) faster than your
competitors.
Previous empirical research analyzed the influence of competitors regarding intensity of market

Market Knowledge Management, Innovation and Product Performance

orientation (Narver and Slater, 1995). This fact


confirmed that the proposed model lacked important data and led to the formulation of hypotheses
H3 and H4 as follows:
H3:The more intense the process of competitor KM
is, the greater will be the intensity of innovation.
H4:The more intense the process of competitor
KM is, the greater will be the intensity of the
performance of the new products in the market.

Process of Technological
Knowledge Management
Narver and Slater (1995), along with Jaworski
and Kohli (1990), aimed to verify the empirical
connections between technological change and
the results achieved in the marketplace. Ehms and
Langen (2002) included technology and infrastructure as a key area of the KMMM. However,
Jennex (2005) proposes that for KM systems it is
not the amount of use that is important, but rather,
the quality of use and the intention to use.
In their research, Li and Calantone (1998)
failed to directly consider the management of
technological knowledge. In view of this omission and because of the importance of verifying
the influence of the management of technological knowledge on the innovation process and the
results obtained in the market, hypotheses H5 and
H6 were formulated:
H5:The greater the intensity of the process of
technological knowledge management is, the
greater will be the intensity of innovation.
H6:The greater the intensity of the process of
technological knowledge management, the greater
will be the intensity of the performance of the new
products in the market.

Innovation and Performance of


New Product in the Market
Market orientation should improve a firms inovativeness and new product performance because
it drives a continuous and proactive disposition
toward meeting customer needs (Kirca et al.,
2005). On the other hand, excessive formalization (definition of roles, procedures and authority through rules) is usually inversely related to
market orientation because it may inhibit the
development of effective responses to changes
in marketplace (Jaworski and Kohli, 1993; Kirca
et al., 2005). Furthermore, a short-term emphasis
blocks innovation and reduces investments in
brands, customers, and new business development
(Verhoef and Leeflang, 2009).
Ashok (1999) and Peters (1998) defended the
idea that innovation is perhaps the most important
element in generating competitive advantage.
Workman et al. (1998) observed a correlation
between the capacity of a company to innovate
and its competitive advantage, considering both
as just one construct. Verhoef and Leeflang (2009)
defined innovativeness of the firm as the extent to
which there is a strong emphasis on R&D, technological leadership, and innovations within the
firm. According to Khalifa et al. (2008), agility
refers to the ability to detect and seize continually
and unpredictably changing market opportunities
by assembling requisite assets, knowledge, and
relationship with speed and surprise; while innovativeness depicts the ability of the organization
to initiate and implement innovations at a faster
rate (Hurley and Hult, 1998).
Li and Calantone (1998) observed a positive
correlation between the competitive advantage
of a new product and the performance of a new
product. Hurley and Hult (1998) observed positive
relations between innovation, competitive advantage and performance, leading to the proposition
of the following hypothesis:

41

Market Knowledge Management, Innovation and Product Performance

H7:The greater the intensity of innovation, the


more significant will be the performance of the
new product in the market.
The concept of Market Knowledge Competence was introduced by Li and Calantone (1998)
to cover the group of processes that generate and
integrate market knowledge. But the authors
made no attempt to verify reciprocal relations
among these constructs, to check if they make
up a broader conceptual framework. To test these
possibilities empirically, the following hypotheses
were formulated:
H8:The process of customer KM influences and
is influenced by technological KM.
H9:The process of competitor KM influences and
is influenced by customer KM.
H10:The process of technological KM influences
and is influenced by competitor KM.

Methodology
First of all, a literature review was carried out.
Some classic and seminal works on marketing
knowledge, market orientation, KM, innovation
and strategic marketing were analyzed (Treacy
and Wiersema, 1995), as well as a series of previous pieces of empirical research that preceded
this article. Based on the defined constructs, the
measurement items were obtained from previous
researches and the existing literature, focus groups
with managers and specialist panels. A pre-test
involving 46 respondents was made and analyzed.
An 11-point Likert-type scale was adopted, so that
they could be processed as continuous variables
and possibly achieved a better measurement.
The research constructs were generated by the
following procedures:

42

Customers KM
Operational definition: the items were obtained
from Li and Calantones (1998) research, Jaworski and Kohli (1993), Ehms and Lagen (2002),
Berztiss (2002), Choo (1998), focus groups and
specialist panels.
Competitor KM
The items were obtained from Li and Calantone
(1998), Jaworski and Kohli (1993), Ehms and
Lagen (2002), Choo (1998), focus groups and
specialist panel.
Technological KM
Operational definition: the items were obtained
initially from research made by Cooper (1984),
Davenport (1998), Nonaka and Takeuchi (1997),
Ehms and Lagen (2002), Clark and Wheelwright
(1995), Day (1999) and Ashok (1999)
Innovation of New Products
Operational definition: the items were obtained
from Hurley and Hult (1998), focus groups and
specialist panel.
Performance of New Product in the Market
Operational definition: the items were obtained
from Li and Calantone (1998), focus groups and
specialist panel.

data analysis
It was decided to carry out a survey using mail as
the principal mean of contacting the respondents.
The sample consisted of 1,870 medium and large
Brazilian industrial firms that are members of
FIEMG (Confederation of Industries of the State
of Minas Gerais, the 3rd largest state in Brazil).
Most of the industries sampled are in very competitive markets, as clothing, packing, furniture
and automotive industries.
The companies in the sample had more than
30 employees. This cross section was selected
because, in a pre-test, it was confirmed that the
marketing structure in small organizations does not
allow them to answer the questionnaire correctly.
The questionnaires were answered by marketing
managers in these companies. After making the

Market Knowledge Management, Innovation and Product Performance

Figure 4. Sample profile by industry

required calculations concerning sampling, it


was concluded that, there should be at least 258
observations for a 5% of error in a confidence
level of 95%. At the end of the survey, 387 valid
answers were obtained.
The operational part of the research began in
January 2008 and ended in May 2008. The types of
industries in the sample are exhibited in Figure 4:

construct Validity
The returned questionnaires were checked for
incomplete or blank data, since this is a very
common occurrence in self-administered questionnaires. After this, a check was carried out for
univariate and multivariate outliers. It was verified
that the Mardia statistic -LISREL (Jreskog and
Dag, 1998) output -, designated PK, based on
kurtosis and asymmetry functions, should have
a value smaller than 3, which, on the basis of
this practical criterion, would lead to acceptance
of the hypothesis which states that multivariate
normality was reached.
All the constructs presented Cronbachs Alpha
values in conformance with the acceptance strip,
that is, above or equal to 0.70. In order to examine the reliability more deeply, an analysis of the
composite reliability was made. It was observed

that the composite validity of the constructs was


above 0.5, which, according to Hair et al. (1998),
is appropriate. An exploratory factorial analysis
of the items by construct was carried out in order
to verify unidimensionality (Germain; Droge
and Daugherty, 1994). After the withdrawal of
some items, based on the researchers judgment,
compliance with the unidimensionality premise
was obtained.
To verify the convergent validity of the constructs, each construct was subjected to a factorial
confirmatory analysis, in order to observe the
significance of the weight of each item in their
respective constructs. Bagozzi, Yi and Phillips
(1991), as well as Im, Grover and Sharma (1998)
indicate the need for such a procedure.
The discriminant validity was obtained by
a procedure recommended by Bagozzi, Yi and
Phillips (1991). In the case of the sample, all the
constructs presented discriminant validity.

explanatory Phase
The authors opted for the process of direct estimation, using the co-variance matrix as an entrance
matrix (Hair et al., 1998). The chosen estimation
method for this research was GLS (Generalized
Least Squares), which, according to Hair et al.

43

Market Knowledge Management, Innovation and Product Performance

Table 1. Fit indexes of the research model


2 (Chi-Square)

DF1

2 / DF

RMSEA2

GFI3

AGFI4

PNFI5

NFI6

91.01

75

1.34

0.029

0.975

0.954

0.583

0.895

0.101

Notes:
1 DF (Degrees of Freedom)
2 RMSEA (Root Mean Square Error of Approximation)
3 GFI (Goodness of Fit Index)
4 AGFI (Adjusted Goodness of Fit Index)
5 PNFI (Parsimony Normed Fit Index)
6 NFI (Normed Fit Index)

Figure 5. Path indexes of the research model

(1998), is an appropriate method of estimation


when, taking into account the possible size of
the sample, the data is moderately non-normal.
The structural relationships for validation of
hypotheses and models were obtained through
the AMOS 4.0 program from SPSS. In a test of a
model, the objective is to verify relations between
KM processes (customer, competitor and technology), innovation and new product performance

44

in the market. The model fits well, as we can see


in Table 1:
The model is shown in Figure 5.
According to Table 2, the critical t value at the
5% level is superior to 1.96, showing that the
weights are statistically significant, except for the
path between competitor KM and new product
innovation.
The research model considered innovation as
a mediation construct between market KM and

Market Knowledge Management, Innovation and Product Performance

Table 2. Path analysis: non standardized weights and significance


Paths

Estimated values

Standard error

Statistic t

P Value

Competitor KM Innovation

0.105

0.065

1.619

>0.10

Customer KM Innovation

0.094

0.048

1.978

<0.05

Technology KM Innovation

0.294

0.049

5.981

<0.01

Customer KM Competitor KM

6.945

<0.01

Customer KM Technology KM

7.317

<0.01

CompetitorKM Technology KM

6.549

<0.01

Technology KM Product Performance

0.131

0.043

3.049

<0.01

Customer KM Product Performance

0.086

0.043

2.006

<0.05

Competitor KM Product Performance

0.259

0.065

3.964

<0.01

Innovation Product Performance

0.246

0.049

4.966

<0.01

Table 3. Evaluation of hypothetical relationships


Hypothesis

Hypothetical
relation

Results obtained

H1: Management of Customers Knowledge Innovation

Positive

Confirmed2

H2: Management of Customers Knowledge New Product Performance

Positive

Confirmed2

H3:Management of Competitors Knowledge Innovation

Positive

Not Confirmed3

H4: Management of Competitors Knowledge New Product Performance

Positive

Confirmed1

H5:Management of Technological Knowledge Innovation

Positive

Confirmed1

H6: Management of Technological Knowledge New Product Performance

Positive

Confirmed1

H7: Innovation New Product Performance

Positive

Confirmed1

H8: Management of Customers Knowledge Management of Technological Knowledge

Positive

Confirmed1

H9:Management of Customers Knowledge Management of Competitors Knowledge

Positive

Confirmed1

H10:Management of Competitors Knowledge Management of Technological Knowledge

Positive

Confirmed1

Notes:
1 Estimate is positive and significant (p < 0.01)
2 Estimate is positive and significant (p < 0.05)
3 Estimate is not significant (p > 0.05)

the performance of a new product in the market.


Innovation, as we might expect, had a strong
influence on performance, as well as on technological KM. The process of customer KM had
less influence on performance than on competitors
or technology an interesting result.
In the organizations sampled, new products
with representative success in the market were
generated by a stronger focus on competitors
(=0.31), innovation (=0.29) and technologi-

cal (=0.21) aspects, compared to customer KM


(=0.13). It seems that in this particular industrial
market, organizations that obtain more expressive
results establish their product strategies by applying a process that is based mainly on a careful
analysis of competitors actions and tactics.
An analysis of the influence of market KM
constructs in innovation revealed that innovation
came mainly from technological KM (=0,40) and
from customer KM (=0,12). It was ascertained

45

Market Knowledge Management, Innovation and Product Performance

that a focus on technology was the most important


source of innovation in the model analyzed.
Table 3 allows evaluation of the hypothetical
relationships proposed.

Main findingS
Market KM has been seen as an important area
of research from the point of view of managerial
efficiency. However, our current understanding of
that phenomenon is restricted, since market KM
in organizations is a complex area that presents
difficulties of conceptualization and measurement.
Menon and Rajan (1992) stated that organizations
have become more market oriented and, as a result
of that emphasis, the application of the marketing intelligence concepts, as well as the use of
information generated by research, has acquired
strong relevance.
The first aspect to be considered is that the three
processes of KM considered in this research are
elements that enhance the results of new products.
Such results are, as a whole, consistent with those
obtained by Li and Calantone (1998). However,
certain differences about those results have to be
considered. In the results of our research, the order
of importance of the three processes as antecedents
of performance was the following: competitor
knowledge ( = 0.31), technological knowledge
( = 0.21) and customer knowledge ( = 0.12).
According to this model, a greater improvement in the management of competitor knowledge
was the process that generated more results with
new products. This probably occurred because of
the process of product strategy planning, which
seemed to be essentially a comparative process
between competitors products ( = 0.31). Such
empirical verification raised questions about the
statement found in some marketing texts that the
customer is the main focus. Regarding this point,
it was noted that the process of creation of successful products (with actual results reflected in the
market) is a process that is much more based on

46

competing products (Hamel and Prahalad, 1995)


and on technology, than on actual knowledge of
customers wishes. From the Knowing Organization model perspective (Choo, 1998), it was
found that our sample of organizations is giving
priority to make sense of their competitors rather
than understanding customer needs.
The processes of KM had important bilateral
connections, demonstrating that they perhaps may
be considered to be a wider conceptual element.
Jaworski and Kohli (1993) observed in their
research that there is a low correlation between
market orientation and the results obtained. In this
research, and if we consider that the more intense
processes of market KM become, the greater the
degree of market orientation, one can infer that
these correlations may be more significant than
the ones obtained by the above-mentioned authors.
According to this research, it can be concluded
that the processes of market KM positively influenced the results of new products in the market
and that the degree of influence varied depending on the modality of knowledge (customers,
competitors and technology).
The process of customer KM had less influence
on performance than on competitors or technology,
an interesting result. In the organizations sampled,
new products with representative success in the
market were generated by a stronger focus on
competitors (=0.31), innovation (=0.29) and
technological (=0.21) aspects, compared to customer KM (=0.13). An analysis of the influence
of market KM constructs in innovation revealed
that innovation came mainly from technological
KM (=0.40) and from customer KM (=0.12).
It was ascertained that focus on technology was
the most important source of innovation in the
model analyzed.

concluSion
This study brings to light the importance of the
processes of market KM in obtaining innovation

Market Knowledge Management, Innovation and Product Performance

and performance in new product development (Olson et al., 1995). Li and Calantone (1998) pointed
out that organizations need to manage the three
processes of Marketing Knowledge (customers,
competitors and technology) in the process of
development of new products. Day and Wesley
(1988) argued that companies should manage
marketing knowledge and be market oriented in
a balanced way, since it is important for focus on
customers and competitors. However, the research
presented in this paper revealed that this might
not be the best approach.
The data obtained in this research suggested
investment in management of knowledge of competitors, innovation and management of technology knowledge, in this order. It was observed that
the focus on the customer or the orientation to
the customer, elements mentioned in significant
number of marketing books, is not the main driving factor of performance in new products in the
industries investigated. It seems that the focus on
the comparative advantage of products is more
important than focus on the customers desires,
because the purchase decision is a comparative
process of value. Thus the following questions
could be formulated: Is customer orientation a
profitable choice? What is the best balance among
competitors, customers and technology? Do
such factors vary according to industry, trade or
services? Some of these topics can be important
elements for future research opportunities.
On the other hand, innovative companies present processes of KM that focus more closely on
technology and customer knowledge. This fact
leads to the following possibility: the focus on
technological knowledge is the main factor in
innovation, and it should receive greater investment and attention than the others. This procedure
should be guided by customer knowledge, in the
manner proposed by Ashok (1999). However, at
present this does not happen.
The processes of market knowledge management also stood out as important generators
of results regarding new products. This fact is

connected to the strategic decisions made by the


organizations that have valid market information
obtained through the processes of market KM,
emphasizing the importance of managing them
in a structured, systematized and pragmatic way.
Market-oriented firms fundamentally are
learning organizations because through time
members of the firm share common experiences
that become shared process and market schemas
(Gebhardt et al., 2006). According to the authors,
theses schemas enable organization members to
communicate and collaborate effectively in the
process of gathering, disseminating, and reacting
to market intelligence. Finally, Gebhardt et al.
(2006) state that the importance of organizational
learning for market orientation extends beyond
simply encoding the lessons of history, because
organizations also develop the capacity to evolve.
The field of KM success is making gradual
progress. It is necessary to face the challenge of
both carrying out studies such as this one, which
focuses on specific areas of organization, such
as marketing, and also of identifying and investigating the links between KM and organizational
performance.

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51

Chapter 4

Does KM Governance
= KM Success?

Insights from a Global KM Survey


Suzanne Zyngier
La Trobe University, Australia

abStract
This chapter examines factors that contribute to KM success by differentiating between KM leadership
through management and through governance. We look at governance as a structural mechanism that
both embeds KM into organizational activity, and lifts it from a series of initiatives to a structured program of activities that are subject to authority, policy, risk management, financial fiduciary duty, and
evaluation. Using evidence from 214 respondents to a global internet based KM survey; we find that
having a recognized and defined authority for KM that is well-resourced leads to strategically aligned
benefits realized from investment in KM. We demonstrate that governance through assigned authority
strongly contributes to strategic KM success.

introduction
The implementation of knowledge management
(KM) programs continues to be contentious because it is frequently difficult to establish the return
on investment. KM practitioners and theoreticians
understand and undertake to create a sustainable
program of strategies to leverage knowledge to
fulfill organizational aims and objectives and to
realize benefits from them. However, many KM
strategies implementations fail to realize the
DOI: 10.4018/978-1-60566-709-6.ch004

expected benefits or the return on investment


sought by their organizations (Kulkarni, Ravindran, & Freeze, 2006). This in turn impacts on the
sustainability of those strategies (Zyngier, 2005).
In information-based economies, knowledge is
one of the key organizational resources and a
competitive differentiator (Spender, 1996). The
management of organizational knowledge is a
complex imperative that is taken up by forwardlooking strategic leadership. Therefore, we asked
does KM Governance contribute to KM success?
In answering this question we differentiate
between management and governance in look-

Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

Does KM Governance = KM Success?

ing at governance as a structural mechanism that


both embeds KM into organizational activity, and
lifts it from a series of initiatives to a structured
program of activities that are subject to authority,
policy, risk management, financial fiduciary duty,
and evaluation. These are delivered in a structured
manner in order to achieve the strategic aims and
objectives of the organization.
KM governance is defined as the exercise of
authority over strategies to manage organizational
knowledge for the realization of anticipated benefits (Weill & Ross, 2004). This chapter will present the facets of governance as authority, policy
development, measurement, risk management and
financial responsibility. We describe how these
activities are delegated and amplified into the
development and implementation of KM strategy.
Previous research into patterns of governance of
knowledge management has focused on individual
cases. This work presents a furtherance of this
discussion by presenting new global research by
web-based survey.
We report on the results of 214 respondents
to a global survey on KM governance data collected from mid-March to the end of May 2008.
Respondents came from 34 countries across every
continent indicating that KM is truly a widely
practiced business activity. The survey respondents identify the structures of KM governance
in their organizations, and the roles and tasks of
KM governance activities.
Against this background of clear KM governance, coupled with indicators such as increased
funding of KM and longevity of KM programs of
activity, and the perceived realization of the strategic benefits of KM, we show those structures that
can be deemed successful. Analysis and discussion leads the reader to understand when, where
and how through the structural support of KM
governance, success will more readily realized.
Conclusions about the utility of this statistical
data collection and analysis suggest that outputs
of research such as this as a continuum of mixed
methodology are valid and strengthen Informa-

52

tion Systems research. It concludes that leveraging knowledge through programs of activities
is a global phenomenon. KM governance as the
exercise of authority over the development and
implementation of strategies to manage organizational knowledge enables the long-term realization
of anticipated benefits therefore, KM governance
leads to KM success.
The sections are arranged as follows. The concept of KM success is introduced in the context
of the alignment of KM with business strategy to
support the aims and objectives of the organization.
We propose that this is clearly achieved through
the effective governance of KM. KM governance
activities are examined and contextualized. Following the reader is presented with the design and
the results of the survey and conclusions are drawn.

underStanding KM SucceSS
This examination of the literature focuses on understanding the realization of KM success as the
effective leveraging of organizational knowledge
resources to achieve the aim and objectives of the
organization. Leveraging knowledge resources
includes harnessing both tacit and explicit forms
as appropriate to the industry sector and the
specific needs of that organization. We suggest
that by making the alignment of KM strategy
and business strategy explicit through authorized
direction at executive level of the organization
it facilitates KM success. It does this in several
ways: it transparently permits policy development
to align KM, it allows management of risk to
KM strategy, it gives direct to the fiscal security
of KM activity, and finally it creates a frame for
the evaluation or measurement of KM outcomes
against the strategic aims and objectives initially
developed. This enables the review and revision
of policy and direction against any changes in
strategic intent within the organization. How then
can we understand indicators of KM success?

Does KM Governance = KM Success?

business Strategy and


KM alignment
The mission and values that underpin business
strategy correlate with the ontology of the organization. A business strategy is a formed plan that
puts together in a coherent form, the substantive
goals, policies and activity of the organization
into a logical and articulated series of statements
(McKay & Marshall, 2004). The association of
KM with business strategy and alignment is linked
to the mission and values of the organization (De
Tienne, Dyer, Hoopes, & Harris, 2004; Henderson
& Venkatraman, 1999; Zack, Mc Keen, & Singh,
2006). Measurement and evaluation support and
clarify alignment of the outcomes of business
strategy implementation with the KM strategy
development and implementation.
Mintzberg, Ahlstrand, & Lampel, (1998)
suggest that developing a plan requires us to
look ahead, yet commonly strategy is more of
an organizational pattern decided on the basis of
past behaviors. Therefore, a pattern or strategy
that is realized but was not devised or intended
can consequently be described as emergent
(Mintzberg, 1994). The term emergent implies
no control over the development of the strategy.
It would be unrealistic to expect to be able to
predict all of the consequences or outcomes of a
strategy. Some outcomes will be expected while
others are consequential on the human context
and both internal and external factors that impact
the organization.
Strategic leadership leverages all classes of
organizational assets: human, financial, physical,
IP, informational, technological and relationship
(Nonaka & Takeuchi, 1995; Schultze & Stabell,
2004; Spender, 1996). KM is understood as a broad
concept that addresses the full range of processes
by which the organization deploys knowledge.
These processes involve the acquisition, distribution and use of knowledge in the organization - the
processes include interpersonal, social-technical
and technical modes. Knowledge exists in both

explicit and tacit forms and therefore differing


strategies are required to leverage and deploy
it effectively (ActKM discussion forum, 2006;
Dalkir, 2005; Lavergne & Earl, 2006; Tanudjojo
& Braganza, 2005; Tiwana, 2002). There are a
broad variety of tools and techniques that are canvassed in the literature, discussed at conferences,
and on KM list-servs (Riege, 2005; Sun & Scott,
2005). These are implemented with various levels
of organizational utility and of user acceptance
(Foss, Husted, Michailova, & Pedersen, 2003;
Schroeder & Pauleen, 2007; Stehr, 2003; Wiig,
1997b, 1999).
A strategic outcome of the development and
implementation of a KM strategy should be the
creation of value to the organization. There are
multiple dimensions of value in leveraging organizational knowledge resources. Aligned to the
business strategy, they can be understood from
the multiple perspectives of finance, innovation,
business processes, customer value and human
value to organization. (Kelleher & Courtney,
2003; Smits & de Moor, 2004).

governance of Knowledge
Management
KM governance is still mentioned infrequently
in the extant literature (Jennex & Zyngier, 2008)
and within that spectrum, the roles and tasks of
KM governance were not fully explored until
first developed by Zyngier, Burstein, & McKay
(2004) then finally defined by Zyngier (2005). KM
governance demands purposeful consideration
of knowledge strategies in place in the long and
medium term. KM governance uses measurement
of the effectiveness and efficiency of all aspects
of KM as a tool to ensure that KM objectives and
benefits are realized.
A governance framework operates across key
domains: principles, infrastructure strategies,
architecture and investment, and prioritization.
Governance provides check and balance mechanisms that enable the decision-making processes

53

Does KM Governance = KM Success?

and resulting processes add valuable function in


delivering service to the enterprise. Emphasis on
strategy, risk-management, delivering financial
value and performance measurement indicates
the ongoing management of best practice. Applied to organizational IT, it is suggested that
at the heart of the governance responsibilities
of setting strategy, managing risks, delivering
value and measuring performance, are the stakeholders values, which drive the enterprise and IT
strategy (IT Governance Institute, 2001, p. 10).
This mechanism feeds back both the positive and
negative aspects of performance to moderate and
improve practice.
Governance of KM guides strategic thinking
about policies and strategies implemented - both in
the long term and in the medium term. KM strategies are therefore never static. Governance provides a mechanism for feedback, allowing for the
dynamic modification and development of existing
processes and practices. Through development of
policy, KM governance determines how decisions
are made and how solutions are developed for
resolving obstacles, strategic alignment of strategy
and corporate strategy, risk management, access to
knowledge resources and under what conditions,
quality maintenance. Similar to IT Governance
the development of policy to guide strategy, the
management of risks, the delivery of value and
measurement of performance, while reflecting the
stakeholders needs and values, drives the KM
strategy. (IT Governance Institute, 2001). How
this function is fulfilled can be measured in the
timeliness of service delivery and the satisfaction
levels of the internal and external stakeholders.
Linked to the strategic goals, the mission and
the values of the organization, then the KM strategy
must support the work and transfer of knowledge
in the organization. This should be reflected in the
policies that underpin KM strategy development
and implementation. It is the role of governance
to establish policies for this purpose. We conclude that authority, financial responsibility, risk

54

management, measurement and evaluation, and


benefits realization are all aspects of governance.
Governance therefore comprises the following elements to varying degrees according to the
scope defined by each organization: development
of policy to define KM for the organization;
transparency of terms of reference; authorization
of strategy; oversight of risk management; oversight of financial management and allocation of
resources; review and revision of policy; and the
prioritization of strategic knowledge needs. In the
next section of this chapter develop the attribute
of KM governance and strategic outcomes.

Authority
Authority is different to power. The exercise
of power has organizational costs and benefits.
ODell and Leavitt (2004) suggest that the exercise
of power may require trade offs against interpersonal relationships. The exercise of legitimated
power is expected within organizational context.
This is authority rather than power as authority is
provided by rank or position within an organization. The position of the individual is endowed
with power - that is the position has authority
regardless of the charisma or personal power of
the holder of that office (Weber, 2005). The exercise of authority may strengthen the authority
base from which it derives and serves. Individuals with authority are expected to exercise that
authority and may be viewed as negligent, lax or
inattentive to their responsibilities when they fail
to do so (Pfeffer, 2005).
KM governance formalizes decision-making
authority that exercises financial responsibility,
evaluation, measurement, and risk management
in service delivery. KM governance ensures that
these processes meet organizational needs and
expectations or to resolve problems arising by
setting the rules of the game (Braganza, Hackney,
& Tanudjojo, 2007, p. 12). The development of
KM policy enables the satisfaction of each of
these elements through the clear identification

Does KM Governance = KM Success?

the view of what the firm and its stakeholders


need and envision from KM that in turn gives a
context for the development and implementation
of KM strategies.

(Chua & Lam, 2005; De Long & Fahey, 2000;


Wiig, 2004; Zyngier, 2002)

Risk management

Organizations frequently cite financial constraints as an obstacle to the development of a


KM strategy (Chua & Lam 2005). KM activity
as with other IS investments is seen as a cost
centre or service activity. It is funded either by
cross-business-unit investments or from central
head office funds (Swart & Kinnie, 2003). Such
expenditure or internal investment is seen as
supporting cross-business-unit, inter-businessunit or intra-business-unit activity. Governance
processes seek accountability for expenditure on
KM strategy based on a rationale for the financial
allocation that is required (Van Grembergen, De
Haes, & Van Brempt, 2007; Weill & Ross, 2004).
The governing authority is informed and able
to effectively approve or reject a major financial
request, although smaller financial decisions are
often delegated to management at below governing entity level (Kaen, 1995). Measurement
activities support financial responsibilities in that
they provide the evaluation measures required for
effective ongoing financial responsibility. These
activities ensure that a KM strategy can also be
fiscally viable through its alignment with the policies and goals of the organization (Zyngier, 2007)

By engaging with and understanding the risks to


KM strategy development and implementation it
becomes possible to develop a means of risk resolution. Risk management is a proactive strategy of
analysis and anticipation of risks to an information
systems strategy before they arise (International
Standards Organization, 2006; Standards Australia, 2005). The resolution of such risks may require
organizational change management, the provision
of additional financial or infrastructural support,
or a realignment of the original strategy in light
of unforeseen or emergent activity within the
organization. Risk management requires regular
evaluation of the strategy and the organization
that it serves.
Governance processes manage the risks of KM
to acknowledge and challenge the cultural issues,
structural obstacles and other relevant issues as
they arise during the implementation and ongoing operation of the strategy. The management
of these risks assisting in their resolution and
strengthens strategies to manage knowledge within
the organization. The need for risk management
in KM was formally indicated in 2005 (Standards
Australia) with the need to identify assets, the risks
and controls associated with the implementation
of strategy. The literature suggests that obstacles
to the effective management of organizational
knowledge include a management culture in the
organization that hinders KM, with concomitant
change management issues. Additionally the
philosophy of knowledge management is often
understood inadequately in the organization and
conflicts of organizational priorities are problematic for the development and initiation of a KM
strategy. For many organizations, the development
of criterion for knowledge collection is difficult.

Financial Fiduciary Duty

Measurement and Evaluation


KM governance processes incorporate evaluation
and measurement in order to prove the value, to
progress and to develop existing practices. Evaluation looks at both successes of and obstacles to the
implementation of a KM strategy. Evaluation of
successes must take into account the contribution
made to the aims and objectives of the organization (Zyngier, 2007). Where the successes make a
contribution then they should be continued. Where
they do not make a contribution then consideration
should be given to their continuance.

55

Does KM Governance = KM Success?

There are a number of criteria used to establish


the return on investment for KM strategies. Simple
measures include staff retention or in improvement of product to market delivered on time, in
quantity and quality (Kelleher & Courtney, 2003;
Smits & de Moor, 2004) These include look at
human capital growth (Liebowitz & Suen, 2000),
intangible assets (Sveiby, 2001), the Balanced
Scorecard (Kaplan & Norton, 2001) examination
of the normative, operational and strategic goals
of the strategy to see if they are being met (Probst,
Raub, & Romhardt, 2000).

establishing KM Success
Deliberate strategies are usually articulated as a
plan. Mintzberg (1994) suggested that strategic
planning processes fail when they are not constructed to understand, internalize and synthesize,
that is to learn from the successes or failures of the
strategic process as it is implemented. It can be suggested that some approaches to KM are vulnerable
unless the strategy is conceived of as a learning
process. The step of articulating a suitable KM
strategy or series of programs for an organization
is only part of the challenge. Ensuring effective
implementation and ongoing development and
redevelopment are vital to the success of a KM
strategy that is capable of response and change.
Devising appropriate KM processes, structures,
policies or principles and mechanisms to ensure
sound decision making over time are required and
these are all indicative that knowledge management governance is required.
KM governance acts to support organizational
governance through transparent activity. It provides a mechanism for managing the identified
risks to knowledge assets in a planned and fiscally
responsible manner. Organizational governance
controls, directs and supports KM governance
through the establishment of the organizational
aims and objective of the business strategy. KM
governance should enable the strategic alignment
of KM strategy development and implementation

56

in the same way that corporate governance enables


strategic alignment of organizational activity
through policy creation.
There is some evidence of research that mentions the appropriateness of governance activity for
KM development and implementation (Foss, 2007;
Foss et al., 2003; Schroeder & Pauleen, 2005;
Wiig, 1997a, 1999). However, until 2004 there
was little indication of a link between theoretical
attributes of governance of KM in the roles and
tasks required of it, nor of the flow of authority
and communication within it until described and
defined by Zyngier (2005, 2007).
KM governance systematizes and schematizes
the following elements as follows (Zyngier, 2005,
2006; Zyngier, Burstein, & McKay, 2005, 2006):

KM governance body authorizes activity of


and is given evidence of outcomes by those
responsible for KM strategy development.
KM is implemented according to defined
and developed strategy. Outcomes of the
strategy are reported back via the KM
strategy development to the KM governance body for reflective action.
KM governance positively contributes to
the realization of strategic benefits from
managing organizational knowledge.

The approach to governance is supported by the


KM maturity models of Ehms & Langen (2002)
and Weerdmeester, Pocaterra, & Hefke (2003) that
describe the stages of maturity as initial, aware,
established, quantitatively managed and optimizing. Initial is similar to those who are curious
and exploring KM or are tentatively taking their
first steps in implementation. At this stage there
is little current level of knowledge, control and
no recognized connection between the success
of the organization and its knowledge resources.
The second stage of the maturity model is where
KM is repeated. There is a recognized connection
between the success of the organization and its
knowledge resources, with some pilot KM proj-

Does KM Governance = KM Success?

ects in place. The next stage in maturity is called


defined where there are KM activities in place, a
technical infrastructure and KM roles are defined
filled by staff. This equates to this researchs stage
that the organization has implemented several KM
initiatives. It is suggested that when KM is operating organization wide then it can be considered
managed with KM solutions manifest and standard
organization wide and that activities are secured
in the long term by organization-wide roles and
compatible socio-technical KM systems. (Ehms
& Langen, 2002, p. 3) in this situation KM measurement can be implemented meaningfully. The
final stage of maturity is described as optimizing
where the organization is able to adapt its KM
strategies to meet new requirements and to adapt
to changes in the organization or in the industry.
In the following sections we present the reader
with research methodology and then the survey
results that demonstrate the supportive impact of
KM governance on the development and implementation of knowledge management initiatives.

reSearcH deSign
This research aimed to investigate patterns of
governance and outcomes in strategies to leverage
organizational knowledge the phenomena of governance over KM. The research design describes
a questionnaire grounded in the theoretical KM
literature and that was adapted from previously
validated research surveys designed and used in
the European Union and was subsequently again
used twice in a longitudinal study of the understanding and uptake of KM in Australia (Ionescu,
Burstein, & Zyngier, 2006; Murray, 1998; Zyngier,
Burstein, & Rodriguez, 2003). Those areas of
the instrument adapted to include elements of
governance was informed by constructs derived
through recent related case study data collection
(Zyngier, 2006, 2008; Zyngier & Burstein, 2009).
This research was directed to those engaged in
KM activity in: public and private companies, and

government and semi government organizations.


It was conducted as an anonymous web-based
survey (survey questions appended). The data was
collected using nine online closed KM discussion
forums and list-servs and discussion forums based
in Europe, Canada, the USA, India, Australia, and
Malaysia. Distribution lists included members
from blue chip companies, SME, government
and not-for-profit institutions. Limitations of using this frame to obtain respondents can include
biased responses, the representativeness of population and possible low response rate. Specifically,
members of such discussion boards have a personal
interest in KM related concepts; therefore they
may answer differently to respondents who do not.
Due to the email method of subject recruitment
this sample cannot be said to be representative
of all organizations or of the opinion of all KM
practitioners and does not represent the population (Dillman, 2000). Sampling issues are the
same for internet and for paper based surveys
although with the internet it is more difficult to
verify. (Jansen et al., 2007) There is a legitimate
problem in the use of volunteers from the internet.
Non-response bias is countered by researcher in
that the estimate that the response rate from the 9
discussion groups gives a total population of 5500
members. However it must be strongly stressed
that the experience of the researchers also indicates
that there is very large overlap of memberships
between discussion groups. Many members email
addresses regularly appear in postings on up to
three groups on a weekly basis.
This evidence suggests that the overlap may
be in the order of up to 25% with a total sample
frame being closer to 4125. This being the case
then the response of 214 individuals may equate to
5.3%. This is acknowledged as a low response rate
however the average response rate for an unsolicited survey with no personalization of address and
no follow up is 5%. It is also acknowledged that
due to the email method of subject recruitment,
this sample cannot claim to be representative of
all organizations that have KM programs or of the

57

Does KM Governance = KM Success?

opinion of all KM practitioners (Dillman, 2000).


However, the number of responses is considered
large enough and sufficiently diverse to be statistically indicative (Dillman, 2000). Therefore the
response and the results are cautiously regarded as
valid through comparison with similar validated
surveys. The survey data revealed broad openness
of opinions. This openness and in some cases
blunt honesty - provides indicative trend data in
an understanding of the current global approach
to KM. It can be reasonably argued that this
population sample is a microcosm of the [KM]
population (Bryman & Bell., 2007, p. 731) and
that these are therefore, both representative of
the selected population, and accurate informants.
The survey was prefaced by an explanatory
cover letter. The survey instrument comprised
22 multiple choice questions and three questions
that required a text based response. Of these 13
multiple choice questions collect organizational
data, and nine multiple choice questions collect demographic data. The sections comprised
knowledge management definitions, the tools and
techniques in the management of knowledge as
an asset, cultural aspects of knowledge management, knowledge use in the future and obstacles
to its management, structural mechanisms that
support the development and implementation
of KM strategies and the final section sought
both organizational and individual demographic
information.
The respondents were required in some questions to tick appropriate responses using attitude
questions in the questionnaire. This allowed
ranking of agreement to a statement relative to
positive and negative endpoints of a five- point
Likert scale. The questionnaire was timed to take
approximately 14 minutes to complete. The results
have been analyzed using the statistical software
package SPSS 16.0 for Windows and employs
descriptive and inferential statistics. Analysis
takes account of the possibility of the acquiescent
response set where the respondent may develop a
pattern of agreeing with all the items. Participants

58

Table 1. Defining KM
Definition

Response
rate

Business focused creation dissemination & utilization of knowledge to fulfill org. objectives

49.5%

The capability to create store retrieve and to apply knowledge

32.8%

The use of IT to capture data and information to


manage knowledge

11.3%

Intellectual assets documents and information


bases

6.4%

were offered the opportunity to be informed of


the aggregate results of this research.

SurVeY reSultS: KM
goVernance and
Strategic ManageMent
Respondents came from 34 countries across every
continent indicating that KM is truly a widely
practiced organizational activity. The first section
of the survey deals with the respondents definition of KM and issues relating to KM strategies
contributing to the achievement of business goals.
The responses as shown in Table 1, defining an
organizations understanding of KM indicated
a strong trend of understanding KM as a business focused approach that comprises the whole
collection of processes that govern the creation,
dissemination and utilization of knowledge to
fulfill organizational objectives.
This definition clearly separates respondents
who see KM as being the capability to from those
who have a more strategic approach to the utility
of organizational KM. The other options offered
were: about intellectual assets, and as a technological concept. Only four percent of respondents
chose not to define that understanding.
The research then sought to establish from
the data, which role has authority over the KM
strategy. This survey instrument suggested that
these might be a CEO or Managing Director, a

Does KM Governance = KM Success?

Figure 1. Authority for KM

Chief Knowledge Officer or IP Officer or Chief


Learning Officer, a Chief Information Officer, a
stakeholder group, a Director of HR, a Consultant,
or perhaps no nominated person. The inclusion
of a stakeholder group was new among these
variables but was substantially represented in
the data. The concept of the stakeholder theory
embraces notion that the needs of the spectrum
of interests spanning the organizations owners
or shareholders (embodied in the strategic aims
of the organization), the spectrum of employees
should all be acknowledged in organizational
decision making (Van den Berghe & De Ridder,
1999). Added to this is the need to engage with
staff who both deliver elements of a KM strategy,
and with those who are expected to participate in
the sharing of knowledge. This may lead to better
buy-in from both sides in delivery and in activity
of a KM program of strategies.
Case study and anecdotal evidence points to
the appointment of a CKO, a CLO or a Chief of
IP, but that these roles are often misunderstood,
under resourced bound to fail (Desouza & Raider,
2006; Lakshman, 2007). As can be seen in Figure
1, we asked about authority for KM rather than

leadership of KM, it is found that authority most


often lies at the executive level of the organization.
Evaluating the data to establish the responsibilities of that authority role is presented in Figure
2. The responsibilities suggested were modeled
on constructs established through case studies,
with a text based field available to the survey
respondents to make additional comment. The
revealed roles from Figure 1 above all involved
are setting knowledge management priorities; the
development of policy to strategically align and
guide strategy; evaluation or measurement of
performance; review and revision of policy in the
context of performance; oversight of risk management; and financial responsibility for investment
in KM.
As can be observed across each role the least
important role is the oversight of risk management
while both the prioritizing of strategic knowledge
needs and authorization of strategy are of greatest
but not equal importance in each case. There is
however clear variance between the responsibilities. For the CEO and for the stakeholder group
the prioritization of strategic knowledge needs is
reported more highly than KM policy develop-

59

Does KM Governance = KM Success?

Figure 2. Governance roles and responsibilities

ment, while the obverse is true for the CKO and


the CIO that prioritization of knowledge needs is
secondary.
Drawing back to the literature, we can confirm
that all authority roles demonstrate KM responsibilities revealed hitherto only in case study
analysis, and are affirmed here by this global
survey. These responsibilities are proportionally
represented although there is variance between the
roles in the extent of responsibility for each facet
of the governance spectrum of activity.
We sought to investigate the variables that
might influence the distribution of roles. Those
investigated were size, distribution and constitution of the organization cross-tabulated with
the named roles of governance. In Figure 3 an
unambiguous consistent pattern of governance
authority emerged in relation to the size of the
organization. The large organizations with more
than 1000 employees and the small organizations
with fewer than 50 employees stood out in their

60

selection of a CKO or the CEO as the role with


authority for KM. Stakeholder groups and the CIO
were also nominated albeit to a lesser degree by
large organizations. Small to medium size enterprises employing between 100 and 1000 people
showed a more even spread of authority for KM.
It is noteworthy that only very few very large
or very few small organizations retained consultants and endowed them with authority roles. In
small organizations, this might indicate an overall lack of capacity to employ new staff with
appropriate skill sets or the lack of time or skills
for existing staff. Of the large organizations, the
employment of consultants may indicate an overall lack of capacity to understand the skill sets
required for KM that could be met by internal
staff resources, or a lack of time or skills within
existing staff structures. It may also indicate in
both very large and very small organizations, a
culture and preference for the engagement of
consultants.

Does KM Governance = KM Success?

Figure 3. Cross tabulation of size of organization and authority for KM

Looking in more detail at the two predominant


responsibilities, we suggest that both the prioritization of strategic knowledge needs and KM
policy development relate clearly to the strategic
alignment of KM with organizational aims and
objectives. We know from the data, that of the
respondents 64.7% agree or strongly agree that
their organizations KM program of strategies
is designed specifically to contribute to achieving business goals. In Figure 4 it is evident that
strategic alignment does not equal the successful
realization of benefits, however the active pursuit
of this goal does indicate a tendency to reap KM
rewards. What becomes pertinent is to establish
the other indicators of success for those organizations. It is not enough to say that benefits had been
realized and that all other organizations need to
do is to emulate that. In order to learn from other
cases, it is also important to examine other likely
variables that will further illuminate the road to
KM success.

Because the volatility of the environment


moderates the strategic value that can be achieved.
The capacity of the organization to manage
knowledge resources has a consequent impact on
its performance (Zack & Street, 2007). Examination of the distribution and utilization of various
KM tools and techniques can only be of use in
the context of the size, distribution and perhaps
the industry sector in which each organization
can be found. Responses by country may merely
reflect the availability of the range of tools and
techniques.
Now seeking to define where realization of
benefits is derived this research returns to structural elements in KM. These are taken as being
the maturity of the KM strategy, and the issue of
KM governance.
We observe results describing the instance of
the maturity of the KM strategy and any relationship realization of strategic benefits. It is evident in
Figure 4 below that there is a clear trend towards
the realization of strategic benefits when KM is

61

Does KM Governance = KM Success?

Figure 4. Maturity of KM strategy development and implementation

escalated through the stages of maturity beyond


being established through the implementation of
several initiatives to operating organization wide
and is ultimately optimized through inclusion in
strategic planning. Our trend line moves from the
realization of whatever benefits can be achieved
through exploration and initial implementations,
to a reported success rate of 92% when organizations express their KM as mature and included in
their strategic planning.
In Figure 5 below a similar strong trend is seen
in cross tabulation of governance authorities and
the realization of strategic benefits. It is clear that
a greater number of organizations realize strategic
benefits where their KM strategy is governed at
the most senior executive level by a committed
and interested CEO or Managing Director, by a
CKO or similar or by a stakeholder group.
From simple examination of these two figures
we might well conclude that in order to realize
strategic benefits of a KM strategy development
and implementation, an organization ought to
ensure that their CEO has ultimate authority in

62

governing their KM. that this would be optimized


at the mature stage of KM and that KM is included in their organizational strategic planning.
However a simple interpretation of these results
is not enough. The following figure requires some
degree of serious contemplation. The results shown
in Figure 6 are a three layer cross tabulation of:

Realization of strategic benefits


Governance authorities and
KM Maturity

The results show organizations with mature


KM programs of strategies that have realized
strategic benefits from the development and
implementation of those strategies. The reader
should note that as this represents a section of the
survey population the absolute numbers in each
category are therefore limited. However these are
indeed representations of 64 success stories. The
results can effectively be interpreted as indicative
factors in establishing for success at the various
stages of KM maturity.

Does KM Governance = KM Success?

Figure 5. Governance authorities and the realization of strategic benefits

Figure 6. Governance authorities, KM maturity and the realization of strategic benefits

63

Does KM Governance = KM Success?

Where the organization is just curious and


exploring KM, those organizations that realize
any benefits are those where KM is authorized
by a CEO; a stakeholder group; or a CIO. Of the
organizations implementing first KM initiatives
or have implemented at least one KM initiative,
then we see the same degree of involvement from
CEOs but the sudden and strong appearance of
the CKOs appointment and involvement. We also
see the involvement of some KM consultants and
the HR department.
Those organizations that have implemented
several KM initiatives again show the involvement of a CEO in some organizations however,
both the CKO and the CIO are prominent in their
involvement. We see a continued involvement of
stakeholder groups and of external consultants.
Notably there is no presence of the HR entity.
Where KM is operating organization wide
CEO or Managing Director is again prominent in
their involvement, while the CKO has an equal
level of involvement with the stakeholder group.
At the same time, we see the reappearance of the
HR entity together with the CIO and consultants.
Finally we examine those organizations where
the development and implementation of KM is
considered mature where KM is included in
strategic planning. In this scenario, it is the CKO
who is most important. The CEO or the Managing
Director are still strongly represented. The CIO
is once again prominent while the Stakeholder
group maintains a consistent presence. There is
no evidence of consultants or the HR entity in
mature KM implementation.
We ask the reader to return to Figure 2 that
examines the distribution of KM governance
responsibilities, the reader can now draw out
comparisons between their own organization
and those successful KM organizations shown
here. They can look at the maturity of their KM
implementation, the involvement of staff, and
the leadership and governance responsibilities:
the development of KM policy to guide activity,
the prioritization of KM needs, measurement

64

and evaluation, financial responsibility and the


oversight of risk management for the KM strategy.

concluSion and
future reSearcH
This research confirms that the management of
knowledge is considered a key organizational
resource by many organizations across the globe.
Further it point clearly to indicators that as the
significance and consequential positive impact
of KM becomes apparent, so too do the seniority
of those with responsibility for KM. A majority
of organizations resource their KM endeavor
with senior executive staffs organizational time
and resources. It is yet to be established which is
the cause and which is the effect in this scenario.
Organizations invest considerable resources to
support the growth and sustainability of KM. The
greater the maturity of the KM program and levels
of investment in that, the greater the likelihood
that benefits will be actualized.
KM maturity is represented in six stages likened
to the KM maturity models of Ehms & Langen
(2002) and Weerdmeester, Pocaterra, & Hefke
(2003): just curious and exploring; implementing first KM initiatives; have implemented at
least one KM initiative; have implemented
several KM initiatives; KM is operating organisation wide; and that we include management of
knowledge in our strategic planning. This research
extends those models to include the element of
strategic planning where KM is both derived from
and is embedded into organizational strategy. It
must also be said that such strategic planning can
only be successful where it is made sustainable
by the investment of resources in such growth.
We have presented the roles and the responsibilities of 214 organizations, surveyed globally
from March 2008 to the end of June 2008. From
these we have drawn data from 64 success stories
for interpretation, showing indicative factors in establishing leadership that can be cross-referenced

Does KM Governance = KM Success?

to governance responsibilities for success in the


stages of maturity in KM implementations.
Governance authority is qualitatively different
from power endowed through organizational rank.
It is clearly the centre of the KM decision-making
authority, an executive framework to deliver the
expected benefits of KM in a controlled manner. It
operates through the establishment of checks and
balances to strategically align activity, expressed
as policy with the oversight of financial control,
evaluation and risk. We have clearly confirmed
that all authority roles proportionally demonstrate
responsibilities that were hitherto only revealed
in case study analysis, and are confirmed through
this global survey population.
We find that recognized and defined authority
for KM leads to strategically aligned successful outcomes from investment in KM. We have
shown that governance through assigned authority
strongly contributes to successful management
of organizational knowledge to support strategic organizational management. This research
presents clear-cut and explicit findings of this
research. Future research will raise expanded issues as both text-based and other statistical data
are further examined.

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68

KeY terMS and definitionS


Authority: An established power to enforce
moral or legal decisions. Organizational authority
is accountable for its actions. Authority is a right to
demand and instruct subordinates. Authority may
also be delegated or be derived from delegated
control. The organization may mandate power to
a role or position a group or individual in authority, or power may be assigned or sanctioned by
consensus.
Evaluation: The assessment of the effectiveness of service delivery and the identification of
obstacles or barriers to service delivery. Some
means of evaluation include understanding the
perceptions of improvement in the organization
in the manner in which it formalizes knowledge
processes, knowledge structures and underlying
systems. These in turn will affect operations,
products or services delivered. Another means of
evaluation of the effectiveness of a KM strategy
is through establishing increased awareness and
participation in that strategy.
Governance: A process that is a framework
of authority to ensure delivery of anticipated or
predicted benefits of a service or process. The
operationalization of the particular organizational
strategy and is therefore executed in an authorized
and regulated manner. Governance act to manage
risk, evaluate and review strategic goal and objectives and exercise fiscal accountability to ensure
the return on investment of those strategies.
Measurement: Substantially a quantitative
tool. It may rely on direct comparison of performance before and subsequent to the initiation and
establishment of a KM strategy. The organization
may choose to measure of its performance in market competitiveness and acceptance, it may look
at the contribution of the KM strategy to financial
benefits and viability. It can also measure contributions to and the growth in the volume of explicit
knowledge content stored and used by staff. Some
knowledge managers may regard the increase in
the resources attached to the project as a measure

Does KM Governance = KM Success?

of the acceptance and hence the understanding of


the value of KM to their organization.
Return on Investment (ROI): Commonly
used as an accounting term to indicate how
well an organization has used its investment in
resources. In a knowledge management context,
ROI describes the return on both the human and
financial capital invested in that strategy. Some
measures may include sustainable growth, calculable efficiencies in product development cycles;
improved decision-making; better ability initiate

and integrate new employees; lower rates of staff


turnover reflecting improved employee morale;
better ability to retain customers reflecting trust
in employees expertise
Risk Management: A tactic to minimize
the susceptibility of the KM strategy to risk and
subsequent failure or ineffectiveness. Risk must
be analyzed to assess the potential exposure to
the chance of human or infrastructural barriers.
Risk may also threaten operational or financial
elements of the strategy.

69

Does KM Governance = KM Success?

aPPendix a: SurVeY queStionS


1.

2.

3.
4.
5.
6.
7.
8.

70

There are a number of definitions of knowledge management listed below. Please indicate the one
that most closely reflects your organizations interpretation.

A technological concept - the use of information technology to capture data and information
in order to manage knowledge

A business focused approach - the collection of processes that govern the creation, dissemination, and utilisation of knowledge to fulfil organisational objectives

About intellectual assets - taking the form of documents and information bases

The capability to create, store, retrieve and to apply knowledge


Select the reason/s that knowledge is important to your business

Gaining competitive advantage

Growing revenue

Growing profits

Improving market share

Instigating change

Identifying new markets

Developing new product/services

Improving efficiency

Improving effectiveness

Other (please specify)


What is your organizations current stage in KM?
How long has your organization been involved with formal strategies to manage knowledge?
The organizations KM program of strategies is specifically designed to contribute to achieving
business goals
Since 2003 your organizations budget for knowledge and learning activities has proportionately:
Grown; Remained about the same; Dont know
In the last 5 years that the number of knowledge workers in your organization has: Grown; Remained
about the same; Dont know
Please indicate all the KM techniques used in your organization:

Facilitated networking

Social network analysis

Peer to peer knowledge sharing

Communities of Practice face to face and virtual

Best practice replication

Organisational learning programs

Innovation support

Strategies to protect Intellectual Property

Strategic information management

Storytelling

After action review

Knowledge brokers

Narrative

Does KM Governance = KM Success?

9.

10.

11.
12.

13.

Please indicate all the KM tools used in your organization:

Video-conferencing

Groupware (e.g. Lotus Notes)

Online forums or list-serv

Intranet

Portal

Expert systems

Search and retrieval agents

Data warehousing & Data mining

Document repositories

Document management systems

Instant messaging

Wikis

Blogs
Who has authority for the KM strategy?

CEO / Managing Director

Chief Knowledge / IP / Learning Officer

Chief Information Officer

A stakeholder group

Director of HR

Consultant

No-one
Is there a formal terms of reference or position description for this authority
What does the authority cover?

KM Policy development

Developing terms of reference

Authorizing strategy

Oversight of risk management

Oversight of financial management and allocation of resources

Review and revision of policy

Prioritization of strategic knowledge needs


Who is responsible for planning and development of KM strategy?

CEO / Managing Director

Chief Knowledge Officer

Chief Learning Officer

Chief Information Officer

Director of HR

A department/function

Consultant

Informal cross-functional team

Formal cross-functional team

No formal role exists

71

Does KM Governance = KM Success?

14. What is involved in KM strategy development?

Build ways to leverage explicit knowledge

Build ways to leverage tacit knowledge

Map/Audit knowledge resources

Identify and or locate knowledge and information

Selection of KM techniques

Selection of KM tools

Measure or evaluate effectiveness of KM

Financial management

Analyze and remedy risks to KM strategies

Benchmark best practices


15. Who is responsible for the implementation of KM strategy?

CEO / Managing Director

Chief Knowledge Officer

Chief Learning Officer

Chief Information Officer

Director of HR

A department/function

Consultant

Informal cross-functional team

Formal cross-functional team

No formal role exists


16. What is involved in KM strategy implementation?

Collect or gather knowledge and information

Organise knowledge

Implement learning strategies

Broker or distribute knowledge

Facilitate Communities of Practice

Roll out and implement KM tools

Best practice replication

Facilitate peer to peer knowledge sharing

Mentoring, training, coaching

Measure or evaluate effectiveness of KM


17. Is there a relationship between Corporate Governance and KM?
18. Reporting relationships please indicate role that applies

Those with authority for KM report to:

Those who are responsible for development of KM strategy report to:

Those who are responsible for implementation of KM strategy report to


19. Has the development and implementation of your KM strategy realized strategic benefits?
20. Please describe any contextual issues or obstacles you feel are fundamental to moving knowledge
management forward in your organization.
21. Background Information: What is your role? What industry sector is your organization in?
22. Is your organization: Listed on a stock exchange; privately owned; Government sector; Semi
Government sector; Not-for Profit organization

72

Does KM Governance = KM Success?

23. How many employees in your organization?


24. How many locations does your organization have?
25. Employment: How long have you worked in your organization? How long have you been in your
current position?
26. What is your highest level of education?
27. What is your age group?

73

74

Chapter 5

An Evaluation of Factors
that Influence the Success
of Knowledge Management
Practices in US Federal Agencies
Elsa Rhoads
The George Washington University, Institute of Knowledge & Innovation, USA
Kevin J. OSullivan
New York Institute of Technology, USA
Michael Stankosky
The George Washington University, USA

abStract
This chapter investigates the status of knowledge management practices implemented across federal
agencies of the U.S. government. It analyzes the extent to which this status is influenced by the size of
the agency, whether or not the agency type is a Cabinet-level Department or Independent Agency, the
longevity of KM Practices implemented in the agency, whether or not the agency has adopted a written
KM policy or strategy, and whether the primary responsibility for KM Practices in the agency is directed
by a CKO or KM unit versus other functional locations in the agency. The research also tests for possible KM practitioner bias, since the survey was directed to members of the Knowledge Management
Working Group of the Federal CIO Council and KM practitioners in federal agencies.

introduction
The implementation of knowledge management
practices has been underway in both the public
and private sectors for many years. For the federal
government this transition was well underway

prior to the devastating events of September 11th,


2001 (9/11). However those events increased the
awareness of the value and importance of the
governments stewardship of its knowledge. In
fact, the 9/11 terrorist attack on the World Trade
Center in New York City is considered by many
to have been a wake-up call for federal agencies

DOI: 10.4018/978-1-60566-709-6.ch005

Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

to make both policy and process changes in order


to prevent future attacks.
Knowledge management programs concentrate on managing and distributing what the
government knows within and between agencies
for the purpose of taking collaborative action. The
basic tenet of knowledge management is that the
right knowledge needs to be made available to
the right people at the right time for the purpose
of taking concerted action.
The most important role of the federal government is unarguably to protect its citizens from
harm, and specifically from terrorist threats. As
a result of 9/11, President George W. Bush, upon
a recommendation of the 9/11 Commission, (National Commission on Terrorist Attacks Upon the
United States, created in November 2002) began
to rectify the gap in sharing knowledge and coordinating action by creating the Department of
Homeland Security (DHS). Twenty-two different
agencies with a total of 180,000 employees were
reorganized into a single agency for the purpose of
preventing terrorist attacks and protecting citizens
and infrastructure from threats and hazards. The
intentional sharing of knowledge on the part of
federal agencies is the new paradigm, albeit one
in transition. The major objective is to ensure that
the government knows what it needs to know,
when it needs to know it.
Deployment of knowledge management programs in U.S. federal agencies has been hampered
by two distinct conditions:
1.

2.

Long-established hierarchical commandand-control management styles and bureaucratic organizational structures make it
challenging for agencies to share knowledge
through either intra-agency collaboration,
and much less through cross-agency or
inter-agency collaboration.
Agency Information Technology (IT)
systems are a mixture of legacy systems
cobbled together with newer systems and
technologies, making interoperability a

technically difficult impediment both within


and between different agencies.
The management of the governments knowledge is also made difficult by the vast amount
of data and information contained in its repositories. In addition, the governments knowledge
is comprised of the working knowledge in the
minds of approximately 1,800,000 federal employees (OPM Fedscope, 2004) To manage this
bewildering resource of both explicit and tacit
knowledge and harness its capabilities is enormously demanding. Much of the knowledge in
government organizations, and certainly within
a constituency base, is tacit in nature, that is,
knowledge that cannot be easily articulated and
thus exists in peoples hands and minds, and only
manifests itself through their actions. (Stenmark,
2001) (Koh, Ryan & Prybutok, 2005)
A further problem is that the management of
knowledge can be executed in many forms, but
it is most useful to agencies when these forms
are developed to fit specific agency objectives.
This immediate utility is what gives knowledge
its value to each agency. However, these unique
uses and designs are what make it difficult to share
knowledge across agencies. Much research has
been pursued in the area of knowledge management, in which knowledge management initiatives
were internally focused, and principally aimed
at collaboration and knowledge sharing among
employees (Almashari, Zairi & Alathari, 2002),
(Henderson & Venkatraman, 1993) (Lai & Chu,
2003), (Liebowitz, 2003-2004) & (Koh, Ryan &
Prybutok, 2005)
Unfortunately, there has been mixed comprehensive research into the value proposition
of applying knowledge management practices
to achieve improvements in productivity either
within a single federal agency, or through the
transfer of knowledge between agencies to serve
common customers.
The focus of this chapter and our research has
been to answer the following question:

75

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

What factors influence the success of knowledge


management practices within the U.S. federal
government?
To answer this question, a survey of KM
practitioners in federal agencies, members of
the Knowledge Management Working Group
(KM WG) of the Federal CIO Council, (Chief
Information Officers), was conducted in 2005.
The current website of the Federal Knowledge
Management Working Group is located at http://
km.gov. The survey identified the status of knowledge management programs in federal agencies
and examined the extent to which this status was
influenced by the size of the agency, whether or
not the agency type was a Cabinet-level Department or Independent Agency, the longevity of
established KM Practices in the agency, whether
or not the agency had adopted an effective KM
policy or strategy, and whether the primary responsibility for KM Practices was directed by a
CKO or KM unit versus another type of functional
unit in the agency.
The question of the success of KM Practices is answered by the fact that we now have
benchmark data on the KM Practices established
in individual U.S. federal agencies, resulting
from credible sources from the responses of the
KM practitioners in these agencies themselves.
This survey has obtained the first baseline data
on this subject.

reSearcH bacKground
One of the most inhibiting and intransigent
barriers contributing to the lack of knowledge
transfer within and across federal agencies is the
lingering presence and influence of the historical
culture of organizational bureaucracy that is built
into federal organizations. It is a hierarchical approach to management, more appropriate for the
Industrial Age, in contrast to the practical and
intentional establishment of collaborative working

76

relationships between employees from different


operational entities more suitable to the Knowledge Age of the twenty-first century. Employees
must be prepared to work across the independent
silos of agency operations to bring their collective
knowledge to bear on the most demanding issues
facing the government, in times of normalcy as
well as in emergencies.
In many European countries, the central government establishes knowledge management planning and implementation for the whole country
through a central administration, and this acts as
an effective mandate for knowledge management
within and between governmental bodies in the
country. Many of these countries are members
of the Organization for Economic Cooperation
and Development (OECD). The OECD promotes
knowledge management, and for that reason a
separate discussion of the OECDs role is included
in this chapter.
In the United States, there is no comparable
centrally administered mandate for the adoption of
knowledge management programs in U.S. federal
agencies. The Office of Management and Budget (OMB) reporting to the President, mandates
agency commitment to adopt an E-Government
approach to provide electronic services to the
U.S. public, in response to the Presidents Management Agenda (PMA) adopted in 2002. The
PMA contains the principles for the Presidents
vision for government reform: to citizen-centered,
not bureaucracy-centered, results-oriented and
market-based agency organizations. There is no
concomitant mandate for the intentional transfer
of knowledge through the implementation of
knowledge management programs within and
between agencies.
The General Accountability Office (GAO),
an independent non-partisan agency reporting to
Congressional policy-makers and the public under
the leadership of the U.S. Comptroller General
(who holds the position for a period of 15 years)
with the authority to improve the performance

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

and ensure the accountability of federal government programs.


In 1998, David M. Walker was appointed
Comptroller General by President William J.
Clinton. At the latter part of his career at the GAO,
his work led him to conduct a series of wake-up
tours around the country to warn about the worsening fiscal condition of the federal government.
In March 2008 he joined the Peter G. Peterson
Foundation in New York as President and CEO.
He recently shared his knowledge in a new book
titled Comeback America: Turning the Country
Around and Restoring Fiscal Responsibility.
While the GAO promotes knowledge management, and embraces it internally, it does not
mandate knowledge management. However, the
specific use of knowledge management for its
transformational effect on organizations has received longstanding support (GAO, 2004). One
of the stated goals of the GAOs Strategic Plan
is to transform the federal governments role and
how it does business to meet twenty-first century
challenges. The GAO considers transformation as
the key to achieving a new model of management
for government organizations.
In 2005, the GAO designated a new high
risk watch area for federal agencies that of
establishing appropriate and effective information
sharing mechanisms, citing the need for securing
the homeland in a government-wide effort involving multiple federal agencies. (GAO, 2005).
In December 2005, the 9/11 Commission
remonstrated that The failure to share information among and within agencies cost us dearly on
September 11th, and concluded No single step
is more important to strengthen our intelligence
than to improve information sharing. (9/11 Commission Report Card, 2005).
Public Sector Governance: Traditionally,
public administrations are bureaucratic organizations: an operational definition that gives a better
understanding of the difficulties of bringing about
change (OECD, 2000). The office organization is
a collective order, a legitimate domination based

on a set of procedures, a professional organization


based on process. The production of services in a
bureaucratic organization follows the concepts of
specialization and sequencing of tasks. The advantage to employees for this segmented, bureaucratic
work style is that there was no requirement for
employees to collaborate with others (Dupuy,
OECD, 2000). From the other side of the equation, to receive services, the public had no choice
but to follow the sequential steps imposed by the
organizations operational procedures. This is the
antithesis of todays customer-service orientation
between the government as provider and the public
as customer.
Sistare (2004) describes the concept of achieving government transformation and reorganization
for the twenty-first century through means of a
virtual reorganization. This has become increasingly possible, due to the growth of the Internet.
There are four possible paths to achieve the
virtual reorganization of federal agencies in lieu
of a physical reorganization: virtual reorganization through e-Government (firstgov.gov); virtual
reorganization through coordinating councils
(Council of Chief Information Officers); reorganization by commission (the 9/11 Commission);
and reorganization via legislative authorization
(the forming of DHS). (Sistare, 2004).
An effective implementation of knowledge
management to achieve electronic government
requires that knowledge be managed horizontally
across agencies. Citizens are not cognizant about
where or how the government information they
require is created, or whether the information they
seek needs to be aggregated by federal agencies to
provide the ultimate service. To effectively meet
these objectives requires that knowledge be integrated between independent segments of common
service functions across government. Even though
the federal government is organized vertically,
with each department and agency serving the
public directly, much of what federal agencies do
to effectively distribute what it knows to improve
public services is achieved by sharing knowledge

77

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

through horizontal partnerships. Government


agencies are vertical bureaucracies (federal, state
and local) that are inherently knowledge-intensive
(Barquin, Bennet, & Remez, 2001). Knowledge
management requires leveraging the collective
knowledge of agencies to fulfill the mission of
the overall federal enterprise (Barquin, Bennet,
& Remez, 2001).
Knowledge Management Practices and the
OECD: Headquartered in Paris, the Organization of Economic Cooperation and Development
(OECD) provides a forum where the governments
of 30 industrialized countries, with democratic
governments, work together to solve the common
economic, social and governance challenges of
the member countries. Knowledge management
forms the central core of OECD focus.
In January 2002, the OECD launched the first
international survey of knowledge management
practices for ministries/departments or agencies of
central government in OECD member countries. A
comparison of seven functional sectors of central
governments was obtained through a survey of 20
participating members. These functions were the
ministries of Economy, Trade and Industry, Education, Finance/Budget, Foreign Affairs, Health/
Social Affairs, Home Affairs/Interior, and State
Reform/Civil Service/Public Administration. The
United States, a member of the OECD, submitted
responses to the survey in all except the Finance/
Budget sector.
The broad conclusions of the OECD KM
Practices Survey were that within the central
government in OECD countries, activities are
knowledge-intensive, staff is highly educated, a
critical mass of knowledge exists in these public
organizations, and central governments must
have superior mechanisms with which to share
knowledge across government organizations.
The OECD survey was designed to review the
actual KM Practices implemented, as well as to
elicit a self-assessed perception of the results of
these practices.

78

One of the significant results of the survey was


that there is a need to think about knowledge management from a whole of governmentperspective
rather than from the perspective of individual
organizations within central government. (OECD,
GOV/PUMA, 2003. This is a key difference from
the perspective of how knowledge management
programs are implemented in the U.S. federal
government. While they may be adopted within
individual departments or agencies, they are not
directed for adoption for the federal government
as a whole.

reSearcH deSign and


MetHodologY
The research methodology was designed to
investigate the factors affecting success in U.S.
federal agencys adoption of Knowledge Management Practices in Cabinet-level Departments and
Independent Agencies reporting to the President.
The Bureaus and Program Offices of the large
Cabinet-level Departments are comprised of approximately 130 organizations.
Research Goal: The central research goal was
to examine the influence of five key factors in
the success of knowledge management practices
within the federal government.
Research Hypothesis: Five research hypotheses were developed to address this research goal.
HS: Small federal agencies have higher KM
Practices Index Scores than large agencies.
HI: Independent agencies have higher KM
Practices Index Scores than Cabinet agencies.
HL: Agencies where KM has been in place
for more than 4 years have higher KM Practices
Index Scores than agencies where KM has been
in place for less than or equal to 4 years.
HP: Agencies with a commitment to an effective written KM policy or strategy have higher
KM Practices Index Scores than agencies with no
effective written KM policy or strategy.

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

Table 1. Survey research population


The 16 U.S. Federal Government Cabinet-level Departments
Agriculture

Housing & Urban Development

Commerce

Interior

Defense

Justice

Education

Labor

Energy

State

Environmental Protection Agency

Transportation

Health and Human Services

Treasury

Office of Homeland Security

Veterans Administration

The 10 U.S. Federal Government Independent Agencies


Agency for International Development

Office of Management and Budget

Army Corps of Engineers

Office of Personnel Management

General Services Administration

Small Business Administration

National Aeronautics and Space Administration

Smithsonian Institute

National Science Foundation

Social Security Administration

HR: Agencies where the KM responsibility is


assigned to a KM unit have higher KM Practices
Index Scores than agencies where the KM responsibility is assigned to a different department.
Each of these hypotheses has an associated
null hypothesis.
The dependent variable for this study is an
index score of Knowledge Management Practices
in federal agencies. The independent variables are
the size of the agency, whether or not the agency
type is a Cabinet-level Department or Independent
Agency, the longevity of KM Practices, whether
or not there is a commitment to adopt a KM policy
or strategy, and whether the primary responsibility
for KM Practices is directed by a CKO or KM unit
versus other functional locations in the agency.
The KM Practices survey questions for this
research are drawn from both the Statistics Canada
KM Practices survey conducted in 2001, and
from the first international KM Practices survey
conducted by the OECD in 2002. Previous to the
KM Practices survey of U.S. federal agencies,
Belgium, Canada, Denmark, Finland, France,
Germany, Greece, Hungary, Iceland, Ireland, Korea, Norway, Poland, Portugal, Slovak Republic,

Sweden, United Kingdom and the United States


participated in the OECD Knowledge Management Practices survey. This survey was limited
to seven common functional government areas
of operation in each country. The KM Practices
survey of U.S. federal agencies was conducted
in March 2005.
Research Population: The survey research
targeted the population of the 16 Cabinet-level
Departments and the 10 Independent Agencies of
the federal government listed in Table 1.
Research Instrument: The KM Practices
research instrument was used to determine the
extent of KM practices implemented in the 26
federal departments and agencies and the type of
practices most frequently employed. It consisted
of 45 questions in three sections: 27 questions
about specific Knowledge Management Practices; 11 questions regarding the perception of
effective results from the use of KM Practices;
and 6 mixed questions.
Validation and Reliability: The survey instrument was based on the previous KM Practices
surveys conducted by Statistics Canada, Denmark,
France, Germany, and the OECD. Our Web-based

79

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

online survey was tested, and feedback was received from a Survey Special Interest Group (SIG)
of members of the KM WG interested in taking the
survey in order to provide feedback prior to the
survey distribution. Feedback from these members
indicated a concern for the time required to take
the survey, and adjustments were made.
Research Procedures: Procedures recommended by Statistics Canada were followed in
the administration of the research instrument.
In addition, the recommendation of the central
government office in Germany that piloted a
Knowledge Management Practices survey to
utilize a Likert scale was followed. The Canadian
survey used a predictive scale that asked whether
the respondent had implemented the KM Practices
within the past 24 months, or whether they were
considering an implementation within the next
24 months. In January 2005, in a review of the
survey prior to its distribution, Statistics Canada
advised the use of a four-ratio Likert scale instead
of a five-ratio scale.

data collection and analYSiS


The survey was distributed in the first week of
March 2005. It remained open for 6 weeks and
was closed in April 2005. The online survey was
a blind survey, ensuring that no individual names
were attributable to the information collected
from each agency. The survey was distributed by
a survey company via an e-mail code to 326 KM
practitioners, employees of U.S. federal agencies
and members of the KM WG of the Federal CIO
Council.
After six weeks, the total count of survey
responses received from 26 different agencies
was 125, or 38% of the members of the KM WG.
Of the 125 responses, 119 were included in the
analysis, with 6 removed because of incomplete
or missing data.
Validation of the Survey Instrument: The
reliability of our survey tool was assessed after the

80

initial review of the data analysis of the descriptive


statistics concerning the respondent profiles and
prior to considering the validation of the research
hypotheses. An analysis of the normal distribution
of the variables was performed before examining the possible variance analyses. A descriptive
analysis was conducted in order to verify the kurtosis and skewness values of the various factors.
It is generally accepted that variables obtaining
an absolute value lower than 2 are acceptable
(George & Mallery, 2005). In order to assess the
discriminant and convergent validity, various factor analyses were conducted using the principal
component method with a Varimax rotation and
a Kaiser normalization. Only factors obtaining an
eigenvalue greater than 1 were extracted.
The Cronbachs alpha test was used to test the
internal reliability of the KM Practices construct
as well as its five dimensions. The overall alpha
value for the KM practices is =0.941, which
reflects an excellent level of reliability. All the
alpha values are greater than 0.7, which denote
an acceptable level of internal reliability of the
KM Practices construct.
Data Analysis: The KM Index Score for each
agency was evaluated under 5 dimensions, as a
result of the component factor analysis of the 27
KM Practice questions. Each dimension was rated
separately, and is described in Table 2.
In order to increase the validity and the reliability of our analysis it was decided to include
only the agencies where more than 1 respondent
responded to the survey (frequency 2).
1. Agency Size Influence. Hypothesis HS tests
the difference between the KM Practices Index
Score (dependent variable) associated with the size
of the federal department or agency (independent
variable). HS: Small federal agencies have higher
KM Practices Index Scores than large agencies.
Table 3 shows the size of each agency responding to the survey. While not a federal agency,
The World Bank was included in the survey as a
public sector organization with a long and close

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

Table 2. The KM Index Score Dimensions


Index Dimensions

Description

Knowledge Engagement

Agency implementation of KM Practices through KM policy, strategy as responsibility of a CKO or KM unit;


including formal and informal training in Knowledge Management Practices

Knowledge Exchange

Agency value system conducive to promote knowledge-sharing; improve workforce retention; monetary or
non-monetary incentives; capture of Best Practices and Lessons Learned; SME locators; portal for shared
documents; submit best practices

Knowledge Acquisition

Partnerships/alliances to acquire knowledge; captures external knowledge; develop CoPs; transfer knowledge
to less-experienced workers

KM Responsibility

Responsibility of managers/executives; responsibility of non-management workers

KM Training and
Mentoring

Formal and informal mentoring; funding for work-related courses; funding for KM study

Table 3. Agency Size


Agency

Frequency

Percent

Size

Cabinet
Independent

Department of Veterans Affairs

VA

3%

236,495

Cabinet

Department of the Army

US Army

7%

230,496

Cabinet

Department of the Navy


(incl. US Marine Corps)

US Navy

13

10%

174,350

Cabinet

Department of the Air Force

USAF

2%

154,999

Cabinet

Department of the Treasury

TREAS

5%

122,521

Cabinet

Department of Agriculture

USDA

6%

101,472

Cabinet

Department of Defense Civilian

DOD

13

10%

98,663

Cabinet

Department of Health & Human


Services

HHS

2%

63,514

Cabinet

Department of Transportation

DOT

7%

55,611

Cabinet

Army Corps of Engineers

USACE

4%

35,250

Independent

Environmental Protection Agency

EPA

2%

18,452

Independent

Department of Energy

DOE

11

9%

14,990

Cabinet

General Services Administration

GSA

4%

12,472

Independent

The World Bank

WB

2%

9,300

Special

Government Printing Office

GPO

2%

2,395

Independent

United States Agency for International


Development

USAID

6%

2,317

Independent

Pension Benefit Guaranty Corporation

PBGC

10

8%

780

Special

affiliation with the Federal Knowledge Management Working Group.


The KM Practices Index Score variable was
measured on an interval/ratio scale of values
ranging from (5-20). Since most agencies were
large-sized, we used the median value of the

agency size (45,431) in order to differentiate small


versus large agencies. Agencies having a size
lower than or equal to 45,431 employees were
categorized as small and the others as large.
An independent-sample one-tailed t test was used
to analyze the differences of means between the

81

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

Table 4. Descriptive Statistics of the 2 Groups Studied


Group Statistics
KM Index Score

Size_S_L

Mean

Std. Deviation

Std. Error Mean

Small
Large

33

13.1192

2.03984

.35509

53

11.2106

3.37009

.46292

Mean

Std. Deviation

Std. Error Mean

Table 5. Descriptive Statistics of the 2 Groups Studied


Group Statistics
KMIndexScore

Agency type

Cabinet

75

11.3290

3.21994

.37181

Independent

32

12.6541

3.00754

.53166

Figure 1. Comparison between the KM Index Score of Small and Large Agencies

two groups (small and large). Table 4 provides


the descriptive statistics of the two groups studied.
The probability associated with the Levenes
test for equality of variance is 0.012 (Table 5, row
(1)). Because this is less than .05, we can be
reasonably certain that the variance of the KM
Index score differs across the two groups. Data
from the second row of Table 5 is used (equal
variance not assumed).
Applying the two-step rule, p=0.001 (one
tailed) (lower than the pre-set of .05) and directionality of the difference in sample means is
consistent with HS (Small 13.12 > 11.21 Large).
Thus, H0 is rejected and HS is accepted. We can
be reasonably certain that small agencies have
higher KM Practices Index Scores than large
agencies.

82

2. Cabinet Agencies vs. Independent Agencies Influence: Hypothesis HI tests the difference
between the KM Practices Index Score (dependent variable) associated with Cabinet-level and
Independent Agencies (independent variable). HI:
Independent agencies have higher KM Practices
Index Scores than Cabinet agencies.
The KM Practices Index Score variable was
measured on an interval/ratio scale of values
ranging from (5-20). An independent-sample
one-tailed t test was used to analyze the differences of means between the two groups (cabinet
and independent). Table 5 provides descriptive
statistics of the two groups studied.
The probability associated with the Levenes
test for equality of variance is 0.594 (Table 6, row
(1)). Because this is more than .05, there is no
reasonable certainty that the variance of the KM

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

Table 6. Comparison between the KM Index Score of Cabinet-level and Independent Agencies
Independent Samples Test
Levenes
Test for
Equality of
Variances
F

KMIndexScore

Equal
variances
assumed
Equal variances not
assumed

.286

Sig.

.594

t-test for Equality of Means

df

Sig.
(2-tailed)

Mean Difference

Std. Error
Difference

95% Confidence
Interval of the Difference
Lower

Upper

-1.987

105

.050

-1.32516

.66696

-2.64761

-.00271

-2.043

62.476

.045

-1.32516

.64877

-2.62184

-.02848

Table 7. Longevity of Agency KM Initiatives


Frequency
Valid

Percent

Valid Percent

Cumulative Percent

< 2 years

38

31.9

31.9

31.9

2-4 years

36

30.3

30.3

62.2

5-9 years

15

12.6

12.6

74.8

> 10 years
Dont know!
Total

6.7

6.7

81.5

22

18.5

18.5

100.0

119

100.0

100.0

Index score differs across the two groups. Data


from the first row of Table 6 will be used (equal
variances assumed).
Applying the two-step rule, p=0.025 (one
tailed) (lower than the pre-set of .05) and directionality of the difference in sample means is
consistent with HI (Independent 12.65 > 11.33
Cabinet). Thus, H0 is rejected and HI is accepted.
It is reasonably certain that Independent agencies
have higher KM Practices Index Scores than
Cabinet-level agencies.
3. KM Longevity Influence: Hypothesis HL
tests the difference between the KM Practices
Index Scores (dependent variable) associated
with the longevity of the KM Practices (how
long the KM practices have been in place in the
organization) (independent variable). HL: Agen-

cies where KM has been in place for more than


4 years have higher KM Practices Index Scores
than agencies where KM has been in place for
less than or equal to 4 years.
Table 7 illustrates that in our survey population, 62.2% or more that half of the agencies have
had KM Practices implemented for a period of 2
to 4 years or less.
The KM Practices Index Score variable was
measured on an interval/ratio scale of values
ranging from (5-20). The longevity variable is a
discrete categorical variable (Less than 2 years,
2-4 years, 5-9 years, more than 10 years). A oneway Analysis of Variance (ANOVA) test was
performed to analyze the differences of means
between the various groups. Table 8 provides
descriptive statistics of the various groups studied.

83

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

Table 8. Descriptive Statistics of the Different Groups Studied


N

Mean

Std. Deviation

95% Confidence Interval for


Mean

Std. Error

Lower Bound
< 2 years

33

11.1827

2.54444

.44293

Minimum

Maximum

5.00

16.75

Upper Bound

10.2805

12.0849

2-4 years

32

12.1618

3.04531

.53834

11.0638

13.2597

5.00

17.32

5-9 years

14

13.7454

3.08852

.82544

11.9622

15.5287

9.05

18.63

> 10 years

13.3135

2.72521

.96351

11.0352

15.5919

9.40

18.88

87

12.1511

2.94919

.31619

11.5226

12.7797

5.00

18.88

Total

The probability associated with the Levenes


test for equality of variance is 0.743 (Table 9).
Because this is more than .05, we can not be
reasonably certain that the variance of the KM
Index score differs across the different groups
(equal variances assumed).
The results of the ANOVA test can be found
in Table 10. The significance value p=0.028 is
lower than the pre-set of .05, which indicates
that we can be reasonably certain that significant
differences exist in KM Index Scores among the
various groups studied.
In order to test our hypothesis we made a more
precise comparison between the groups <2 years
2-4 years and the other groups.
A pairwise multiple comparison test was
performed and the result of the contrast test is
displayed in Table 11. The significance value
p=0.012 is lower than the pre-set of .05. Thus,
H0 is rejected and HL is accepted. We can be reasonably certain that agencies where KM has been
in place for more than 4 years have higher KM
Practices Index Scores than agencies where KM
has been in place for less than or equal to 4 years.
4. KM Policy Influence: Hypothesis HP tests
the difference between the KM Practices Index
Score (dependent variable) associated with agencies that have adopted an effective written KM
policy or strategy and the agencies with no written KM policy or strategy (independent variable).
HP: Agencies with an effective written KM policy
or strategy have higher KM Practices Index Scores

84

Table 9. Test of Homogeneity of Variances


KMIndexScore
Levene
Statistic
.743

df1

df2
3

Sig.
83

.529

than agencies with no effective written KM policy or strategy


The KM Practices Index Score variable was
measured on an interval/ratio scale of values
ranging from (5-20). An independent-sample onetailed t test was used to analyze the differences of
means between the two groups (KM policy and
no KM policy). Table 12 provides descriptive
statistics of the two groups studied.
The probability associated with the Levenes
test for equality of variance is 0.620 (Table 13
row (1)). Because this is more than .05, we can
not be reasonably certain that the variance of the
KM Index score differs across the two groups.
Data from the first row of Table 12 will be used
(equal variances assumed).
Applying the two-step rule, p<0.000 (one
tailed) (lower than the pre-set of .05) and directionality of the difference in sample means is
consistent with HP (Policy 14.24 > 10.34 No
policy). Thus, H0 is rejected and HP is accepted.
We can be reasonably certain that Agencies which
have adopted an effective written KM policy or
strategy have higher KM Practices Index Scores

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

Table 10. Result of ANOVA Test


ANOVA
KMIndexScore
Sum of Squares
Between Groups

Df

Mean Square

77.348

25.783

Within Groups

670.659

83

8.080

Total

748.006

86

Sig.
.028

3.191

Table 11. Contrast Test Results


Contrast Tests
Contrast
KMIndexScore

Value of
Contrast

Std. Error

df

Sig. (2-tailed)

Assume equal variances

-3.7145

1.44380

-2.573

83

.012

Does not assume equal

-3.7145

1.44765

-2.566

26.987

.016

Table 12. Descriptive Statistics of the 2 Groups Studied


Group Statistics
KM policy in place
KMIndexScore

Mean

Std. Error
Mean

Std. Deviation

KM policy or strategy

38

14.2423

2.37113

.38465

No KM policy or strategy

69

10.3391

2.72698

.32829

Table 13. Comparison Between The KM Index Score of Agencies with or without A KM Policy or Strategy
Independent Samples Test
Levenes
Test for
Equality of
Variances

KMIndexScore

Equal
variances
assumed
Equal variances not
assumed

t-test for Equality of Means

Sig.

.248

.620

7.411

7.718

Sig.
(2-tailed)

Mean Difference

Lower

Upper

105

.000

3.90320

.52667

2.84891

4.94749

85.773

.000

3.90320

.50570

2.89787

4.90852

df

than agencies with no effective written KM policy or strategy.

Std. Error
Difference

95% Confidence
Interval of the Difference

5. KM Responsibility Influence: Hypothesis


HR tests the difference between the KM Prac-

85

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

Table 14. Descriptive Statistics of the Different Groups Studied


Descriptives
KMIndexScore
95% Confidence Interval
for Mean
N

Mean

Std. Deviation

Std. Error

Lower
Bound

Upper
Bound

Minimum

Maximum

HR

12.1220

2.38630

.84368

10.1270

14.1170

9.60

16.33

IT

17

12.6078

2.72768

.66156

11.2054

14.0103

9.23

18.88

KM Unit

22

12.8744

2.86626

.61109

11.6035

14.1452

6.25

16.98

Library

8.8708

2.33934

1.65417

-12.1473

29.8890

7.22

10.53

Executive

11

12.9644

2.92186

.88097

11.0015

14.9273

7.63

18.63

Grass-Roots

26

10.4692

3.23647

.63472

9.1619

11.7764

5.00

17.63

Total

86

11.9430

3.06369

.33067

11.2861

12.5998

5.00

18.88

Table 15. Test of Homogeneity of Variances


Test of Homogeneity of Variances
KMIndexScore
Levene Statistic

df1
.308

tices Index Scores (dependent variable) and the


functional area with primary KM responsibility
(independent variable). HR: Agencies where the
KM responsibility is assigned to a KM unit have
higher KM Practices Index Scores than agencies
where KM responsibility is assigned to a different
department.
The KM Practices Index Score variable was
measured on an interval/ratio scale of values
ranging from (5-20). The functional area responsibility variable is a discrete categorical variable
(Human Resources, Information Technology, KM
Unit, Library Services, Executive Management,
Grass-roots effort). A one way Analysis of Variance (ANOVA) test was performed to analyze
the differences of means between the various
groups. Table 14 provides descriptive statistics
of the various groups studied.
The probability associated with the Levenes
test for equality of variance is 0.907 (Table 15).

86

df2
5

Sig.
80

.907

Because this is more than .05, we can not be


reasonably certain that the variance of the KM
Index score differs across the different groups
(equal variances assumed).
The results of the ANOVA test can be found
in Table 16. The significance value p=0.028 is
lower than the pre-set of .05, which indicates
that we can be reasonably certain that significant
differences exist in KM Index Scores between the
various groups studied.
In order to test our hypothesis, it was necessary
to make a more precise comparison between the
group KM Unit and the other groups. The result
of the contrast test is displayed in Table 17. The
significance value p=0.038 (one-tailed) is lower
than the pre-set of .05. Thus, H0 is rejected and
HR is accepted. We can be reasonably certain that
agencies where the KM responsibility is assigned
to a KM unit have higher KM Practices Index

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

Table 16. Result of ANOVA test


ANOVA
KMIndexScore
Sum of Squares

df

Mean Square

Sig.

Between Groups

113.681

22.736

2.659

.028

Within Groups

684.144

80

8.552

Total

797.825

85

Table 17. Contrast Test Results


Contrast Tests
Contrast
KMIndexScore

Value of
Contrast

Std. Error

df

Sig.
(2-tailed)

Assume equal variances

-7.3375

4.08316

-1.797

80

.076

Does not assume equal

-7.3375

3.79480

-1.934

17.591

.069

Scores than agencies where the KM responsibility is assigned to a different department.

concluSion
The conclusions of the study were that the size
of the agency does influence the advance of KM
Practices within the federal agencies that were the
subject of this study. We can be reasonably certain
that small agencies have higher KM Practices,
as measured by the KM Index Score, than large
agencies. There was no previous expectation that
agency size would have an effect on the level
of the implementation of KM Practices in the
research population.
The study also found that whether or not
the agency is a Cabinet-level Department or an
Independent Agency does influence the advance
of KM Practices within the agency. Independent
agencies have higher KM Practices Index Scores
than Cabinet-level Departments. There was no
expectation that the type of agency, either Cabinetlevel or Independent Agency, would have an effect on the level of their implementation of KM
Practices. The research gives no indication for

this conclusion. This is a new finding that could


be explored further.
The research data were also analyzed to determine whether agencies where KM Practices were
in place for more than 4 years had higher KM
Practices Index Scores than agencies where KM
Practices had been in place for less than 4 years.
The study found that the longevity of KM Practices does influence the advance of KM Practices
within agencies. Agencies where KM has been
in place for more than 4 years have a higher KM
Practices Index Score than agencies where KM
Practices have been in place for less than 4 years.
This conclusion would appear to bear out the fact
that KM implementation matures and continues to
expand over time. This is an encouraging finding.
The study also found that whether or not there
is a commitment to an effective written KM
policy or strategy does influence the advance
of KM Practices in the agencies included in the
study. Agencies with an effective written KM
policy or strategy have higher KM Practices Index
Scores than agencies without an effective written
KM policy or strategy. As in most management
disciplines, policy, planning and strategy set the
tone for the agencys commitment to become

87

An Evaluation of Factors that Influence the Success of Knowledge Management Practices

knowledge-centric organizations. This indicates


the value that can benefit an organization whose
management is committed to setting a policy for
the implementation of a knowledge management
program.
The study found that the location of primary
responsibility for KM Practices i.e., whether
responsibility is assigned to a KM unit versus a
different department does influence the advance
of KM Practices within the agency. Agencies
where the KM responsibility is assigned to a KM
unit have a higher KM Practices Index Score than
agencies where KM responsibility is assigned to
a different department or unit. We can conclude
that when a KM unit is created and assigned the
responsibility for the implementation of a KM
program throughout an agency, that the visibility
of this commitment results in a broader number
of KM Practices.
The study also tested the difference between
the KM Practices Index Scores associated with
survey respondents who have a KM job title and
respondents who have a job title not related to
KM. The aim was to determine whether or not
respondents with a KM job title provided higher
KM Practices Index Scores than respondents with
a different job title. The study found that we can
not be reasonably certain that respondents with
a KM job title provided higher KM Practices
Index Scores than respondents with a different
job title. Therefore, we can be reasonably certain
that responses from KM practitioners relative to
their agencys implementation of KM Practices
are not biased.
The significance of this research into the
implementation of KM Practices in U.S. federal
agencies has provided us with a first benchmark
view into the demographic characteristics of the
26 agencies that have successfully implemented
KM programs.
Additional information about the nature of
the KM practices implemented were also significant which practices were implemented most
frequently across the responding agencies; the

88

results and benefits from the implementation as


indicated by the KM practitioners themselves;
and the methods of measurement applied across
agencies. Unfortunately, we were unable to present
this information within the context of this chapter.

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89

Section 2

KM Measurements

91

Chapter 6

Process Model for Knowledge


Potential Measurement in SMEs
Kerstin Fink
University of Innsbruck, Austria

abStract
Knowledge measurement is developing into a new research field in the area of knowledge management.
To ensure that a company is successful, business, technology, and human elements must be integrated
and balanced into a knowledge measurement system. The introduction of a knowledge audit with the
objective to uncovering the tacit knowledge in an organization and of identifying the existing management practices is needed. This chapter uses the quantum mechanical thinking as a reference model
for the development of a knowledge potential measurement system. This system is influenced by three
measurement components: (1) Person-dependent variables, (2) System-dependent variables and (3)
knowledge velocity. Based on several case studies conducted in small and medium-sized enterprises, a
process model for the implementation of the knowledge potential framework is discussed and introduced.
Future research and limitations of the model are discussed in the final part.

Knowledge MeaSureMent
introduction
In recent years, not only knowledge management,
but also primarily the measurement of knowledge
(Holsapple, 2008; Jennex, 2007; Skyrme, 1998;
Tiwana, 2000) is developing into a new research
field. Skyrme (1998) sees the measurement and
management of knowledge-based assets as one of
DOI: 10.4018/978-1-60566-709-6.ch006

the most important issues for knowledge organizations. As a result, new methods, new methodologies, and new tools have to be developed to
measure the knowledge of organizations and of
the knowledge workers. A range of quantitative
measures - mainly money-based - is available to
measure the value of a firm and its intellectual
capital. The focus is primarily in the measurement of stocks or flows. Business measurements
are the bases for decision making. Defining and
measuring the value of a company are key stra-

Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

Process Model for Knowledge Potential Measurement in SMEs

tegic concerns in contemporary companies. In


the knowledge-economy, the value of the companys knowledge and its measurements are the
key drivers for success. In the knowledge-based
economy (Stewart, 1997), the management and
the measurement of intangible assets has become
one of the most important issues. Historically,
business focused on the measurement of tangible
assets such as the return on investment, cash flow,
and the cost of sales. In the recent years, the focus
shifted towards measuring intangible assets such
as customer satisfaction and the knowledge of the
company personnel. In light of this transition,
companies are trying to combine both financial
and nonfinancial measurements to achieve optimal
organizational well-being.
Already in 2000, the OECD (Organization
for Economic Co-operation and Development)
research area concentrates on the measurement
of the knowledge and learning (OECD, 2000).
Knowledge measurement systems can help policy
makers identify where outcomes fall short of
expectations. In the near future, it will be more
important to calculate the amount of knowledge in
specific sectors and the rate at which knowledge
is produced with much more accuracy. The importance of measurement systems for knowledge
also is pointed out by Pearson (1990). To ensure
that a company is successful, business, technology, and human elements must be integrated
and balanced. The key players in a knowledge
organization are the experts with their skills and
experiences. Amar (2002) points out that experts
in knowledge organizations work together not only
to achieve the goals of the organizations, but also
to achieve the fulfilment of their own goals by using the organization as a vehicle to achieve them.
Managers in organizations have to recognize that
the uniqueness and creativity of each knowledge
worker will lead to customer satisfaction and to
the success of the company. Knowledge workers
are characterized by a high individuality and by
the denial of formal and bureaucratic structures.
The major competitive advantage of a knowledge

92

organization is the pool of knowledge workers


who find creative and quick problem solutions,
hence seven identified characteristics should be
taken into consideration (Amar, 2002):

To connect the doers work with the system


outcome, end products, or services, and/or
with incoming factors, inputs, services, or
raw materials;
To have professional and social interaction
within and outside the organization provided by or through the knowledge work;
To perform a variety of knowledge tasks
and skills;
To know how important and how visible
the knowledge workers part is in the organizations scheme of things, project, product, or service to the outcome;
To believe others have a high regard for
this work;
To employ state-of-the-art technology in
performance of this work;
To provide opportunities for new learning
and personal growth.

In general, knowledge measurement approaches can be clustered into two mainstream areas:
(1) Cognitive Science and (2) Management Approaches. Cognitive Science deals with the nature
of intelligence, and it rests on empirical studies
that describe the performance of human subjects
in cognitive tasks. Another way to structure cognitive science is to understand that field more deeply
and to know the disciplines that contributed to its
foundation. Simon and Kaplan (Simon & Kaplan,
1989) identify six disciplines which determine
the field: philosophy, psychology, neurosciences,
artificial intelligence, language, and cognition.
These six fields correspond to The MIT Encyclopedia of the Cognitive Sciences (Wilson &
Keil, 1999) that constitutes the foundation on the
cognitive sciences. The Massachusetts Institute
of Technology (MIT) clustering of the cognitive
sciences into the fields of philosophy, psychol-

Process Model for Knowledge Potential Measurement in SMEs

ogy, neurosciences, computational intelligence,


linguistics and language, and culture, cognition
and evolution establish the basic framework for
discussing the cognitive science approach because
it is one of the most detailed approaches.
Over the years, research into measuring the
value of company intangible assets or intellectual capital (IC) has produced many methods
and theories (Management Approach). Figure 1
illustrates a measurement matrix given an overview of management measurement approaches.
The author uses the classification schema from
Sveiby (Sveiby, 1997) as a basic framework, and
is adapting it to the quantum mechanical thinking
dimension which is the key research focus of this
chapter. The X-Axis represents the content of measurement (money-based measurement, no moneybased measurement, quantum performance measurement). The Y-Axis symbolizes the object of
measurement, such as unit/process, organizational
level and finally individual (knowledge worker)
level. The 9x9-Knowledge Performance Matrix
visualizes the different measurement methods
and techniques. Knowledge measuring solutions
can accelerate decision making processes, help
enhance the speed of the business process, and
deliver a decisive competitive advantage, which
can be clustered into five commonly known
knowledge management categories:
1.

2.

3.

Direct Intellectual Capital Methods (DIC).


The DIC methods estimate the $-value of
intangible assets by identifying various
components. Once the components are
identified, they can be evaluated directly
either individually or as an aggregated
coefficient.
Market Capitalization Methods (MCM).
The MCM calculate the difference between
a companys market capitalization and its
stockholders equity as the value of its intellectual capital or intangible assets.
Return on Assets Methods (ROA). The ROA
methods divide the average pre-tax earnings

Figure 1. Knowledge measurement matrix

4.

5.

of an organization for a period of time by


the average tangible assets of the company.
The result is the ROA of a company, and it
is compared with the industry average. The
difference is multiplied by the organizations
average tangible assets to compute the average annual earnings from the organizations
intellectual capital. Dividing the intellectual
capital earnings by the companys average
cost of capital or by a reference interest
rate results in an estimate of the value of an
organizations intellectual capital.
Scorecard Methods (SC). SC methods
identify different components of intellectual
capital and corresponding indicators which
are generated in scorecards or graphs.
Knowledge Potential Measurement Method
uses quantum mechanical thinking to evaluate the intangible assets asscociated with
knowledge work.

The research focus combining the individual


level, representing the knowledge worker perspective, with the quantum mechanical thinking
integrating the uncertainty view of knowledge is

93

Process Model for Knowledge Potential Measurement in SMEs

the objective of this chapter. The research of this


chapter focuses on the measurement process of
the highly uncertain knowledge of the experts
who have a high importance to the organization.
This field is very critical for the future success of
organizations because it contains the Knowledge
Potential (Fink, 2004) of the organization and its
knowledge workers. The term knowledge potential
refers to the skills and experience each knowledge
worker possesses based on the learning process
to transform them into an excellent employee.
The knowledge potential is about identifying,
networking, and implementing the tacit knowledge
of the experts quickly to achieve the companys
strategic objectives. The knowledge potential of
a knowledge worker covers customer capital,
networking and communication skills, competitor
information, content and culture knowledge, constant learning and training processes, information
about knowledge management systems, information about the organizational knowledge structure,
and the evaluation of the tacit knowledge of the
experts. The management has to guide knowledge workers to make their knowledge potential
transparent for the organization.
Therefore, the objective of this chapter is to
introduce a knowledge measurement system which
enables each organization to make statements
about the knowledge potential of each knowledge
worker. Influenced by the circumstance that an
uncertain character distinguishes the term knowledge, each organization has to find a measurement
system to evaluate the knowledge potential of its
highly important experts.

quantuM MecHanical
tHinKing and Knowledge
The concept of quantum mechanical thinking
and the Uncertainty Principle of Heisenberg are
the basic frameworks for the derivation of the
Knowledge Potential Measurement Model.

94

quantum organization
There is an aspect of uncertainty (Pearl, 1990)
associated with knowledge management and
measurement. Looking at our daily reasoning processes, most of the decisions are based on uncertain
premises, meaning that most of the action relies on
guesses. In general, it has to be accepted the fact
that uncertainty is a fact of life. Nature shows that
uncertainty exists from quantum to cosmological
scales. Complex systems, such as the ecosystem,
the economy, society, and climate border chaos
and order where the Nature is very creative. In the
knowledge management environment complexity
and uncertainty are combined forces influencing
the system and making it difficult to predict an
outcome. Uncertainty is responsible for the fact
that the more a system gets complex, the less
precise statements can be made.
Kilmann (2001) is introducing the quantum
organization as a new paradigm to manage organizational transformation in a world which
is highly interconnected and where success depends whether the participants progress towards
self-aware consciousness. This means, that
the process of transformation in organizations
requires that individuals develop a self-aware
consciousness. The transformation for organizations has to be seen in the light of the shift from
the old paradigm which Kilmann (2001) calls
Cartesian-Newtonian Paradigm, to the new
paradigm, the Quantum-Relativistic Paradigm.
The traditional old paradigm separates people
from an outside, objective material universe.
This worldview is influenced by the separation
of consciousness and matter. The physical world
exists on its own, and it is unaffected by human
beings. This means, that the human mind has no
effect on the nature of the physical reality. The old
paradigm is underlying a deterministic certainty
in the sense that objects are inert and only moved
by external forces. Objects can be compared with
a billiard ball for which position and momentum
can be determined simultaneously and precisely.

Process Model for Knowledge Potential Measurement in SMEs

The changing paradigm is influenced by the


relevance of quantum mechanical thinking. The
key question for Kilmann is why is it possible
to apply quantum-based principles to mediumsized objects such as people and organizations
(Kilmann, 2001). One reason for choosing the
Quantum-Relativistic Paradigm is to look at the
self-motion of particles and people. For Kilmann
both particles and people can be seen as monads
because they are free to choose their direction and
motion by themselves and because they do not need
external forces to move them. Nuclear particles are
similar to human beings. They have the freedom
to go anywhere and even to transform themselves
into a variety of other forms. This process causes
uncertainty in the sense of the Uncertainty Principle of Heisenberg (Gribbin, 1999). In quantum
physics, position and momentum uncertainty are
the archetypal example discovered by Werner
Heisenberg. This principle means that no entity
can have both precisely determined momentum
and precisely determined position at the same time.
Photons and people are at self-motion. A second
explanation for the new paradigm is the nature
of the human brain which is subdivided into two
halves, the left and the right hemispheres. While
the left brain is associated with more logical thinking, the right brain is responsible for processes
that enable a person to recognize whole images.
Zohar discusses the nature of the human being from
a quantum thinking perspective (Zohar, 1997):
The essence of quantum thinking is that it is the
thinking of precedes categories, structures, and accepted patterns of thought, or mind-sets. It is with
quantum thinking that we create our categories,
change our structures, and transform our patterns
of thought. Quantum thinking is vital to creative
thinking and leadership in organizations. It is the
key to any genuine organizational transformation.
It is the key to shifting our paradigm. Quantum
thinking can link between the brains creativity,
organizational transformation and leadership, and
the ideas found in the new science. This new
way of working also demands a different kind of

organizational structure and a new view of dealing


with employees. In the new paradigm, the knowledge of employees, the skills and experiences of
experts gained over a long period of learning and
communicating with other people stand at the
center of consideration. The basic assumption
of the new paradigm is that the problem solving
process of an individual is directed by his inner
knowledge and experience. Kilmann uses the term
quantum organization as opposed to Newtonian
organization. The term quantum organization
is used synonymous with networked organization
or knowledge-creating organization. A quantum
organization is characterized by a set of seven
categories (Kilmann, 2001):
1.

2.

3.

4.

The Inclusion of Consciousness in SelfDesigning Systems. This means that each employee has knowledge, skills, and experience
to influence the design of the organizational
system. It is a proactive approach which also
includes the knowledge of stakeholders such
as customers, competitors, suppliers and
other partners. Each individual is contributing creativity and knowledge-in-action to
solve problems.
Organizations as Conscious Participants
Actively Involved in Self-Designing
Processes. This dimension of quantum organizations implies that each employee tries
to design value-added processes throughout
the organization. Participants should reflect
on their processes and built new knowledge which is applied to add value to the
organization.
Cross-Boundary Processes as Explicitly
Addressed and Infused with Information.
In a quantum organization, its members are
encouraged to exchange knowledge with
other partners across the organizational
boundary.
The Conscious Self-Management of a
Flexibly Designed Organization. In contrast
to the Newtonian organization, the subunits

95

Process Model for Knowledge Potential Measurement in SMEs

5.

6.

7.

in the quantum organization are responsible


for the self-management of all different kinds
of tasks such as hiring, training, recruiting,
educating and learning. The knowledge
workers are individuals who have the freedom to self-design and self-manage daily
work in order to develop creative solutions
to customer problems.
The Internal Commitment of Active
Participants. In a quantum organization,
employees are committed to discover new
knowledge and to build new knowledge and
to refresh the existing experiences in educational programs. The knowledge worker
is responsible for seeking new opportunities for constant improvement of his own
knowledge and, by this, improvement for
the whole organization.
The Empowered Relations Among Active
Participants. The high-level professionals
in a quantum organization exchange their
skills and experiences with other knowledge workers within or even outside the
organization. A cross-boundary connection
and communication with other participants
helps to foster and exchange knowledge
across national boundaries and to gain and
improve the existing knowledge base.
The Eternal Self-Transformation of Flexibly
Designed Organizations. Finally, a quantum
organization has to nourish the trust, commitment and creativity gained in the past and
transform it into present and future activities.
The transformation only will be successful
if the knowledge of joint ventures, mergers
and acquisitions, and global networks will be
used for a creative problem solving process.
The useful knowledge gain will build an
organization that can rely on the experience
and skills of its knowledge workers.

If organizations are transforming into the new


paradigm, they need a corresponding quantum
infrastructure which enables their employees to

96

use self-awareness and self-motion skills, for


teambuilding, structure, strategy, process, and
culture. The experts with their skills have to have
a cultural environment which is not built on a
standard operating system like the Newtonian
organization, but rather one built on a system of
complex problem solving which often requires not
only the expertise of one professional but also the
sharing of knowledge with diverse experts through
networking and communication.

uncertainty Principle
In 1927 Heisenberg articulated the so called
Heisenberg Uncertainty Principle or Indeterminacy Principle (Green, 2000; Wick, 1995).
According to the Uncertainty Principle, the position and the velocity of an object cannot both be
measured exactly at the same time. Any attempt
to measure the velocity of a subatomic particle,
such as an electron, precisely is unpredictable,
so a simultaneous measurement of its position
has no validity. This result has nothing to do
with inadequacies in the measuring instruments,
the technique, or the observer; it arises from the
intimate connection in nature between particles
and waves in the subatomic realm.
There are four properties which are important
to the Uncertainty Principle: the position of the
electron, its momentum (which is the electrons
mass times its velocity), its energy, and the time.
These properties appear as variables in equations
that describe the electrons motion. Uncertainty
relationships have to do with the measurement of
these four properties; in particular, they have to
do with the precision with which these properties
can be measured. Until the advent of quantum
mechanics, everyone thought the precision of any
measurement was limited only by the accuracy
of the measurement instruments used. Heisenberg showed that regardless of the accuracy of
the instruments used, quantum mechanics limits
precision when two properties are measured at
the same time. These are not just any two prop-

Process Model for Knowledge Potential Measurement in SMEs

erties; they are the two represented by variables


that have a special relationship in the equations.
The uncertainty relationship can be written more
precisely by using mathematical symbols. First,
the basic symbols have to be defined:

x is the uncertainty in the position


measurement;
p is the uncertainty in the momentum
measurement;
E is the uncertainty in the energy
measurement;
t is the uncertainty in the time
measurement;
h is a constant known from quantum theory
known as Plancks constant;
is pi.

Putting these symbols together, the two uncertainty relationships look like the following
(Gerjuoy, 1993):
px

h
4

Knowledge Potential
MeaSureMent fraMeworK
basic concept and assumptions

and
E t

h
4

Assume that it is possible to measure the


position of a moving electron with such great
accuracy that x is very small. What happens
to the precision of momentum p, measured at
the same instant? From the first relationship, the
following formula can be calculated:
p

the precision of the position measurement gets


so great that the uncertainty x gets so small that
it approaches zero, then p gets so large that it
approaches infinity or it becomes completely undefined. The uncertainty relationship for energy is
stated as giving an estimate for E in the energy
that is found when measuring it in an experiment
lasting at most a time t. Considering the two
equations above, a quite accurate measurement of
one variable involves a relatively large uncertainty
in the measurement of the other.
Quantum theory measurement is needed in a
microscopic world because the measurement interaction disturbs the object. The classical theory
of measurement is adequate for the macroscopic
world because the measurement interaction does
not significantly disturb the object. The Uncertainty Principle of Heisenberg is the theoretical
framework for the derivation of the knowledge
potential measurement framework.

h
x
4

It can be seen that the uncertainty in the momentum measurement, p, is very large because
x in the denominator is very small. In fact, if

The Uncertainty Principle of Heisenberg is the


basic theoretical framework for the knowledge
potential measurement procedure. However, it is
not possible to take the equations from Heisenberg
and to transfer them to the knowledge potential approach without changes. The Uncertainty Principle
functions as a reference-model for the knowledge
approach because it is not a physical environment.
The linking relationship is that uncertainty is the
major characteristic of knowledge as well as a
physic phenomenon. The measurement procedure
of the knowledge worker is greatly influenced by
uncertain decisions. The match between the two
ideas is the concept of uncertainty. During the analogical mapping process, moreover, the existing
structure of the Uncertainty Principle is imported
into the new knowledge measurement approach.

97

Process Model for Knowledge Potential Measurement in SMEs

The problem of measurement in the knowledge


approach arises from the fact that several principles
of the quantum world appear to be in conflict with
the knowledge approach and that, in contrast to
quantum measurement, the knowledge approach is
influenced by the individual abilities of a person.
This is the reason why knowledge management
has three basic assumptions for the uncertainty
measurement:
1.

2.

3.

The constant h will not be used; it is substituted for the knowledge potential of a
knowledge worker.
The measurement procedure is not a physical one. Thus, characteristics of a human
resource based approach must be taken into
consideration. A basic physical definition has
to be re-interpreted and put into a knowledge
context by using the analogical reasoning
process.
The theoretical implication of Heisenbergs
measurement is that the more precisely the
position is determined, the less precisely the
momentum is known in this instant, and vice
versa. This physical phenomenon is difficult
to explain for the knowledge measurement
process, hence, the conducted case studies
show first implications of this phenomenon.

It must be pointed out that the procedure of


measurement in the case of knowledge is not a
traditional one in the sense of a physical measurement. Rather it is a measurement in psychology.
Michell (Michell, 1999) points out that there is
a difference in measuring in the natural sciences
and in a psychological context. In the natural
sciences numbers are not assigned to anything;
they are measured like they are in physics. The
difference is that numbers are assigned to objects
in psychological measurement. In the knowledge
potential measurement procedure, each knowledge worker is assigned a number, his personal
knowledge potential.

98

Knowledge Potential
Measurement Process
Figure 2 illustrates the Knowledge Potential
Measurement Model (Fink, 2004).
The two key measured properties are:

Knowledge momentum (person-dependent


variables); and
Knowledge position (system-dependent
variables).

Knowledge mass is a quantity representing


the amount of expertise, skills, and experience
of a knowledge worker. Mass is characterized
by an individual dimension, and it is dependent
on the personal ability of a knowledge worker to
deal with his experience. Mass can be defined as
a person-dependent variable. The amount of the
mass is influenced by variables which depend
on the experience of a knowledge worker. The
variables concerning individual knowledge acquisition, transfer, and learning experience are
assigned to the mass index. The knowledge mass
is the sum of the four dimensions of the knowledge potential view: content, networking, skills,
and learning information. Therefore, knowledge
mass can be defined as follows:
Knowledge Mass = {Content, Networking, Skills,
Learning}.
The term knowledge mass is defined as the sum
of person-dependent variables that influence the
knowledge potential of an expert and is measured
by four variables: Content, Networking, Personal
Skills and Learning Environment.
Velocity is an expression for the displacement
an object or particle undergoes with respect to
time. Time is an observed phenomenon by means
of which human beings sense and record changes
in the environment and in the universe. Velocity
then, is the time rate of change of position of a body

Process Model for Knowledge Potential Measurement in SMEs

Figure 2. Knowledge potential measurement model

in a particular direction. So velocity is directionoriented. When evaluating the velocity of an object, one must monitor the direction. To determine
the velocity of an object, one would need to know
the speed and direction of the object. In terms of
the knowledge potential view, knowledge velocity
is the accomplishment of problem solving objectives. How good or bad has a knowledge worker
reached his objectives within a certain time? This
means, if a person has to solve a problem, quality
of the problem solution and length of time to solve
a problem are important facts. The quality of the
solution process is relevant, but the time it took
to solve the problem also is relevant. Velocity is
an expression of the quality of the problem solution process for a knowledge worker in a certain
time. It is not enough that a knowledge worker
solves a problem quickly, but you also need to
know the direction of the solution process. Velocity measures the degree to which any knowledge
contributes to knowledge potential. An optimal
velocity performance is knowledge with a high
degree of contribution towards the improvement of
the knowledge potential. Tiwana (Tiwana, 2000)
uses the term knowledge velocity that successful

companies must develop to overcome knowledge


sluggishness and to gain competitive advantages.
Tiwana notes that knowledge sluggishness is to
learn from failures and their analyses to prevent
the repetition of past mistakes. It is necessary to
integrate a knowledge velocity into the knowledge
processes of a companys business processes.
Knowledge velocity should allow people to learn
from past decisions and to apply this experience
to new complex choices and to future decisions.
Davenport and Prusak (1998) point out that a
successful and efficient knowledge transfer is
influenced by the velocity of the transfer, the
speed with which knowledge moves through an
organization. How quickly and widely is it disseminated? How quickly do the people who need
the knowledge become aware of it and get access
to it? In a company, there must be a general acceptance for rapid decision-making and the quick
application of knowledge to the development of
new products and services. Velocity is an important
variable for one to understand how efficiently a
company is using its knowledge capital. The term
knowledge velocity in the knowledge potential
view can be defined as follows:

99

Process Model for Knowledge Potential Measurement in SMEs

Knowledge Velocity = Degree of quality that a


knowledge worker uses to solve a problem with
respect to the time dimension. Thus, how rapidly
can customers receive high quality problem solutions? Knowledge velocity is the implementation
speed for good solutions and the quality of the
solution to the problem. Knowledge velocity is
directed towards the high quality solution of
customer problems. Knowledge velocity is the
accomplishment of problem solving objectives.
Finally, the term knowledge position has to be
described. The questions behind the knowledge
position measurement are: In what environment
is a person applying his knowledge? Where does
the action take place? What factors influence the
application of knowledge? The position variable is
system-dependent. The knowledge worker cannot
directly influence the position dimensions because
they are not dependent on his personal behavior.
Knowledge Position = {Culture, Organizational
Knowledge, Competitors, Customers, I&CS/KMS}
The term knowledge position covers all systemdependent variables that influence the creation of
the knowledge potential of the knowledge worker
and is influenced by four variables: Culture, Organizational knowledge, Competitor Knowledge,
Customer Knowledge and Information/Knowledge
Management Systems.
Knowledge position covers all of the influencing variables for knowledge potential, variables
that cannot be manipulated and changed directly
by the knowledge worker. The action-knowledge is
embedded in outputs such as products or services
demanded by a customer.
The definition of the two variable groups
depends on the company specific structure and
on industry-dependent influencing factors. These
properties appear as variables in an equation that
describes the knowledge potential of a knowledge

100

worker. Each knowledge worker has answered


questions concerning the nine dimensions which
cover the different knowledge management aspects. These nine dimensions cover the major
influencing knowledge fields. The number of
dimension also can be enlarged to more than
nine or reduced to less than nine dimensions.
These specifications depend on the industry and
on the specific company setting. Similar to the
Jennox and Olfman (Jennex & Olfmann, 2007;
Jennex, Smolnik & Croasdell 2008) Knowledge
Management Success Model it was derived from
several US and European case studies and expert
interviews conducted by the author. These case
studies took place during the time period between
2004 to 2008 and were concentrated on the ITindustry sector. In addition, videotaping (Herschel
& Yermish, 2008) and analysis is applied to get
more insight into the knowledge sharing process.
After the calculation of the knowledge potential, the value is clustered into five knowledgerating intervals. These five stages are based on the
skill acquisition model by Dreyfus and Dreyfus
(1997). The model of skill acquisition has the basic
idea that those persons who master specific skills
must pass through five levels of learning: (1) Novice, (2) advanced beginner, (3) competency, (4)
proficiency and (5) expertise (knowledge worker).
Finally, this skill acquisition position determines
future actions for SMEs to implement knowledge
processes and knowledge management systems.
The Knowledge Potential Measurement
Method is related to the field of Business Performance as well as Human Resource Performance
Measurement approaches (Kavanagh & Thite,
2009; Neely, 2007; Spitzer, 2007). In the future
it will be necessary to align measures of human
resourses to the strategic mission of an organization in order to optimize the planning of human
capital. From a strategic point of view, performance measurement is a central part of gaining
competitive advantages. Spitzer (2007) states
that performance measurement needs integration
into the daily working process in a positive way

Process Model for Knowledge Potential Measurement in SMEs

Figure 3. Knowledge potential process model for SMEs

of thinking. In order to make measurement more


acceptable it has to be socialized in teams, units
and the overall organizations.

Knowledge Potential Measurement


Process Model for SMes
Fink (2004) applied the Knowledge Potential
Measurement Method to large organizations,
primarily in the ERP vendor segment. The experiences of the conducted case studies showed
that the process of measurement is cost and time
consuming. Since 2006, the measurement method
was therefore applied to small and medium sized
organizations (SMEs) in the US and in European
countries (Fink & Ploder, 2008). Historically,
knowledge management focused on the domain
of larger organizations. Consequently issues of
culture, networking, organizational structure
and technological infrastructure have been examined upon the implementation of knowledge
management initiatives in large multi-national
organizations and seem to give little relevance
(Corso, Martini, Paolucci, & Pellegrini, 2003;
Delahaye, 2003; Wong, 2005) to small and medium enterprises (SMEs). However, the success
and growth of SMEs depends on how well they
manage the knowledge of their knowledge work-

ers. Managers in SMEs have to recognize that


the uniqueness and creativity of each knowledge
worker will lead to customer satisfaction and the
success of the SMEs. The view of knowledge
management for SMEs is currently discussed
by Fink and Ploder (Fink & Ploder, 2006; Fink
& Ploder, 2007; Fink & Ploder, 2008) who state
that SMEs need a knowledge process model that
can be applied in a time-saving and cost-saving
manner. Figure 3 illustrates the basic framework
for SMEs to integrate knowledge measurement
into their knowledge management concept.
The SME layer defines the local and national
specifications for a SME in order to participate
on knowledge management. During this process
it is necessary to deal with a clear focused strategy, a good leadership practice and the social
context for successful knowledge management
implementation. After this process, for SMEs it
is necessary to concentrate on the key knowledge
processes of their organization (Fink & Ploder,
2008). Besides complex knowledge management
systems, Fink and Ploder (Fink & Ploder, 2007)
found out that only for key knowledge processes
for SMEs are relevant for modeling (knowledge
process layer). However, after the definition of
the key knowledge processes, the knowledge
potential measurement process needs to be inte-

101

Process Model for Knowledge Potential Measurement in SMEs

Figure 4. Balanced system for knowledge potential method

grated into the modeling process. Once the


knowledge workers have been identified, they
their personal knowledge potential value can be
measured by applying the knowledge potential
method. This means, that the knowledge worker
stand in the center of consideration and the knowledge velocity, knowledge position and knowledge
momentum are measurement. The result should
be a balanced system.
Figure 4 illustrates a balanced system for the
knowledge potential measurement process indicating that a balance can only be achieved by a
positive application of the knowledge velocity.
This means, only knowledge workers who are
able to apply their know-how in a timely manner
can gain competitive advantages for SMEs. The
Performance Layer is an indicator system that
measures the success of the knowledge process
and enables SMEs to improve the knowledge
potential of their experts in order to gain competitive advantages.

liMitationS and future


reSearcH
The limitations of any measured value involve
uncertainty, thus uncertainty should be taken into
consideration for any calculated value. Ronen
(1988) states, that from a physical viewpoint,
all measured values are approximate and any
degree of accuracy is subject to the limitations
of the Heisenberg Uncertainty Principle in the

102

sense that uncertainty is inherent in physical


processes. Ronen makes the point that the accuracy of physical parameters improves over time,
and it reduces uncertainties. However, this basic
idea from physics also can be transferred to the
knowledge potential view, meaning that the measurement uncertainty can be reduced over time.
In our everyday life, decisions are made based on
the calculation of numerical values. The quality
of the decision is highly dependent on the size of
the error associated with those values. A single
measurement can be the basis for further actions
concerning our safety, health, and environment
or, in our case, the companys knowledge value.
Therefore, it is important to keep the uncertainties of such measurements small enough that any
actions based on the measurement are negligibly
affected. The measurement of the nine variables
done by the knowledge-engineer includes an
uncertainty which affects the system of measurement and, hence, the outcome of that system.
This means the calculated knowledge potential
for each knowledge worker is associated with
an uncertainty based on the measurement error
of the interviewer. However, the idea exists in
our mind that we measure correct values. Gupta
(1992) argues that every human is confronted with
uncertainties arising from our thinking, cognition, and perception processes. In our learning
process, every human is collecting experiences
from which useful information is extracted from
the uncertainties in our environment, and this
information is used for further actions and decision making processes.
Current and future research deals with the
further specification to the measurement process to the SME characteristics. The process of
measurement itself has to be simplified in order
to overcome knowledge measurement barriers
(Fink, 2009). So far, expert interviews have been
conducted with each knowledge worker in order
to measure the value in the nine dimensions. Currently a software prototype is under development
to standardize certain questions and to improve

Process Model for Knowledge Potential Measurement in SMEs

the result process. The key measurement process


is still conducted with expert interviews and
videotaping.

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KeY terMS and definitionS


Knowledge Mass: The sum of person-dependent variables that influence the knowledge
potential of an expert and can be measured by
variables such as content, networking, personal
skills and learning environment.
Knowledge position: All system-dependent
variables that influence the creation of the
knowledge potential of the knowledge worker
and is influenced by variables such as culture,
organizational knowledge, competitor knowledge,
customer knowledge and Information/Knowledge
Management Systems.
Knowledge Potential Measurement: An
expert oriented measurement process that puts
the employee in the center of consideration. The
main focus lies in the ability to capture the variety
of influencing factors in a working environement.
Knowledge Velocity: The degree of quality
that a knowledge worker uses to solve a problem
with respect to the time dimension. Thus, how
rapidly can customers receive high quality problem
solutions? Knowledge velocity is the implementation speed for good solutions and the quality of
the solution to the problem. Knowledge velocity
is directed towards the high quality solution of
customer problems. Knowledge velocity is the
accomplishment of problem solving objectives.

Process Model for Knowledge Potential Measurement in SMEs

Knowledge Worker: A person who has the


ability to solve complex problems by using the
experiences and skills gained in a long learning
process. Key players in an organization are the
experts with their skills and experiences.
Quantum Organization: A new paradigm to
manage organizational transformation in a world
which is highly interconnected and where success depends wether the participant progresses
towards self-aware consciousness. This means,
that the process of transformation in an organization requires that individuals develop a self-aware
consciousness.

Small and Medium-Sized Enterprises


(SME): Enterprises which employ fewer than
250 persons and which have an annual turnover
not exceeding EURO 50 million, and/or an annual
balance sheet total not exceeding EURO 43 million. Within the SME category, a small enterprise
is defined as an enterprise which employs fewer
than 50 persons and whose annual turnover and/
or annual balance sheet total does not exceed
EURO 10 million. Within the SME category, a
micro enterprise is defined as an enterprise which
employs fewer than 10 persons and whose annual
turnover and/or annual balance sheet total does
not exceed EURO 2 million.

105

106

Chapter 7

Developing Individual Level


Outcome Measures in the
Context of Knowledge
Management Success1
Shahnawaz Muhammed
American University of Middle East, Kuwait
William J. Doll
The University of Toledo, USA
Xiaodong Deng
Oakland University, USA

abStract
Success of organizational level knowledge management initiatives depends on how effectively individuals implementing these initiatives use their knowledge to bring about outcomes that add value in their
work. To facilitate assessment of individual level outcomes in the knowledge management context, this
research provides a model of interrelationships among individual level knowledge management success measures which include conceptual knowledge, contextual knowledge, operational knowledge,
innovation, and performance. The model was tested using structural equation modeling based on data
collected from managerial and professional knowledge workers. The results suggest that conceptual
knowledge enhances operational and contextual knowledge. Contextual knowledge improves operational
knowledge and is also a key predictor of innovations. The innovativeness of an individuals work along
with operational knowledge enhances work performance. The results support the proposed model. This
model can potentially be used for measuring knowledge management success at the individual level.
DOI: 10.4018/978-1-60566-709-6.ch007

Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

introduction
At an organizational level, an important aspect of
knowledge management (KM) success is to have
systems and processes that enable getting the right
information to the right person at the right time
(Jennex, Smolnik & Croasdell, 2007). How these
systems and processes impact an individuals
knowledge and the subsequent work outcomes
are an equally important aspect, if not of greater
significance. One of the most important objectives
of various organizational systems and processes
is to empower individuals to take informed actions that will create value for the organization.
A pragmatic view of individual knowledge and
how it is related to other performance outcomes is
lacking in the literature. This research addresses
this gap and empirically tests a model of individual task knowledge and its relationship with
other individual level outcomes in the context of
KM success.
A significant amount of KM success literature
focuses mainly on systems and processes; often
with little emphasis on the individual who use these
systems to solve problems and create value (Guo
& Sheffield, 2006). Knowledge is often viewed
as an organizational resource that has to be managed well in order to gain competitive advantage.
Such an organizational view of knowledge is
comparable to the resource based view of the firm
(Grant, 1996; Grover & Davenport, 2001). From
the organizational view of knowledge, specific
processes and systems including information systems (IS) are used to manage this organizational
resource. These processes and systems often form
the key elements of most organizational level
KM initiatives. In the KM literature, knowledge
is seldom studied as an individual resource that
improves the individuals productivity and innovation. Individuals productivity and innovation
can contribute to organizational success.
Several researchers acknowledge the importance of individual knowledge in the implementation and success of organizational level KM

initiatives (Grant, 1996; Grover & Davenport,


2001). The task-related knowledge of individuals
can be considered as a critical component of how
individuals act to create value for organizations.
This task knowledge reflects the individuals
knowledge related to their work. The task knowledge accumulates over time and may include the
learning that takes place within the organizational
context (Kim, 1993; Nonaka & Takeuchi, 1995).
The lack of a broader understanding of KM and
its outcomes at the individual level can potentially
hamper the overall research efforts in this field
(Guo & Sheffield, 2006). Acknowledging that
there are different types of task knowledge, we
contend that enhanced task knowledge should
be one of the primary outcomes of individual
knowledge management. We further explore the
various dimensions of task knowledge, their interrelationships, and relationships with other relevant
individual outcomes in an organizational context
such as individual performance and innovation.
Within a broader context of KM success at the
organizational level, we focus on the individual
level to examine the task knowledge and performance outcomes and their relationships. Organizational and individual factors that contribute
to the individual KM outcomes are discussed.
Specifically, we focus on (1) developing measures
of task knowledge, which includes conceptual
knowledge, contextual knowledge, and operational knowledge, (2) exploring the relationships
among the three types of knowledge, and (3)
relating the various dimensions of individual task
knowledge to the innovation and performance of
individual knowledge workers.

Knowledge ManageMent
SucceSS
KM success is viewed from many different
perspectives in the KM literature. From an IS
perspective, KM success is often equated with
knowledge management system (KMS) success.

107

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

Figure 1. A model of knowledge management success at the individual level

Those who adopt this perspective have often used


the DeLone and McLean (1992, 2003) IS success
model to model KMS success (Jennex & Olfman,
2006; Kulkarni, Ravindran & Freeze, 2006; Wu &
Wang, 2006). Ambiguity exists among researchers in equating KMS success with KM success
(Jennex et al., 2007). Jennex et al. (2007) details
the concept of KM success from many widely
adopted perspectives in the KM literature and
provides an integrated definition of KM success
as ...capturing the right knowledge, getting the
right knowledge to the right user, and using this
knowledge to improve organizational and/or individual performance. KM success is measured using
the dimensions of impact on business process,
strategy, leadership, efficiency and effectiveness of
KM processes, efficiency and effectiveness of the
KM system, organizational culture, and knowledge
content. (p. 6). This is a much broader definition
and captures many of the essential elements that
embody such an important concept in KM.
Given the multi-faceted nature of KM success
as defined above, it might be a challenge to capture
the entire concept in one instrument development
effort. Further, various aspects highlighted in this
definition might be more applicable in different contexts. In another study that summarized
explicit and implied KM success measures in
the literature, Anantatmula and Kanungo (2006)
identified a host of KM outcomes ranging from

108

better employee skills to increased share price.


They classified these outcomes into five categories
consisting of employee performance, organizational performance, business performance, market
performance and intellectual capital. In this study,
different respondents rated different outcomes
as most important for them. This suggests that
the appropriateness of using a specific outcome
measure may be context dependent.
A key aspect of Jennex et al.s (2007) definition is that the knowledge captured, distributed,
and used should improve organizational and/or
individual performance depending on the context
in which it is applied. The definition implies that
there could be aspects at both the organizational
and individual level that contributes to KM success. In this chapter, we focus on the definition and
measurement of the individual level performance
outcome in the context of KM success as defined
here. In Figure 1 below, we show how individual
level KM success relates to organizational level
factors.
At an organizational level, KM success and
the factors that contribute to this success are often
used interchangeably in the literature (Jennex et
al., 2007). Jennex and Olfman (2005) have shown
a need to separate the critical success factors (CSF)
from the outcomes of KM success at an organizational level. From their perspective, success
factors are aspects of the organization or the en-

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

vironment that are required for KM to succeed


and should be viewed as distinct from the outcomes. They identify twelve such success factors
that include knowledge strategy, technical infrastructure, and organizational culture/structure
which are crucial to the success of any KM implementation.
The organizational level CSFs affect individual behaviors by creating conducive or adverse
work environments. From a KM perspective, these
factors enable or deter behaviors related to how
individuals manage their knowledge. In a work
setting, knowledge management behaviors of
an individual can include processes involved in
knowledge creation, knowledge sharing, knowledge access, knowledge capture, and use of that
knowledge (knowledge application). By engaging
in these sustained behaviors or practices, individuals should be able to improve their work related
knowledge and reap the associated benefits. These
individual level benefits such as productivity gains
and innovations form the basis of organizational
level outcome or impacts (Delone & McLean,
1992). This is especially pronounced in the context of knowledge work where individual work
is primarily interfaced with information systems
and KM success is often equated to KMS success.
For the vast majority of the respondents,
Jennex et al. (2007) found that KM success was
viewed as a multidimensional construct including
both the process and the outcome. This was also
identified by Anantatmula and Kanungo (2006)
as KM success factors and KM outcomes where
KM success factors can be viewed as facilitating
factors for a KM initiative (p.27). In developing
an outcome measure, it is essential that the process that generates the outcome be delineated as
clearly as possible. This enables us to examine the
process and, if possible, prescribe interventions
to positively affect the outcomes. Accordingly, in
this chapter we focus on the individual level KM
success outcomes and examine the interrelationships between them, while showing how it relates
to the individual level KM processes (Figure 1).

In the definition of KM success proposed


by Jennex et al. (2007) knowledge content is an
important aspect. For a successful KM process
or initiative, it is imperative that such initiatives
enhance knowledge content at both individual and
organizational levels. This implies that KM success necessitates that individuals in the organization become more knowledgeable and transforms
that knowledge to performance gains that are of
value to such organizations.
To capture individuals task-related knowledge
in an organizational context, we conceptualized
task knowledge as having conceptual, contextual,
and operational factors based on Yoshioka, Herman, Yates and Orlikowskis (2001) knowledge
framework for communicative actions. Conceptual knowledge (know-why) is an individuals
understanding of why specific actions need to be
taken to complete the task (Kim, 1993; Schultze
& Leidner, 2002). Contextual knowledge is an
individuals understanding of the contextual
factors surrounding the task at hand, such as the
knowledge related to the people (know-who),
locations (know-where), and timing (know-when)
(Earl, 2001; Pomerol, Brezillon & Pasquier,
2002). Operational knowledge is an individuals
understanding of task requirements (know-what)
and the processes of how to accomplish the task
(know-how) (Dhaliwal & Benbasat, 1996; Pfeffer & Sutton, 1999). If individuals have the right
knowledge at the right time, appropriate value
added and creative actions can be enacted.
Although possessing knowledge is desirable, individuals should also be able to use the
knowledge to make their work more innovative
and productive, ultimately adding value to the
organization. Thus, in addition to the task knowledge, we focus on innovation and performance.
Innovation is the extent to which an individuals
work is novel and creative. Performance is how
well an individuals work is done in terms of efficiency, effectiveness, and quality of work.
Figure 1 clarifies the focus of this chapter by
showing the individual knowledge management

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Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

outcomes or success measures in the context of the


larger process which shapes these outcomes. We
suggest that the organizational contextual factors
such as the knowledge management initiatives
and systems influence individual level knowledge
management practices. These practices lead to
enhanced task knowledge and should improve
an individuals innovation and performance. The
focus of this chapter is on the KM outcomes of the
individual as indicated in the shaded area in Figure 1. These individual knowledge management
outcomes may serve as indicators of individual
level KM success. In the next section we explore
the various aspects of these individual level KM
outcomes and their interrelationships.

indiVidual leVel outcoMeS


for KM SucceSS
As discussed in the earlier section, knowledge content is an important aspect of KM success (Jennex
et al., 2007) that we focus on in this chapter. Knowledge itself is a complex construct that is subjected
to a wide range of interpretations. Knowledge
could be viewed from an organizational perspective or from an individual perspective. Despite a
substantial interest in organizational level knowledge and its link to organizational success, there is
a widespread recognition that individuals are the
essential unit of the knowledgeable entity. Even
for knowledge to be considered at the organizational level, knowledgeable individuals within the
organization who collect, codify, and share their
knowledge need to be considered (Grant, 1996;
Davenport & Prusak, 1998).
There are several aspects of knowledge such
as content, volume, detail, form, value and tacitness/explicitness (Chilton & Bloodgood, 2008).
Certain aspects may be more appropriate in certain
situations. At other times, a multi-dimensional
measure may be more appropriate. KM success
at the individual level implies that the individuals
knowledge is enhanced in aspects which generate

110

value to the organization. It may include being


better skilled at doing the job or enhancing the
intellectual capital (Anantatmula & Kanungo,
2006) or task knowledge of an individual. KM
success also implies that individuals translate
their knowledge to productive outcomes which
the organizations value. Even though organizations often measure their employees knowledge
in the context of their work, there are few studies
that have tried to measure knowledge in any of
its aspects for theory building and testing (with a
notable exception of Chilton & Bloodgood, 2008).
In this chapter we focus on the individual knowledge as content in the context of their work and
call this task knowledge. Further, the relationship
between their task knowledge and other productive outcomes such as the innovativeness of their
work and their performance are also explored.

dimensions of task Knowledge


Traditionally, task knowledge is measured based
on skill tests or tests that are specific to each
kind of job. This approach might be appropriate in certain situations but is limited as a broad
measure applicable across a wide range of tasks.
This is similar to the tests that students take at the
end of a particular course to assess their learning
during a given period of time. Such assessment is
limited in usefulness for research that is designed
to test substantive relationships among broad
measures for building or testing theory. Further,
the assessment itself is limited to the knowledge
contained in such tests and the knowledge base
largely needs to be defined a priori. Such a priori
and narrow definition of ones knowledge base
may not be realistically achieved in a constantly
changing environment on an ongoing basis (Cohen, 1998), and may also be dependent on the
situation to which it is being applied (Chilton &
Bloodgood, 2008).
Here we define task knowledge as what an
individual knows in relation to a particular task at
a specific point in time; equating it to what ones

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

Figure 2. Knowledge management outcomes, definitions and relevant literature

mind holds as his/her mental model (Kim, 1993).


Building upon the 5W1H paradigm of communicative questions why, who, when, where, what,
and how (Yoshioka et al., 2001), we conceptualize
knowledge pertaining to a task to be traceable to
these questions. These questions probe the conceptual, contextual, and operational knowledge
involved in a task (see Figure 2).
Conceptual knowledge pertaining to a task is
the deeper understanding of why the person is
engaged that task and why it has to be done the
way it is expected to be performed by that individual. This type of knowledge is often referred
to as know-why (Agarwal, Krudys & Tanniru,
1997; Garud, 1997; Schultze & Leidner, 2002).
Wiig and Jooste (2004) point to the importance

of such conceptual knowledge when they refer to


the metaknowledge in their classification of task
knowledge. According to Kim (1993), know-why
implies the ability to articulate a conceptual understanding of an experience. It can be viewed as
the basic framework that helps individuals to build
or connect other information as they create mental models of how the world operates. Know-why
is also sometimes referred to more broadly as the
understanding of the principles and laws of nature
in human mind and in society (Johnson, Lorenz
& Lundvall, 2002).
Contextual knowledge in relation to a task is
the knowledge that may not be necessarily central
to the satisfactory execution of that task, but may
be peripherally related to it. It may be considered

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Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

as the background knowledge with respect to a


particular task (Pomerol et al., 2002). Often this
knowledge is centered on the (1) knowledge
regarding the people that may be involved or
affected by that task (know-who: for example,
knowledge regarding the customers and stakeholders) or such information as who knows what
and who knows what to do (Johnson et al., 2002;
Rulke & Galaskiewicz, 2000), (2) knowledge regarding the location of the task or the location of
the information about the task (know-where: for
example, where can I get appropriate resources
to accomplish the task), and (3) the knowledge
regarding the temporal aspects of the task (knowwhen: for example, when should each aspect of
the job be done). Such knowledge helps embellish and enrich the operationalization of an act in
addition to providing a broader knowledge base
for innovative ideas (Earl, 2001).
Operational knowledge is the core knowledge
that is needed to accomplish a task satisfactorily.
This is also sometimes referred to as problemsolving knowledge or domain knowledge (Dhaliwal & Benbasat, 1996). This core minimum
knowledge regarding the task involves know-what
and know-how, which is sometimes referred to
as declarative and procedural knowledge (Garud,
1997; Schultze & Leidner, 2002). Know-what is
the knowledge regarding what needs to be done
in accomplishing a task successfully (Johnson et
al., 2002). Know-how is the knowledge regarding
how that task needs to be performed (Johnson
et al., 2002). Without at least a cursory idea of
this operational knowledge it is unlikely that the
individual will be able to complete his/her tasks
satisfactorily (Kogut & Zander, 1992; Nonaka &
Takeuchi, 1995; Pfeffer & Sutton, 1999).

Productivity benefits
This study examines a model of KM success at the
individual level and hence individuals are the unit
of analysis. In our model of KM success, in addition to the task knowledge we consider individual

112

performance and innovativeness of an individuals


work. Performance and innovativeness are well
accepted measures that are used in the literature to
assess knowledge worker success. Organizations
also value employees who are knowledgeable in
their work. They value them not necessarily by
virtue of their knowledge alone but because they
expect such individuals to be productive in what
they do. However, the value of knowledge gained
is often difficult to measure directly (Cohen, 1998).
Therefore, existing studies have used more indirect
measures when assessing the impact of knowledge
related activities (Janz & Prasarnphanich, 2003,
2005). Our measures of task knowledge would
be a contribution to the literature in this respect
and would have a greater validity as a component
of individual level KM success if it enhances the
more traditional measures of KM success such as
performance and innovation.
Innovation is one of the important individual
activities through which organizations create
value (Scott & Bruce, 1994; Van De Ven, 1986).
Scott and Bruce (1994) find that creativity and
innovation are often used interchangeably. They
argue that innovation is not only the creation of
new ideas but also the use of such ideas to create
new work productions or processes. Creativity is
a central aspect of all innovations. Creativity is
often defined as the production of ideas, products
and procedures that are novel and useful to the
organization (Amabile, 1996; Madjar, Oldham
& Pratt, 2002), as opposed to creative behavioral
traits of the individual. Accordingly, the focus here
is on the novelty of the external artifact rather
than the internal behavioral trait. It may involve
recombination of existing ideas, materials, and
processes or introducing new ideas, materials,
and processes (Madjar et al., 2002).
Having the right knowledge should enhance
quality and reduce the variability of task performance (March, 1991). For example, in a new
product development context, existing knowledge
of the firm, conceptualized as organizational
memory, is found to affect information acquisi-

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

Figure 3. Relationships among individual knowledge management success outcomes

tion efficiency resulting in new product performance (Brockman & Morgan, 2003). In a study
of IS professionals in knowledge management
context, Janz and Prasarnphanich (2003) used
team performance along three dimensions of efficiency, effectiveness and timeliness. This was
based on outcome measures primarily conducted
in job characteristic studies and learning, and can
be applicable to both individual and team levels
(Edmondson, 1999; Hackman & Oldham, 1980).
Here we adapt Janz and Prasarnphanichs measure
of team performance and operationalize individual
knowledge worker performance comprising of
efficiency, effectiveness and quality of work.

relationSHiP aMong KM
SucceSS outcoMeS
Figure 3 shows the relationships among the
individual level KM success outcomes considered in this chapter and the subsequent research
model, which include task knowledge and individual productivity benefits. The types of task
knowledge include conceptual, contextual, and
operational knowledge. Productivity benefits
include innovativeness of an individuals work
and performance outcomes. Subsequent discus-

sions explore these relationships and propose the


associated hypotheses.
Not all the three types of task knowledge may
have a direct impact on performance and innovation. Clearly, conceptual knowledge provides the
basic mental framework that is needed to build
and acquire other types of knowledge that may
be needed to accomplish various tasks. In describing individual learning, Kim (1993) describes
learning leading to conceptual knowledge as that
which challenges the very nature or existence of
prevailing conditions, procedures, or conceptions
and leading to new frameworks in the mental
model (p.40). Conceptual knowledge orients
individuals with the world in which they interact
and thus helps to integrate other types of knowledge into their mental models. We therefore,
model conceptual knowledge as that which primarily impacts the other forms of knowledge.
In a process model, like Kims (1993) OADI
model, operational and conceptual learning contributes to each other. It is possible to envision the
three types of task knowledge as contributing to
each other. In a causal model, it is more plausible
to view conceptual knowledge as a more primal
form of knowledge that drives operational and
contextual knowledge. Our model of individual
knowledge management success outcomes (see
Figure 3 below) uses a causal model perspective.

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Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

It hypothesizes only the most likely and theoretically prominent linkages from task knowledge
constructs to productivity benefits.
Conceptual knowledge, which is a deeper and
broader understanding of why a task is performed,
may not always be necessary to accomplish many
aspects of a knowledge workers job satisfactorily.
But having such knowledge provides a sense of
purpose and motivation in performing the task in
the best possible manner by enhancing know-what
and know-how (Agarwal et al., 1997). This broader
understanding also helps the individual contextualize his or her actions in the larger scheme of
things, and helps draw on appropriate and useful
information in novel and useful ways (Kim, 1993).
Conceptual knowledge helps the individual look
at his/her actions from higher levels of abstraction. Being able to conceptualize the task from a
higher level of abstraction means being able to
make richer connections with other knowledge
that may or may not be immediately necessary
for the execution of the task at hand, and hence,
enabling the creation of a richer context for the
execution of that task (Gasson, 2005; Johnson et
al., 2002). Thus we contend:
H1:The higher the conceptual knowledge of an
individual, the higher the operational knowledge
of the individual.
H2:The higher the conceptual knowledge of an
individual, the higher the contextual knowledge
of the individual.
Know-who, know-where, and know-when
knowledge creates a rich background for individual actions to take place. Even in situations
where the task is primarily centered on this type
of knowledge, there still exists a potential to draw
upon more of such background information. Such
knowledge helps in contextualizing and enriching
the primary information that individuals need to
use in any of their organizational actions (Johnson
et al., 2002). The greater contextual knowledge

114

individuals can bring to bear, the better the individuals can embellish their direct task-related
knowledge. Especially in todays knowledge
intensive environment there is an increasing need
to combine knowledge from multiple domains
(Gasson, 2005). Thus, we hypothesize:
H3:The higher the contextual knowledge of an
individual, the higher the operational knowledge
of the individual.
A key aspect of being innovative in the work
place is the ability to generate and apply creative
and useful ideas in ones work. Creative artifacts
originate from ideas in an individuals mind.
Novelty is the hallmark of a creative production
and requires that individuals connect disparate
knowledge in novel ways in their minds. Wiig
and Jooste (2004) indicate that having broader
task knowledge should provide more innovative work outcomes. Rich contextual knowledge
provides the potential for the individuals to draw
upon seemingly unimportant data to connect
them in novel ways to the task at hand. Knowing
who the stakeholders are and understanding their
needs and expectations can positively contribute
to making the outcomes of a knowledge workers
actions useful, novel, and interesting. Being able
to easily access knowledge about where to get
appropriate resources and information regarding
a particular task, and knowing when to use such
information and take appropriate actions can help
the individuals ease the task of performing those
actions. This frees their mental prowess for more
creative work. Further, it is often essential to
make use of disparate, multi-domain contextual
information to produce hybrid and novel solutions
(Engestrom, Engestrom & Karkkainen, 1995).
Thus, we contend:
H4:The higher the contextual knowledge of an
individual, the higher the innovativeness of the
individuals work.

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

Operational knowledge is the primary knowledge that an individual needs to have in performing
the task. This knowledge includes knowing what
needs to be done to accomplish a task and how to
do it. When an individual has such information
readily accessible to his or her mind, performing
the task becomes substantially effortless. Wiig and
Jooste (2004) contend that having such knowledge
and understanding provides workers with the basic
ability to be efficient. When more such information
is available, the implementation of such actions
becomes more effective and efficient. In this case,
the individual can focus on performing the task
with efficiency, effectiveness, and quality.
H5:The higher the operational knowledge of
an individual, the higher the individuals work
performance.
Organizational productivity gains are achieved
by making people work more efficiently through
many work improvements including better innovations (Wiig & Jooste, 2004). Especially, in
non-routine work such as in knowledge work,
innovations of individuals create procedures and
artifacts that help them accomplish the task faster
and more effectively (Scott & Bruce, 1994; Van
De Ven, 1986). Over time, even small innovations
in work can accumulate to produce significant
performance improvement for the individual and
the firm. Thus, we hypothesize:
H6:The higher the innovativeness of an individuals work, the higher will be the individuals
work performance.

reSearcH MetHodS
A cross-sectional survey design was used to
collect the data to test our model. In developing
and refining the new measures, a pretest of the
measurement items were conducted followed by
a pilot test. Pilot test involved a small scale data

collection and assessment of validity, dimensionality, and reliability of the scales. Subsequently, a
large scale data collection targeting managerial and
professional knowledge workers was implemented
using a web-based questionnaire. The following
sections briefly describe the pilot, the large scale
sample, and the measurement development. The
structural equation modeling software package
LISREL is employed for measurement assessment
and for testing the structural model and hypotheses.

Pilot testing
A pilot test was performed based on 53 responses
obtained out of 68 survey requests from knowledge workers in the United States. Twenty four
responses were received from the individuals
working in the various functions within organizations involved in design, manufacturing or
consulting and the rest of the 29 responses were
received from MBA students working for various manufacturing firms. The respondents were
identified by their managers or themselves as
knowledge workers who used information technology heavily for their daily work. The pilot stage
data analysis involved item purification using
corrected item-total correlation (CITC) scores,
evaluation of unidimensionality using principal
component factor analysis, evaluation of convergent and discriminant validity using structural
equation modeling, and reliability assessment
using Cronbachs alpha. Items pertaining to each
construct were modified or eliminated based on
the feedback from the pilot results.

large Scale Sample


To implement the large scale data collection, a
web based survey was implemented. Compared
to a traditional mail survey, the web based survey
is faster, involves no data transcription errors, and
is less costly. An email list from Manufacturers
News Inc targeting individuals in engineering,
management, or information technology functions

115

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

within U.S. manufacturing industries (represented


by NAICS codes starting with 31, 32 and 33)
were used. Individuals in these areas are generally
considered as knowledge workers and represented
our target population.
This Manufacturers New Inc list includes a
wide variety of knowledge workers within manufacturing firms. We used this email list because of
the versatility that it offered in selecting the target
respondents. This data was collected as part of the
requirements for a Ph.D. degree in manufacturing
management. This list was used because the data
set had to be of broad interest and relevance to
manufacturing executives.
Email lists from such vendors can have a
large proportion of emails that are not current or
individual specific and may not effectively reach
the intended respondent in spite of their claims
of various efforts to ensure quality of the list. In
order to mitigate this problem to some extent,
we implemented tracking of click-throughs on
the site hosting the survey based on the email
invitations sent out. Click-throughs represent all
the individuals that clicked on the survey link in
the email including those who did not attempt
the survey. This would better represent the actual
number of individuals the email request reached
since such unsolicited emails for survey have a
tendency to be automatically junked or blocked
by organizational firewalls. Because of the traditionally low responses that are typical of such
open email lists, 24,279 emails were sent out
from this list, out of which 9,386 were returned
undeliverable due to non-existent emails or server
errors. After administering two waves of emails,
252 usable and complete responses were obtained
(140 in the first wave and 112 in the second wave)
yielding a 31.6% response rate based on the 797
click-throughs, and 1.7% based on the number of
emails sent without counting the undeliverables.
Respondents include individuals from a wide
range and size of industries. The majority of the
respondents were professionals, middle management, or executive positions. Non-response bias is

116

evaluated using a Chi-square test of goodness-offit of various demographic variables between the
first and second wave of data collection (Smith,
1983). Results indicated no significant difference
(p-value > 0.10) between the various demographic
variables. Measures were then evaluated in steps
similar to the pilot stage involving item purification, evaluation of factor structure, unidimensionality, and convergent and discriminant validity.

Measures
Respondents were asked to answer the survey
items based on a particular project or an assignment, or based on their work during the last six
months if they did not typically work on a specific
project. Providing a more specific framework as
mentioned above was expected to help respondents
recall the work situation and answer the questions
with a more consistent frame of reference. It is
important to provide such a consistent framework
to elicit the level of respondents knowledge within
the specified duration because conceptual and
contextual task-knowledge at any given time may
be the result of knowledge that may have been
accumulated over a long period of time, whereas
the operational knowledge is often acquired
closer to when the task needs to be performed.
The specific measures for the three dimensions
of task knowledge uses a five point Likert type
scale where 1= None or to a very little extent
and 5= To a very great extent (see Appendix A).
Innovation was measured using three items (see
Appendix A) based on Oldham and Cummings
(1996) creative performance and Scott and Bruces
(1994) innovative behavior with a focus on the
work outcome. The performance measure was
adapted from Janz and Prasarnphanichs (2003)
measure used in a team performance context.
Here it was adapted to focus on the individual as
the unit of analysis.
For innovation, a seven point Likert type scale
ranging from 1= Not at all to 7= To an exceptionally high degree was used. A scale ranging

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

from 1= Strongly disagree to 7= Strongly


agree was used for performance. The final items
for each construct after purification and measurement analysis are listed in Appendix A.

reSultS
First, the data was examined using exploratory
factor analysis to validate that the five factors
had a simple structure. Next, data was analyzed
using LISREL in a two step process (Anderson &
Gerbing, 1988) where (a) the measurement model
is evaluated and then (b) the structural model is
evaluated. In step (a) descriptive statistics were
presented along with the analysis of reliability,
convergent validity and discriminant validity of
the measures. In step (b), the structural model
was evaluated to test the substantive hypotheses
H1 through H6.
Common method bias introduced due to the
measurement of both independent and dependent
variable using a single source is an important issue
in similar studies. Several procedural and statistical approaches are available to minimize or even
eliminate such bias (Podsakoff et al., 2003). We
used these procedural approaches such as providing anonymity in responding to the survey, improving the scale items through piloting it before the
large scale, and counterbalancing by randomizing
the order of dependent and independent variables.
Statistical remedy suggested by Podsakoff et al.
(2003) by using Harmans single factor test also
suggested that the common method bias was not
a significant issue.

factor analysis
All the items were factor analyzed with five factor
specified, oblimin rotation, and maximum likelihood extraction. The five factor solution yielded
a simple structure with all the items loading on
their respective factors. Figure 4 below reported
the results of factor analysis with the factors sorted

in the descending order with the strongest factor


listed first. No cross loadings were above 0.30.
The two lowest factor loadings were for items
OPER3 (-0.517) and CONT5 (0.576). All the
other items loaded on their respective constructs
with loadings above 0.60.

Measurement Model results


The descriptive statistics, Cronbachs alpha, average variance extracted (AVE) and correlations
between the variables were reported in Figure 5
below. The means ranged from 3.99 for contextual
knowledge (on a 5 point scale) to 5.85 for performance (on a 7 point scale). The standard deviations ranged from 0.66 for contextual knowledge
to 1.24 for innovation. The skewness values were
between -2 and +2 and the kurtosis values were
all lower than 5.0, suggesting that the scales do
not violate the assumption of normality.
The Cronbachs alpha indicated adequate reliability and ranged from 0.81 for operational
knowledge to 0.94 for conceptual knowledge.
Correlations ranged from 0.14 to 0.59, and were
all significant at p-value < 0.01 except for the
correlation between operational knowledge and
innovation (0.14) which was significant at pvalue < 0.05.
AVE scores ranged from 0.53 for contextual
knowledge to 0.80 for conceptual knowledge.
Scores above 0.50 are an indication of convergent
validity. Convergent validity was also assessed
by how well the items load on their respective
latent variable. Figure 6 below shows standardized
item-factor loadings for all the five constructs. All
standardized item-factor loadings were 0.70 or
higher, except for one item for contextual knowledge (which had a loading of 0.69), indicating
good convergent validity for the items measuring
each of these constructs. Further, all loadings were
significant at p-value < 0.01.
An analysis of AVE scores and the squared
correlations in Figure 5 indicated that the AVE
scores were greater than the square of the correla-

117

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

Figure 4. Exploratory factor analysis: Pattern matrix with maximum likelihood extraction and oblimin
rotation

Figure 5. Reliability, convergent validity and discriminant validity of task knowledge and performance
measures

118

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

Figure 6. Combined Measurement and Structural Model: Standardized Solution in LISREL

tion between the focal factor and other factors,


suggesting adequate discriminant validity. A more
rigorous chi-square (2) test of discriminant validity indicates whether a unidimensional rather than
a two-dimensional model can account for the
inter-correlations among the observed items in
each pair. For ten comparisons, the chi-square
value for the test of discriminant validity between
pairs of latent factors must be equal to or greater
than 10.83 for significance at p-value 0.01. Chisquare difference between the correlated model
and the measurement model with correlations
fixed to 1 indicated that all values were significant
at p < 0.01 (see Figure 5 above), suggesting discriminant validity between all pairs.
The five factor correlated measurement model
was judged to have good model-data fit with 2
= 186.47 for 125 degrees of freedom (chi-square
per degree of freedom = 1.49), Root Mean Square
Error of Approximation (RMSEA) = 0.044, NonNormed Fit Index (NNFI) = 0.97, and Compara-

tive Fit Index (CFI) = 0.98. Values of RMSEA


less than 0.05, and NNFI and CFI values above
0.95 indicate good model-data fit (Hu & Bentler,
1999). All items had item-factor loadings greater
than 0.69 (p-value < 0.01). The largest modification index (12.05) in the structural model was an
error correlation between two items in conceptual
knowledge. The expected value of the change for
this modification is only 0.05. There were also
two cross-loadings to conceptual knowledge,
the expected value of change for the larger one
of the two was 0.19, indicating a relatively weak
cross loading as compared to a much stronger
standardized loading on the respective constructs.

Structural Model results


In order to test the substantive hypotheses a
combined measurement and structural LISREL
model was developed (see Figure 6 below). The
result of this analysis was used to accept or reject

119

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

the hypotheses based on the significance of the


standardized structural coefficients of the relationships. In order to evaluate the significance of the
structural coefficients, a reasonable model-data
fit is necessary and was evidenced based on the
various fit statistics.
Examination of the various absolute and
relative fit indices indicated good model-data
fit with a chi-square of 197.58 for 129 degrees
of freedom, chi-square per degrees of freedom
= 1.53, p-value = 0.0001, RMSEA = 0.046,
NNFI = 0.97, and CFI = 0.98. Figure 6 below illustrates the structural relationships () between
the exogenous variable conceptual knowledge
and the endogenous variables () operational
knowledge and contextual knowledge. It also
depicts the structural relationships () between
operational knowledge and contextual knowledge
with performance and innovation. Evaluation of
modification indices indicated three correlations
among error terms. These correlated error terms
were relatively weak with the largest modification
index being 11.43 between CONC3 and CONC4.
No structural modifications or crossloadings were
suggested. Given the good model-data fit, the
proposed hypotheses were evaluated.
All the hypotheses proposed were supported
(p-value <0.01) by the results of the data analysis.
It is widely accepted that having better knowledge can improve ones work performance. This
research investigated the types of task knowledge
that can impact specific individual work outcomes
and the possible inter-relationship between types
of task knowledge.
Conceptual knowledge had a strong path coefficient to both operational knowledge ( = 0.24,
t = 3.03) and contextual knowledge ( = 0.63, t
= 8.38). Thus, Hypothesis H1 and H2, indicating
that a higher level of conceptual knowledge will
positively enhance the operational and contextual
knowledge of the individual were supported.
The results confirmed the widely held belief that
knowledge related to a deeper understanding of
why knowledge workers do certain actions can

120

actually equip them with better knowledge to


do such actions. Contextual knowledge also had
a strong path coefficient ( = 0.55, t = 5.72) to
operational knowledge. Thus, Hypothesis H3
(The higher the contextual knowledge of an individual, the higher the operational knowledge of
the individual.) was supported. This suggests that
if individuals are able to draw on a richer context
for a given task, the operational knowledge needed
to perform that task can be enhanced.
Hypothesized relationships leading to innovation and performance were examined next (i.e.,
H4, H5, and H6). Contextual knowledge had a
strong path coefficient ( = 0.28, t = 3.86) to innovation. Hence, hypothesis H4 was supported,
suggesting that contextual knowledge positively
enhances the innovativeness of an individuals
work. This implies that as more contextual
knowledge is available to individuals; their work
outcomes may become more innovative. In other
words, they are able to generate innovative ideas
based upon a greater amount of varied and disparate information on the context of the specific
tasks. Operational knowledge had a strong path
coefficient ( = 0.43, t = 5.86) to performance
supporting H5. This suggests that operational
knowledge is a key knowledge for impacting
knowledge worker performance. Hypotheses
H6, representing the impact of innovation on
performance was also supported ( = 0.36, t =
5.44), indicating that innovative work outcomes
enable knowledge workers to be more efficient,
effective, and produce higher quality outcomes.

diScuSSion
Knowledge management success is a broad
concept when viewed from an organizational
perspective. Previous literature has identified
various factors that are considered to be critical
for KM success (Jennex & Olfman, 2005). This
includes various organizational and individual
characteristics along with aspects of the KM

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

implementation environment that influence KM


success. These are factors that contribute to an
organizations success at building knowledgebased competencies or taking advantage of the
knowledge created by individuals.
Knowledge is primarily created by individuals
and then shared among a community of knowing
in an organization. To understand and evaluate
how these factors contribute to the individual
knowledge and subsequently to KM success, it is
imperative that we are able to measure individual
knowledge and understand how it contributes to
other individual success outcomes. In the context
of how key success factors for KM impact individual behavior, this chapter provides a model of
KM success at the individual level. The model
describes how task knowledge affects productivity benefits for individual knowledge workers.
We provide a measure of task knowledge as it
relates to the individuals work. Task knowledge
consists of three dimensions: conceptual, contextual and operational knowledge. Increased task
knowledge is considered to be the enhancement
of an individuals mental model of frameworks
and routines related to their work. Hypotheses
concerning the interrelationship between these
task knowledge dimensions and their subsequent
effect on other net benefits such as innovation and
performance are tested.
The results indicate that conceptual knowledge has an indirect rather than a direct effect
on innovation and performance. Conceptual
knowledge works through contextual and operational knowledge to impact innovation and
performance, respectively. Thus, conceptual
knowledge is a necessary, but not a sufficient
condition for achieving benefits such as innovation and performance. In order to ensure that
conceptual knowledge is utilized for enhancing
innovation and performance, managers need to
combine classroom knowledge (conceptual) with
on-the-job training where individuals gain operational and contextual knowledge. Innovation and
performance improve more rapidly if conceptual

knowledge is combined with some operational


experience and some contextual knowledge of
the broader work situation.
Contextual knowledge helps enhance operational knowledge. Know-what and know-how
can be enhanced by having greater knowledge of
know-who, know-where, and know-when. This
suggests that operational knowledge may not be
fully usable for improving performance without a
specified context for action. For example, people
may know the product development process but
their success in this process will be enhanced if
they have identified a specific target market, have
better knowledge of their customers needs, and
know when the product needs to be introduced
to provide a first-to-market advantage. Previous
research has not explicitly conceptualized and
measured contextual knowledge or explored its
relationships to antecedents and consequences.
Future studies should further explore the relationship among contextual knowledge and other
important variables in knowledge work.
The results indicate that contextual knowledge
also plays an important role in enhancing innovation. For example, the knowledge of customer
requirements will help knowledge workers identify innovations that meet or exceed customer
expectations. It is likely that individuals are able
to quickly generate novel ideas to be more innovative because contextual knowledge provides
a richer background to connect disparate ideas.
The results suggest that performance is improved by either doing things more efficiently or
more innovatively. In order to improve knowledge
workers performance, managers need to consider how to mix both rational and experiential
approaches to integrate working and learning. In
the context of product development, Eisenhardt
and Tabrizi (1995) distinguish between a rational
and an experiential approach to improving performance (e.g., product development time). The
rational approach involves planning operational
processes carefully before execution to avoid
delays and to speed development, but is limited

121

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

to existing knowledge. The experiential approach


uses an iterative cycle of doing and learning to
enhance product development time as the individual learns by doing (operational knowledge)
and obtains feedback on his/her work and how
his/her part of the design work interfaces with
that of other engineers (contextual knowledge).
A mix of rational and experiential approaches to
knowledge work may enable managers to get work
done both more efficiently and more innovatively.

liMitationS and future


directionS
The results should be interpreted with caution as
they are based upon one sample. Further research
is necessary to cross validate these success measures and the structural relationship among them.
If cross validated, these instruments can be used
in future research for evaluating the effectiveness
of antecedent factors such as KM practices or
KMS CSFs. Though it is not uncommon to use
self reported measures of performance in this type
of research, measuring performance outcomes
using more objective metrics can substantially
increase confidence in the proposed model. Using the task knowledge measures developed here,
future research may explore improvements in work
outcomes based on time, quality, and quantity
dimensions such as actual time-to-completion of
respondent tasks. In addition to using objective
performance measures, using perceptual measures from supervisors or peers for the dependent
variables should also enhance confidence in the
proposed model.
Because we use a perceptual measure eliciting
respondents level of knowledge, only the knowledge that the respondents consciously reflect as
their task-related knowledge is measured in this
research. It is possible that the work related outcomes are also affected by knowledge that may
not be directly related to an individuals work.
For example, when taking up a new job, individu-

122

als bring with them a set of skills that they have


developed over time through their previous work
and life experiences. This may include processes
and thought patterns that have evolved with their
earlier experiences. These processes and thought
patterns may or may not bear directly on the requirements of the new work. Such knowledge may
have impact on their work in subtle ways, either
positively or negatively. Future research could
focus on assessing the extent of impact of such
knowledge that may not be captured in reflective
measures as used in this research.
The conceptual, contextual, and operational
knowledge dimensions seem to be valid for the
overall general task-related knowledge when
considered for a period of time such as when
accomplishing a particular project. Whether or
not such a three factor conceptualization of task
knowledge can also be demonstrated in other
more specific domains of knowledge is uncertain.
Similarly, whether the current conceptualization
of knowledge used in this research is valid when
considering broader and general human knowledge needs of other knowledge workers outside of
the manufacturing context needs to be examined.
In this chapter, we have focused on knowledge
content as a critical aspect of knowledge for determining individual performance and hence KM success. Measurement of other facets of knowledge
such as volume, form, and detail could also be
explored in future research. For example, Chilton
and Bloodgood (2008) examine the tacit-explicit
dimension of knowledge and have developed
measures for it. Researchers examining the form
aspect of knowledge may explore the effectiveness
of using and sharing different forms of knowledge
representations such as auditory, graphical, video,
and textual forms in various situations. Further,
the forms of knowledge representation that are
effective in specific situations and their interrelationships may also be explored.
Another possible avenue for research is to
examine the applicability of the current model of
knowledge management success measures used

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

here at the team and organizational levels. The


impact of different dimensions of individual task
knowledge on other team and organizational level
factors such as team-building capability, ability to
foster stronger ties with their immediate customer,
and contribution to organizational intellectual
capital may also be investigated in subsequent
research. Though a greater data collection effort
may be needed for such investigations, a wealth
of statistical tools such as hierarchical linear modeling should facilitate such multilevel analysis.

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endnote
1

126

A previous version of this article was presented at the January 7-10, 2008, 41st Annual
Hawaii International Conference on System
Sciences.

Developing Individual Level Outcome Measures in the Context of Knowledge Management Success

aPPendix a: MeaSureMent iteMS for taSK


Knowledge and PerforMance outcoMeS

127

128

Chapter 8

Validating Distinct
Knowledge Assets:
A Capability Perspective
Ron Freeze
Emporia State University, USA
Uday Kulkarni
Arizona State University, USA

abStract
Identification and measurement of organizational Knowledge Management capabilities is necessary to
determine the extent to which an organization utilizes its knowledge assets. We developed and operationalized a set of constructs to measure capabilities associated with management of knowledge assets
identified as distinct Knowledge Capabilities (KCs) comprising the overall Knowledge Management
(KM) capability of an organizational unit. Each KC represents a distinct kind of knowledge that requires
different organizational process and technological support. This delineation of knowledge allows targeted improvement to a specific KC. We present validation of these capability constructs with empirical
evidence from two separate business units in a large semi-conductor manufacturing company, providing
the basis of measurement standardization for KM Capability improvement. Confirmatory factor analysis
affirmed four KCs, each identified as an overall factor influencing a set of latent descriptor variables.
Second Order and General-Specific Structural Equation Models of each capability provide evidence
as to the validity of measurement of these knowledge assets. A standardized instrument for measuring
knowledge capabilities would not only allow benchmarking, but also allow tracking capabilities over
time and linking them to those performance metrics that are deemed appropriate by the organization.

introduction
The quest to leverage knowledge assets through
effective Knowledge Management (KM) is a
strategic initiative for many firms. Management
DOI: 10.4018/978-1-60566-709-6.ch008

literature has noted the lack of effective management of knowledge and called for establishing
quantitative measures for these intangible assets
(Teece, 1998; Zack, 1999b). Unfortunately, most
KM initiatives in reality have been information
projects that result in only the consolidation of
data and not much by way of improvements in

Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

Validating Distinct Knowledge Assets

knowledge flows or knowledge sharing (Gold et


al., 2001). In an attempt to assess the contribution of IS/IT initiatives to a firms sustainable
competitive advantage, researchers in the IS
domain have looked at IT resources and capabilities through the lens of the Resource Based
View of the firm (Barney, 1991; Melville et al.,
2004). Both IS and KM researchers have viewed
resource and capability investments as impacting
organizational effectiveness (Tanriverdi, 2005).
However, a consistent shortcoming has been the
inadequacy in measurement of these resources
and capabilities (Wade and Hulland, 2004). In
order to evaluate KM initiatives and their ability
to leverage knowledge assets, firms must focus
on the identification and measurement of specific
knowledge assets and the capabilities that they
represent within an organization. Only through
adequate conceptualization of knowledge and
measurement of capabilities associated with its
management can firms begin to tie knowledge
assets to value generating outcomes. Thus, capability measurement is the logical first step in
justifying investments in KM projects that can
ultimately move the firm towards a sustainable
competitive advantage.
Knowledge assets are grounded in the experience and expertise of individuals (Teece, 1998).
The ability of an organization to use them has
been portrayed as a type of organizational capability in prior research. We use the term KM
Capability to refer to this overall organizational
capability. The conceptual development of KM
Capability can benefit from the rich theoretical
literature on capability research which associates
organizational capabilities (of various kinds) with
its performance (Gold et al., 2001; Santhanam and
Hartono, 2003; Zhu, 2004). Knowledge is still a
highly nebulous and debated concept in business
literature and it collectively covers a wide range
of intangible assets. For this reason it is desirable
to classify this concept into multiple types and
try to study the capabilities associated with each
type separately.

Research efforts at understanding KM Capability and its association with organizational effectiveness have attempted to define multiple KM
related constructs. Gold et al. (2001) proposed that
the overall KM Capability consists of knowledge
process capability and knowledge infrastructure
capability with both impacting organizational
effectiveness. In their model, process capability
incorporates the stages of lifecycle through which
knowledge progresses. The knowledge infrastructure capability includes technology, structure and
culture as its building blocks. Their notion of
organizational knowledge views all knowledge
similarly and fails to recognize different types of
knowledge that KM Capability must incorporate.
Tanriverdi (2005) presents KM Capability as a
second order capability comprised of an organizations Product, Customer and Managerial KM
Capability. Each of these first order constructs
comprised four stages of the knowledge lifecycle.
In this case, generic forms of the knowledge lifecycle stages have been used for each first order
construct which implies a separation of processes.
We assert that organizational knowledge covers
a wider range of assets and propose that different types of knowledge assets require different
organizational processes and technology support
to be utilized effectively.
Another significant attempt at conceptually
defining a framework for measuring KM Capability is the Cognizant Enterprise Maturity Model
(CEMM) that introduced the concept of measuring
15 Key Maturity Areas within an organization to
improve its business value through KM (Harigopal
and Satyadas, 2001). While the CEMM identifies
a multitude of knowledge processes through the
Key Maturity Areas, knowledge is differentiated
only through their discussion of tacit and explicit
knowledge. Each of these frameworks has provided valuable steps toward understanding the
nature of KM within an organization. However,
none have identified separate capabilities in distinct knowledge areas that may be individually

129

Validating Distinct Knowledge Assets

measured and leveraged within a single organization to more effectively meet its objectives.
The objective of this research is to further develop and validate a set of Knowledge Capability
(KC) measures that accurately capture a firms
overall KM Capability (Freeze and Kulkarni,
2007). Each KC is the knowledge related capability
of an organization within a particular knowledge
type. We draw upon previously identified KM
application areas such as knowledge repositories,
lessons learned, expert networks and communities of practice, etc. (King et al., 2002), and
characteristics of different types of knowledge
assets to conceptualize the KCs. We developed
a Knowledge Management Capability Assessment instrument that operationalizes the KCs.
The contribution of this paper lies in extending
previous research via improving the granularity of
measurement for KM Capability by hypothesizing
separate knowledge capabilities, developing and
validating the necessary measures, and defining the
steps necessary to improve each KC individually
and the KM Capability as a whole. We provide
validation of the KCs with empirical evidence
from two large independent organizational units
within a Fortune-50 semiconductor manufacturing company.
We begin by reviewing how prior research has
viewed the composition of a firms knowledge
asset structure in Section II. These viewpoints
include human capital participation in knowledge
related activities, importance of technological factors, lifecycle stages of knowledge, and the tacit/
implicit/explicit nature of knowledge. We use these
various viewpoints to recognize the different types
of knowledge and the abilities needed to leverage
them effectively. This prior conceptual work had
a significant influence on the composition of each
KC. We identify four important KCs that represent distinct KM capabilities - Lessons Learned,
Knowledge Documents, Expertise and Data. These
four KCs are sufficiently distinct, encompass a

130

majority of the knowledge capabilities within a


firm and arose from the literature review of the
various viewpoints elaborated below. While we
believe that these four KCs represent a majority of the knowledge capabilities within a firm,
other KCs may exist. KM is an evolving concept
and its understanding can undergo changes as
the maturity of its use increases. Nevertheless,
the explication of these KCs should follow the
construction criteria identified and may include
additional relevant viewpoints. We present these
four KCs as tested constructs to measure and
improve the KM Capability of an organization.
The conceptual development of the KCs was
done in a field setting with a Fortune-50 semiconductor manufacturing firm in the south-western
United States. The conceptual development, construction of the questionnaire, target population
and data collection are described in Section III.
Each KC consists of multiple latent descriptor
factors that represent an organizations ability to
effectively and efficiently manage this aspect of
knowledge. These latent descriptor factors are
considered First Order constructs. With the data
gathered from two large business units of the
company, we conducted a Confirmatory Factor
Analysis (CFA) using maximum likelihood factoring and verified the alignment adequacy of items
to the posited latent descriptive factors. Results
of the convergent/discriminant validity and the
CFA confirm the adequacy of the constructs.
We then tested each KC using General-Specific
and Second Order measurement models. This
analysis establishes each capability as a significant construct and validates the measurability of
the KC factors. Significance of the measurement
models provides the evidence of the reliability of
measurement for individual capabilities. These
results are presented in Section IV. The concluding remarks in Section V include implications for
researchers and practitioners as well as further
research directions.

Validating Distinct Knowledge Assets

Knowledge aSSet fraMeworK


In spite of the recognized need for creation and
utilization of knowledge assets, a standard,
well-accepted description of what is knowledge
continues to be debated. Some view knowledge
as non-existent without the knower (Fahey and
Prusak, 1998), while others claim to have successfully captured it into knowledge objects (Carlsson et al., 1996). In order to make effective use
of knowledge assets, organizations must be able
to first recognize and then assess the true value
of these resources. Only when these knowledge
assets are clearly identified can the capabilities
associated with them be measured and effective
managing of knowledge begin. In the following
paragraphs, we discuss the perspectives offered
in prior research to the concept of knowledge and
Knowledge Management.

Human capital and technology


Knowledge assets are intangible assets that encompass the knowledge as well as the ability of
an organization to leverage that knowledge. They
must include the extent to which a firms human
capital exploits the knowledge. A firms employees, also called knowledge workers, are integral
to the capabilities associated with the knowledge
assets. This perspective views knowledge assets
as organizational resources intertwined with the
human capital as defined within the resource-based
view of the firm. The literature on resource-based
strategy treats human capital as one of the key
rent-generating (knowledge) assets of a firm
(Barney, 1991; Coff, 1997).
Technology designed to facilitate the interaction of knowledge with the human capital through
each stage of its lifecycle is another important
aspect of knowledge capabilities. Davenport et al.
(2002) identify a few major factors management
and organization, information technology, among
others that influence the performance of knowl-

edge workers and knowledge-based organizations,


emphasizing the interplay of organizational and
technological factors in knowledge work.

Knowledge lifecycle
A lifecycle or knowledge process oriented view
of knowledge assets stipulates that companies that
want to develop and use knowledge effectively
need to treat knowledge differently according to
the stages of its life (Birkinshaw and Sheehan,
2002). KM researchers have regarded these stages
of the knowledge lifecycle as: knowledge flows,
steps to KM, architectures for explicit knowledge,
and knowledge lifecycle (Birkinshaw and Sheehan, 2002; Satyadas et al., 2001; Zack, 1999b).
Evaluating the different stages proposed resulted
in our viewing the knowledge lifecycle for this research as a four stage acquisition/storage/retrieval/
application cycle. Interaction between a firms
human capital and knowledge at different stages
of its lifecycle is facilitated by the technological
factors briefly described below.
The actual acquisition of knowledge and decision to transfer resides solely with the capabilities
associated with a firms human capital. Knowledge
can only be acquired if the knowledge worker
recognizes its value. The next logical stage in leveraging knowledge assets is to codify and capture
this new knowledge in repositories under existing
or expanded taxonomies. These processes begin
the storage stage of the knowledge assets and create the potential to use that captured knowledge.
The retrieval stage is the result of the decision to
reuse/apply existing knowledge; the success of
any attempt to leverage knowledge assets of a
firm is measured by whether a knowledge reuse
has occurred and is the culmination of the entire
cycle. This movement of knowledge exemplifies
the importance of recognizing the knowledge
lifecycle. Closer examination of the knowledge
lifecycle is needed in the context of different
knowledge types to understand each KC.

131

Validating Distinct Knowledge Assets

tacit/implicit/explicit Knowledge
Tacit knowledge has engaged researchers for many
years and is described in a multitude of ways: practical know-how, difficult to articulate, transferred
only via observation and practice, subconsciously
understood and applied, and rooted in action,
experience and involvement in a specific context
(Harigopal and Satyadas, 2001; Koskinen, 2003;
Nonaka, 1994; Teece, 1998; Zack, 1999b). Similarly, there is a wealth of research about explicit
knowledge depicting its essence as embodied in
code or language, knowledge already documented,
precisely or formally articulated, codified and
communicated in symbolic form and/or natural
language (Alavi and Leidner, 2001; Harigopal and
Satyadas, 2001; Koskinen, 2003; Zack, 1999b).
Knowledge management researchers debate
whether knowledge can exist external to human
beings and therefore be captured electronically.
The research of tacit and explicit knowledge is
intrinsic to this debate.
A holistic view of organizational knowledge
assets must encompass both the tacit and explicit
nature of knowledge and the interplay that exists
between these two types of knowledge. The connection between tacit and explicit knowledge is
apparent when one recognizes that tacit knowledge is the means by which explicit knowledge is
created, captured, assimilated, and disseminated
(Fahey and Prusak, 1998) and where tacit knowledge forms the background necessary for assigning the structure to develop and interpret explicit
knowledge (Alavi and Leidner, 2001; Polanyi,
1975). These connections between explicit and
tacit knowledge imply a continuum that provides
a scale of media richness vs. externalization:
face-to-face (tacit knowledge), telephone, written
personal, written formal, numeric formal (explicit
knowledge) (Koskinen, 2003).
The continuum of tacit to explicit knowledge
hints at a process in which tacit knowledge is
converted or transformed into explicit knowledge.
This movement of knowledge from tacit to explicit

132

is where the domain of implicit knowledge exists.


Organizational Learning (OL) literature defines
implicit knowledge as that which results from
the induction of an abstract representation of the
structure that the stimulus environment displays.
This knowledge is acquired in the absence of conscious, reflective strategies to learn (Reber, 1989).
To place a KM perspective on this definition,
the tacit knowledge of experts has unconsciously
been made implicit. The transfer of knowledge
from being tacit to implicit is unobservable since
this process occurs within an individual. Tacit
knowledge is unconsciously understood and is
difficult to articulate. Implicit knowledge can
be consciously understood and articulated, but has
not yet been articulated or captured explicitly. This
implicitness enables the possibility of transforming what was originally tacit into explicit. The
OL literature has researched implicit learning
and provided support that implicit knowledge
can be retained for longer periods than explicit
knowledge (Tunney, 2003). This means that, once
tacit knowledge is made implicit, it resides with
greater permanence within the human capital and
therefore extends the time available for making
that knowledge explicit.
As the knowledge lifecycle has identified steps
in the movement of knowledge, the types of knowledge that are available, useable and transferable
must be recognized within each KC. Recognizing
the richness of implicit knowledge that exists in
each KC can facilitate the construction of venues
for transforming implicit knowledge to explicit
knowledge that becomes an integral part of an
organizations knowledge assets.

Knowledge capabilities
The framework presented here provides a method
to assess the overall capability of an organization
to manage its knowledge within the four KCs
mentioned earlier: Lessons Learned, Knowledge
Documents, Expertise and Data. Higher levels of
KCs may result in improved organizational per-

Validating Distinct Knowledge Assets

formance. That association is beyond the scope of


this paper. We describe each KC in terms of four
elements: (1) the recognition of the capability in
prior research, (2) the interaction of human capital and technology, (3) the tacit/implicit/explicit
nature of the knowledge and (4) the knowledge
lifecycle flow.
Lessons Learned or best-known methods are
defined as situation-specific useful knowledge
gained while completing tasks or projects. Each
Lesson Learned begins as tacit knowledge in a
knowledge worker and at some point it becomes
implicit knowledge. Lessons Learned, as internal
benchmarking or best practice transfer, are identified as one of the most common applications (in
KM) (Alavi and Leidner, 2001). Internal benchmarking is the process of identifying, sharing, and
using the knowledge inside ones own organization
(ODell and Grayson, 1998). Lessons Learned are
unique individual aspects of knowledge and their
identification as best practices imply that they
are highly tacit/implicit, singular and specific to
situations. Although lessons may be unique and
learned in specific circumstances, one can develop
a process to facilitate the identification, capture
and transfer of such lessons to other similar situations. One of three basic repository types found
by Davenport et al. (1998) to be informal internal
knowledgeis sometimes referred to as lessons
learned. An organizations human capital can be
focused to collect or capture these lessons through
reviews conducted at the completion of projects,
on achieving major milestones, and/or at periodic
intervals such as operational updates. The lessons,
captured as successes, failures, solutions, etc.,
can be organized in a context-specific manner in
a repository for reuse. Such knowledge can then
be retrieved when the context warrants its use
or, if the lessons are generalizable, they may be
distributed or used for training other knowledge
workers.
Knowledge Documents are defined as codified
knowledge originating from published sources and
containing highly explicit knowledge typically

having a long shelf life. Knowledge Documents


may be text-based forms that include project
reports, technical reports, research reports and
publications. This field of information (codified
knowledge) can include statistics, maps, procedures, analyses and can include alternative
forms such as pictures, drawings, diagrams, presentations, audio and video clips, on-line manuals,
and tutorials (McDermott, 1999). The Cognizant
Enterprise Maturity Model identifies knowledge
already documented as a procedure, concept, or
theory as explicit knowledge to be stored in a
repository (Harigopal and Satyadas, 2001). While
many of these sources of codified knowledge
originate internally, knowledge sources may lie
within or outside the firm (Zack, 1999a). Such
knowledge needs to be organized through sorting
and categorizing via an established taxonomy
into a repository for use within the organization.
Search engines are the primary technology used
by organizations knowledge workers to locate and
use these knowledge documents. An organizations
human capital must recognize the explicit nature,
the internal/external origin, and the referential
usage of this knowledge source. The interaction
of the human capital with this knowledge source
mainly occurs at the search and retrieval stage of
the life cycle.
Expertise is viewed as the knowledge that may
be gained through experience or formal education. The need for domain expertise initiates the
demand for transfer of this highly tacit form of
knowledge. The Personalization Strategy (Hansen
et al., 1999) relies extensively on the identification of experts in various areas of expertise. This
strategy views knowledge transfer as occurring
through the mentoring done by experts. Identifying such experts and classifying their areas of
expertise such that their knowledge can be efficiently tapped is an active research area (Alavi
and Leidner, 2001; Dooley et al., 2002). In many
organizations, corporate directories have been created to map internal expertise (Alavi and Leidner,
2001) while individually held expertise has been

133

Validating Distinct Knowledge Assets

shown to facilitate team creativity (Tiwana and


Mclean, 2005). Most importantly, individuals in
organizations often need to access knowledge that
is outside their own area of expertise (Dooley et
al., 2002) and to do so may require accessing the
tacit knowledge in peoples heads (Gurteen, 1998;
Quintas et al., 1997). The tools used to facilitate
the domain experts tacit knowledge transfer range
from capturing contact and domain information
of experts so other knowledge workers shorten
the time to locate and contact known experts to
collaboration technologies for simulating faceto-face communication. Experts are also a source
of implicit knowledge that has the potential to be
made explicit. Hence, some organizations encourage, with supporting technologies, transformation
of experts implicit knowledge to explicit knowledge for wider dissemination to the organizations
human capital.
Data provides many complementary benefits
to the leveraging of other KCs. Data can be transformed into decision- and action-relevant meaning. Databases and data warehouses containing
aggregated or otherwise summarized historical
information are the most basic form of KM tools
(Brown and Duguid, 2000; Fahey and Prusak,
1998). The value of this highly explicit form of
knowledge is dependent on various dimensions
such as context, usefulness, and interpretation
(Alavi and Leidner, 2001). A common view holds
that data is raw numbers, information is processed
data and knowledge is authenticated information
(Vance, 1997). The iconoclastic view reverses
the data to knowledge assumption and states that
knowledge must exist before information can be
formulated and before data can be measured to
form information (Tuomi, 1999). The raw data
that exists in data warehouses has been a significant source of business intelligence (BI) in recent
years. Yet BI initiatives have not realized the
anticipated benefits to firm performance (Rogers
et al., 2005). The capture of an organizations data
into the warehouse is mostly automated through
the extract-transform-load process (Hoffer et al.,

134

2005). Major organizational benefits accrue when


this knowledge source is utilized through analysis
and mining tools to support tactical and strategic
decision-making. The focus of organizations on
this source of knowledge justifies the inclusion of
Data as a KC and the lack of success indicates a
need to assess the knowledge capability required
to capitalize on it.

MetHodologY
The conceptual development of the KCs was
done in partnership with a large semiconductor
manufacturing firm comprised of multiple business units in a global setting. The research methodology included face validation of the four KC
areas derived from prior research, construction
of the measurement instrument, identification of
the target population, data collection, and analysis
for construct validation. This was accomplished
in phases over a period of 18 months. The first
phase started with the development of KC constructs including the knowledge processes that
comprise them. The company charged an internal
team of five experts in Process Management,
Information Technology, Value Engineering,
HR, and Training and Development to work
with the external researchers (authors) for the
entire project. The authors and the internal team
studied several internal knowledge documents,
training documents, questionnaires, guidelines,
memos, and other artifacts used by knowledge
workers. They also studied various KM systems
and interviewed knowledge workers in multiple
business units regarding their knowledge sharing
activities. The aim was to achieve an initial face
validation of the KC constructs.
From these field interactions, the team developed a KM Capability assessment instrument to
measure various aspects of the four KCs described
earlier. Each KC was operationalized using a set
of latent descriptor factors guided collectively by
its unique involvement in the knowledge lifecycle,

Validating Distinct Knowledge Assets

need for technological support, and interaction


with the human capital. For example, Lessons
Learned is hypothesized to be composed of four
descriptor factors: Capture, Repository, Taxonomy, and Application/Use.
A focus group of 12 individuals within the
subject organization evaluated the first version
of the instrument. The group consisted of 10 to
12 senior and mid-level managers to assess the
meaning, relevance, and completeness of the
instrument (Kulkarni and Freeze, 2004). The feedback from the focus group resulted in clarifying
the questions to ensure applicability to the target
audience. We then surveyed a pilot group of 98
individuals whose feedback resulted in shortening
and substantially simplifying the questionnaire.
Another focus group ensured that the meaning of
the questions remained intact. Table 1 shows the
KC factors (in bold and underlined), the descriptor
factors (in bold), and an abbreviated version of the
scale items in the questionnaire. The groupings
in the table show the hypothesized descriptors
for each KC. Each scale item was measured on a
5 point Likert scale denoting the extent to which
the item was applicable.
The organizations KM Training and Development group solicited participant organizational
groups without the assistance of the researchers.
Two large business units were selected to undergo the initial set of assessments. These two
units data is analyzed for the purpose of this
research. (Eventually, the company used this instrument to assess the KM Capability of many
business units; interested readers may request
those assessment results from the authors). The
first business unit, BU1, was charged with assuring the internal material and product quality across
the entire organization (population about 1000).
The knowledge workers of BU1 were lab managers, engineers, and technicians. A majority were
located in North America with some groups in
European and Asian regions. The second unit,
BU2, was responsible for the development and
sourcing of system software across all product

lines of the organization (population about 700).


BU2 knowledge workers were mainly application
engineers and software engineers, but also included other enabling groups. BU2 was more
globally dispersed. The responsibilities of the two
units illustrated substantially different functional
areas. The knowledge workers of the two units
were charged with tasks belonging to different
domains, required distinctly different skill sets
and accessed knowledge of different types and
forms. Even though the two business units resided within a single organization, we believe the
differences in their responsibilities, business goals
and objectives provided us with some amount of
external validity.
Each member of the two business units received
an introductory email from senior level sponsors
in their business unit concerning the upcoming
administration of the survey, its potential impact
on KM and the importance of completing the
survey. This was followed by a second email with
instructions and a link to the survey instrument. A
weekly reminder email with a link to the survey
was sent for the four-week data collection period.
Incentives in the form of raffles were used to boost
the participation rates. These efforts resulted in
response rates of 22% (223 useable responses)
and 43% (303 useable responses) in BU1 and
BU2. We note that the responses were voluntary
and therefore may have introduced some response
bias in the results. To test for this, BU2 allowed
us to poll a sample of non-respondents of the
survey. Discriminant analysis of this group with
the original respondents did not provide evidence
of a response bias. BU1 was reluctant to allow
us to contact a sampling of the non-respondents;
hence, we tested BU1 for a potential response bias
by comparing the first and fourth quartile (early
and late) responses using discriminant analysis.
This analysis was also conducted with BU2 data
for comparison. These procedures for BU1 and
BU2 provided no evidence of a response bias.

135

Validating Distinct Knowledge Assets

Table 1. Knowledge Management Capability Assessment Instrument


Expertise
Expertise Repository

Expertise Taxonomy

er1

Availability of repository(ies)

et1

Existence of taxonomy

er2

Accessibility of repository(ies)

et2

Clarity and standardization

er3

Usefulness of repository content

et3

Comprehensiveness

er4

Information about internal & external experts

et4

Extensibility

er5

Search capabilities

er6

Ease of searching

ec1

Routineness of use

er7

Multiple search criteria

ec2

Ease of use

ec3

Access to internal & external experts

ec4

Multiple tool set

Collaboration Tools **

Expert Access/Consulting
ea1

Practice of looking for available expertise

ea2

Ease of finding experts

ea3

Embedded in normal work practices

ep1*
ep2

Communities of Practice**
es1

Participation in SIGs

Expert Profiling & Registration

es2

Encouragement for participation

Existence of a registering & profiling process

es3

Availability of relevant SIGs

Ease to use

es4

Participation on company time

ep3

Allows self-updating

es5

Financial support for participation

ep4

Managed for consistency


Lessons Learned
Lessons Learned Repository(ies)

Taxonomy

lr1

Availability of repository(ies)

lt1

Existence of taxonomy

lr2

Accessibility of repository(ies)

lt2

Clarity and standardization

lr3

Usefulness of repository content

lt3

Comprehensiveness

lr4

Search & retrieval capabilities

lr5

Ease of searching

lc1

Practice of capture

lr6

Multiple search criteria

lc2

Consolidation and management

lc3*

Individual and group responsibilities

lc4

Existence of a systematic processes

Application/Use
la1

Practice of application/use

la2*

Ease of finding relevant lessons

la3

Embedded in normal work practices

Capture

continued on following page

analYSiS and reSultS


While evaluating each KC construct, we hypothesized each latent descriptor factor within an
individual KC to be a trait (first order or specific
factor) for the set of measures. We first conducted
Confirmatory Factor Analysis (CFA) to deter-

136

mine the validity of the hypothesized descriptor


factors within each KC. After this analysis, we
constructed two measurement models for each
KC - a Second Order model and a General-Specific
model - to perform further confirmatory analysis.
These Structural Equation Models provide further

Validating Distinct Knowledge Assets

Table 1. continued
Knowledge Documents
Knowledge Documents Repository(ies)

Taxonomy**

kr1

Availability of repository(ies)

kt1*

Existence of taxonomy

kr2

Accessibility of repository(ies)

kt2*

Clarity and standardization

kr3

Usefulness of repository content

kt3*

Comprehensiveness

kr4

Access to internal & external documents

kr5

Supports rich formats

ks1

Ease to use

kr6

Clarity of meta-data

ks2

Effectiveness of retrieval system

ks3

Multiple search criteria

Search & Retrieval

Categorization

Reference & Use**

kc1

Existence of a categorization process

kc2

Ease to use

ku1*

Practice of reference/use

kc3

Embedded in normal work practices

ku2*

Ease of finding documents

kc4

Managed to ensure adherence


Data
Data Repository(ies)

Data Relevance

dr1

Availability of repository(ies)

dv1

Timeliness

dr2

Accessibility of repository(ies)

dv2

Periodicity

dr3

Currency of data

dv3

Completeness

dr4

Level of detail/summarization

dv4

Usefulness of format

dr5

Clarity of meta-data

dv5

Accuracy

ds1*

Ease of use

ds2*

Sufficiency

Decision Support Tools

KC factors are in bold and underlined, descriptor factors are in bold


* - Dropped scale item for EFA, ** - Dropped factor for CFA

evidence of the validity of measurement of these


knowledge assets.

confirmatory factor analysis


Comparisons of Principal Component Analysis
(PCA) and Maximum Likelihood (ML) factor
analysis indicate that either technique is equally accurate for pattern reproduction (Velicer and Fava,
1998). However, we chose ML over PCA because
PCA is designed as a data reduction technique that
maximizes the extracted variance, whereas ML is
designed to estimate factor loadings for populations that maximize the likelihood of sampling

the observed correlation matrix (Fabrigar et al.,


1999; Tabachnick and Fidell, 2001). Through
the use of ML, an iterative process was applied
to each KC to identify problem scale items for
both business units.
During the iterative process, we set three goals
while performing the CFA for determining the inclusion or exclusion of scale items on a factor. The
first goal was to retain a minimum of three variables
per factor in order to ensure stability (Velicer and
Fava, 1998). For determining the loading criteria,
we used the following recommended thresholds:
0.71 excellent, 0.63 very good, 0.55 good
and 0.45 fair (Comrey and Lee, 1992). If a scale

137

Validating Distinct Knowledge Assets

Table 2. Confirmatory Factor Analysis ML Results


Variance
Explained (%)
Knowledge
Capability

TLI

Observations

BU1

BU2

BU1

BU2

BU1

BU2

BU1

BU2

Expertise

Repository, Taxonomy,
Access, Profiling,
Collaboration, CoPs

85

78

654

614

0.92

0.92

250

301

Lessons Learned

Repository, Taxonomy,
Use, Capture

84

80

139

143

0.95

0.95

243

290

Repository, Categorization,
Search

88

82

140

140

0.96

0.96

228

283

Repository, Relevance

90

87

97

123

0.97

0.96

224

291

Knowledge
Documents
Data

Descriptor Factors

Chi Square
(p < .001)

item did not load on the hypothesized factor, it


was removed rather than trying to provide a possible alternative explanation for reorienting that
item. This parsimony is especially critical when
the removal improves the models fit indices and
facilitates achieving our second goal which was
that the removal of any scale item should improve
the models Chi-Square and Tucker/Lewis Index
(TLI) fit indicators. The third goal was to achieve
a model that is significant for both business units
and can guide the development of the Structural
Equation Models for confirmatory factor analysis.
In Table 1, latent descriptors and scale items that
were dropped after the CFA are marked with an
asterisk. The final loadings of the four KCs, Lessons Learned, Knowledge Documents, Expertise,
and Data, are presented in Tables 3-6. Summary
results of the overall model for each KC of the
two business units (BU1 and BU2) are presented
in Table 2 Confirmatory Factor Analysis ML
Results. The results are discussed below along
with the impact each goal had on the analysis for
the individual capability.
The Lessons Learned CFA agreed with the
initial four hypothesized factors and with the
exception of the fourth factor, the first goal of
retaining at least three variables per factor was
achieved (Table 3). As can be seen from Table 3,
most of the scale items had excellent loadings
on their respective factors. The fourth factor, Ap-

138

plication/Use, had two scale items with loadings


greater than 0.80. Since both these scale items
had loadings that were much better than the
threshold for excellent, retaining the Application/Use factor with only two scale items is not
deemed to be a major drawback. More importantly, the two improperly loading scale items,
lc3 and la2, were from different hypothesized
factors (one from Capture and the other from
Application/Use). Of the two scale items, lc3 did
not load for BU1 and la2 did not load for BU2.
Following our second goal, we iteratively removed
each scale item (la2, then lc3) which improved
both the Chi-Square statistic and TLI upon each
removal. Our third goal was achieved with a TLI
of 0.95 for both business units.
The CFA results of the Expertise KC returned
six identifiable factors as was originally hypothesized (Table 4). We achieved our initial goal of
retaining at least three variables per factor for
all six factors. Of the twenty-seven scale items,
only four did not have excellent loadings. The
only scale item of the four that loaded improperly
was ep1. Instead of loading on Expert Profiling
& Registration, ep1 had the highest loading on
Repository. Removal of this scale item increased
the TLI for both business units. Our third goal was
achieved with TLIs of 0.92 for each business unit.
Further analysis shows that five of the six factors
had three scale items with excellent loadings for

Validating Distinct Knowledge Assets

Table 3. Lessons Learned Factors


Repository

Taxonomy

BU1

BU2

lr1

0.67

0.70

lr2

0.82

0.86

lr3

0.82

0.80

lr4

0.87

0.92

lr5

0.88

0.86

lr6

0.89

0.86

Capture

BU1

BU2

lt1

0.63

0.64

lt2

0.87

0.87

lt3

0.83

0.91

App/Use

BU1

BU2

lc1

0.67

0.79

lc2

0.89

0.74

lc3

lc4

0.51

0.49

la1

BU1

BU2

0.83

0.84

la2

la3

0.84

0.87

each business unit. The sixth factor, Expert Access, had two items with excellent loadings for
both business units and the third item had either
a very good (BU1) or a good loading (BU2).
The Knowledge Documents KC was originally hypothesized to be composed of five factors.
However, the five scale items hypothesized for
Taxonomy and Reference & Use did not load on
a separate/distinct factor (Table 5). For only the
factors of Repository, Categorization and Search
were we able to achieve our first goal. Pursuant
to our second goal, each of the scale items for
Taxonomy (kt1, kt2 and kt3) and Reference &
Use (ku1 and ku2) were iteratively removed. The
TLI improved with each iteration and a more
parsimonious three-factor model emerged. Our
third goal was achieved with a TLI of 0.96 for
each business unit. For each of the remaining
three factors, there were at least three scale items
with excellent loadings.
The Data KC (Table 6) was originally hypothesized as having three factors. The descriptor

variable Decision Support Tools and the associated scale items (ds1 and ds2) encountered commonalities greater than one while running the ML
and would not complete computation. This factor
did not originally have three items and so these
scale items, as well as the factor, was iteratively
removed, which resulted in convergence to two
factors for data with excellent loadings for all
scale items. The final TLI was 0.97 for BU1 and
0.96 for BU2.

Knowledge capability SeM Models


Another approach to confirming the KC factors is
to build a Structural Equation Model (SEM) for
each capability. For this purpose, we constructed
two measurement models, a Second Order model
and General-Specific model, to perform further
confirmatory analysis of each KC. In the Second
Order model, the descriptors within each capability correspond to first order factors and the
KC factor is the second order factor. In the case

139

Validating Distinct Knowledge Assets

Table 4. Expertise Factors


Repository
BU1

BU2

er1

0.64

0.64

er2

0.80

0.85

er3

0.84

0.85

er4

0.85

0.85

er5

0.93

0.90

er6

0.93

0.90

er7

0.92

0.90

Taxonomy
BU1

BU2

et1

0.62

0.58

et2

0.77

0.78

et3

0.80

0.80

et4

0.79

0.78

Profiling
BU1

Access

BU2

BU1

BU2

ea1

0.84

0.97

ea2

0.69

0.59

ea3

0.84

0.75

Collaboration
BU1

BU2

ec1

0.91

0.74

ec2

0.94

0.87

ec3

0.78

0.75

ec4

0.85

0.77

CoPs
BU1

BU2

es1

0.79

0.57

es2

0.88

0.86

es3

0.87

0.80

es4

0.92

0.94

es5

0.83

0.88

ep1

ep2

0.73

0.76

ep3

0.76

0.81

ep4

0.75

0.81

of the General-Specific model, the descriptors


correspond to specific factors and the KC is the
general factor. Although these two models are not
mathematically equivalent, they provide similar
interpretations of the capability under investigation (Chen et al., 2006; Gustafsson and Balke,
1993). The main difference between the two
models is that the Second Order model evaluates
the influence of the second order factor (e.g., the
Expertise KC) on the first order factors (descrip-

140

tors of Expertise), whereas the General-Specific


model evaluates the influence of the general factor
(KC) directly on the specific (scale) items that
comprise it. In both models, the descriptors are
considered to be orthogonal.
We used LISREL 8.54 for the investigation
of all sixteen measurement models (4 KCs * 2
Models * 2 business units). The final results of
the measurement models for each capability are
summarized in Table 7 SEM Confirmatory

Validating Distinct Knowledge Assets

Table 5. Knowledge Document Factors


Repository
BU1

Taxonomy

BU2

Categorization

BU1

BU2

BU2

kt1

kt2

kt3

ku1

ku2

0.76

0.74

kr2

0.86

0.80

kr3

0.88

0.79

kr4

0.78

0.80

kr5

0.76

0.77

kr6

0.67

0.73

BU2

kc1

0.58

0.58

kc2

0.78

0.83

kc3

0.80

0.81

kc4

0.81

0.84

BU1

Use
BU1

kr1

BU1

Search
BU2

ks1

0.85

0.82

ks2

0.86

0.78

ks3

0.86

0.76

Table 6. Data Factors


Repository
BU1

Relevance
BU2

BU1

Search
BU1

BU2

ds1

ds2

dr1

0.71

0.66

dr2

0.88

0.85

dr3

0.87

0.88

dr4

0.90

0.91

dr5

0.87

0.89

BU2

dv1

0.89

0.88

dv2

0.90

0.91

dv3

0.83

0.85

dv4

0.80

0.85

dv5

0.86

0.88

141

Validating Distinct Knowledge Assets

Table 7. SEM Confirmatory Analysis Results


Knowledge Capability

Model Type

Group

df

NNFI

CFI

SRMR

Lessons Learned

Second Order

BU1

223

100

465

0.95

0.96

0.093

Lessons Learned

Second Order

BU2

303

100

629

0.94

0.95

0.120

Lessons Learned

General-Specific

BU1

223

88

355

0.96

0.97

0.069

Lessons Learned

General-Specific

BU2

303

88

394

0.96

0.97

0.093

Data

Second Order

BU1

223

51

183

0.98

0.98

0.032

Data

Second Order

BU2

303

51

198

0.98

0.99

0.034

Data

General-Specific

BU1

223

43

136

0.98

0.99

0.048

Data

General-Specific

BU2

303

43

125

0.99

0.99

0.036

Expertise

Second Order

BU1

223

131

578

0.96

0.97

0.076

Expertise

Second Order

BU2

303

131

477

0.97

0.98

0.066

Expertise

General-Specific

BU1

223

117

461

0.97

0.97

0.034

Expertise

General-Specific

BU2

303

117

391

0.98

0.98

0.030

Knowledge Documents

Second Order

BU1

223

62

263

0.97

0.98

0.052

Knowledge Documents

Second Order

BU2

303

62

241

0.98

0.98

0.043

Knowledge Documents

General-Specific

BU1

223

52

193

0.97

0.98

0.030

Knowledge Documents

General-Specific

BU2

303

52

201

0.98

0.99

0.024

Analysis Results. Path diagrams for the Lessons


Learned KC representing the two measurement
models, Second Order and General-Specific, for
BU1 are in Figure 1a and 1b. Figures 2 through
4 show the Second Order and General-Specific
measurement models for the other three KCs Expertise, Knowledge Documents, and Data - for
BU1. Similar figures for BU2 are omitted due to
space constraints. Only the summarized results
appear in Table 7.
For confirming the factors within each capability+, we began with a model that replicated the
initial instrument and included all items and their
loadings on the hypothesized descriptors. This
confirmation ignores the results of the earlier CFA
in order to test the adequacy of the initially hypothesized factors within each KC. If adequate
Second Order and General-Specific models are
achieved, these are considered the final models.
We achieved significant results for this initial
confirmation in the capabilities of Lessons Learned
(Figure 1a and 1b) and Data (Figure 4a and 4b).
For Knowledge Documents (Figure 3a and 3b),

142

the five hypothesized factors would not converge


using either model. We then used the CFA results
to run a three-factor model which achieved a good
model fit. Expertise encountered similar problems
with convergence which prompted us to reevaluate its descriptor factors in light of the other KC
descriptors which were mainly knowledge process
oriented. We concluded that although Collaboration Tools and Special Interest Groups were
confirmed to be latent factors within the capability of Expertise in the original CFA, these factors
did not represent any particular stage in the lifecycle view of knowledge capabilities and thus
may in reality represent a different capability.
These descriptors need further investigation. We
removed these two factors and achieved convergence on a four-factor model for Expertise (see
Figure 2a and 2b). The results in Table 7 represent
these final measurement models.
The fit indices in Table 7 provide four tests
indicating the adequacy of fit for each KC factor.
The overall KC is represented as a Second Order
factor and a General factor. These two represen-

Validating Distinct Knowledge Assets

Figure 1. BU1 Lessons Learned Measurement Models

Figure 2. BU1 Expertise Measurement Models

143

Validating Distinct Knowledge Assets

Figure 3. BU1 Knowledge Documents Measurement Models

Figure 4. Data Measurement Models

tations were each replicated, with similar goodness


of fit, in the two business units. NNFI and CFI
above a threshold of 0.90 are considered to indicate a good fit for the model. An SRMR below
the threshold of 0.08 is considered a good fit for
the model. As can be seen from Table 7, all models for each business unit represent a good fit and
thus validate the KC constructs. The following
analysis and comparisons of the Second Order

144

and General-Specific model outputs reference


only the Lessons Learned KC (Figure 1a and 1b).
Similar comparisons can be made for each of the
other KCs (Figures 2 through 4). Analysis of
BU2s results also provided similar results. The
details and diagrams may be requested from the
authors.
Reviewing the Second Order model (Figure
1a), we see that for each of the descriptors (Re-

Validating Distinct Knowledge Assets

pository, Taxonomy, Capture, and Application/


Use), the loadings for each scale item are excellent based on the stated loading criteria of 0.71
or better. This provides the requisite construct
validation (in addition to the original CFA), i.e.
the instrument measures the intended separate
latent concepts. Each path between the first order
descriptor factors and the second order KC factor (Lessons Learned in this case) is significant
indicating the influence of the overall KC on
each of its first order descriptor factors. When
reviewing the General-Specific model (Figure
1b), each scale item is posited to load on both
the general factor (KC) and one of the specific
factors (descriptor). A General-Specific model
does not follow the previously stated loading
criterion; instead, the significance of the loading
coefficients has greater meaning since each scale
item is hypothesized to load on both a general
and a specific factor. For Lessons Learned, the
loadings on the general factor (Lessons Learned)
are all significant which indicates the influence
of the general factor on all scale items. The scale
item loadings for the specific factors (Repository,
Taxonomy, Capture and Application/Use) are also
significant even though these loadings vary from
a low of 0.18 to a high of 0.71. These loadings
represent the additional influence and explanation
of variance that the specific factors have on each
of the scale items, above and beyond the influence
of the general factor (Chen et al., 2004). The fact
that all items are also significant on the specific
factors provides additional evidence of construct
validity of the measurement model.
Since the Second Order model is a more restricted model and has been demonstrated to be
a nested version of the General-Specific model
(Yung et al., 1999), the Chi-Square difference test
indicates whether the two models are significantly
different in their representation of the KC. The
form of the Chi-Square difference test statistic and
its value for the Lessons Learned KC is:
2 = (22nd 2GS) = (465 355) = 110,

df = (df2nd dfGS) = (100 88) = 12,


where: 2 is the difference between the ChiSquared statistics and df is the difference between
the degrees of freedom of the Second Order model
and the General-Specific model respectively.
Significance of the Chi-Square test is determined by consulting a Chi-Square table utilizing
the resulting Chi-Square value and the number of
degrees of freedom. The Chi-Square test results
for BU1 for the Lessons Learned KC indicate
that the two models are significantly different
(at p<.001). A review of the fit indices indicates
that, although both models indicate the existence
of Lessons Learned as a valid KC, the GeneralSpecific model represents the Lessons Learned
capability more accurately than the Second Order
model. This means that, for any investigations
involving Lessons Learned as an overall factor
(e.g. relationships between Lessons Learned capability and firm performance) the General-Specific
model would be a better choice for representing
this KC. On the other hand, if the theory indicates
descriptor variables within Lessons Learned, then
the Second Order model provides an adequate
representation for testing the hypotheses. The
Chi-Square difference test and comparison of
model fit indices provided similar results for each
capability for both business units. This indicates
that the structure of the KCs and the descriptor
variables are consistent across all the capabilities
and that both models may be used depending on
the theoretical basis from which they are applied.

concluSion
In the process of establishing capabilities as
knowledge assets, we have focused our efforts
on establishing measurement consistency and
the representation of each knowledge capability
as a latent factor. Each capability was established
using the two measurement model forms of: (1) a
General-Specific SEM model and (2) a Second-

145

Validating Distinct Knowledge Assets

Order SEM model. Both models provided fit indices for all capabilities indicating models of good
fit. The significance of the General factor and the
Second Order factor representing the overall capability provides strong evidence supporting these
knowledge assets as measurable capabilities. This
evidence is further strengthened by the application
of the models to two large independent business
units in a leading semi-conductor manufacturing
company in order to confirm the measurability of
the capabilities as knowledge assets. By using two
measurement models within two business units,
we have provided experimental rigor and some
amount of external validity.
While we have demonstrated the standardized measurability and recognized a different
makeup for each knowledge asset, we recognize
that these results may be limited by the fact that
the data originated from a single organization.
This limitation needs to be evaluated in light of
the vastly different corporate directives and the
autonomous nature of the two business units. One
must also recognize that while the identification
of four capabilities represents an attempt at enumerating diverse knowledge assets within most
organizations, these KCs may not represent all that
is considered as knowledge by every organization.
KM is an evolving field and the definition of what
is knowledge can undergo changes as researchers
and practitioners develop a better understanding
of this complex concept.
Immediate implication for managers is that a
method has been provided to assess the capability
level for these four knowledge assets. Recognition that a specific knowledge capability is low
in comparison to other knowledge capabilities
and organizational strategic goals will allow KM
initiatives to be targeted to that specific KC. For
example, an organization may recognize a need
for contacting experts and using relevant expertise
as a knowledge asset. The Expertise KC may not
be currently understood or exploited as well as
their documented knowledge that is systematically
maintained and shared widely across the organi-

146

zation (Hansen et al., 1999). If this deficiency is


identified and the need recognized, an organization
may focus on improving the sharing of relevant
expertise to complement the existing high capability in Knowledge Documents. Conversely, another
organization may identify a higher need for effectively reusing the knowledge asset of Lessons
Learned, but a lower need for directly sharing
Expertise. The organizations business strategy
may determine such differences in emphases for
its use of knowledge and the measurement can
identify the relative strength of each capability.
Organizational decision making can then be organized around the knowledge asset most beneficial
to the organizations strategy.
Assessment at the individual descriptor level
allows management to focus on targeted improvements within the specific knowledge area. Recognizing the appropriateness of an organizations
knowledge asset capabilities with respect to its
business goals will assist in directing resources
to initiatives that provide the greatest return. This
delineation of knowledge assets has not been
achieved in prior literature and represents an important improvement in the ability to target specific
improvements in organizational KM Capability.
Potential business implications of measuring
knowledge asset capabilities are in the ability to
tie KM to recognized value metrics, construct
targeted knowledge sharing improvements and
match organizational/business unit goals to the
need for capabilities in specific knowledge areas.
Outcomes that knowledge assets causally affect
may range from such soft measures as user satisfaction, perceived usefulness of knowledge, and
decision effectiveness, to directly measurable
unit-level or firm-level goal-oriented performance
metrics such as cycle-times, productivity, and customer satisfaction. Current research is underway
to investigate how knowledge capabilities relate
to some of these metrics.
As an initial avenue of future research, the
nature of the interaction between knowledge and
human capital implies a potential influence of the

Validating Distinct Knowledge Assets

organizations culture with respect to KM and


knowledge sharing. While the capability measurement models are considered adequate without
taking a cultural metric into account, an organizations culture may influence a causal relationship
to the value achieved from these knowledge asset.
Factors such as the leaderships commitment to
knowledge sharing, rewards and incentive systems
for promoting knowledge sharing behavior, attitudes of co-workers, and importance placed on
training while introducing new KM initiatives
are all important aspects to be considered while
investigating the causal relationships of KCs to
value indicating metrics of an organization.
The implications for research are significant. A
standardized instrument for measuring knowledge
capabilities would not only allow benchmarking,
but also allow tracking capabilities over time and
linking them to those performance metrics that
are deemed appropriate by the organization. The
application of this measurement instrument to
multiple organizations will improve the external
validation of the KC measurement models and
the identification of knowledge assets across
organizations. Within the current organization,
KM improvements have been initiated and a
longitudinal study is in progress to validate the
predictive ability of the instrument and the level
of impact of each KC to proposed value metrics.

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149

150

Chapter 9

Assessing Knowledge
Management:

Refining and Cross-Validating the


Knowledge Management Index
(KMI) using Structural Equation
Modeling (SEM) Techniques
Derek Ajesam Asoh
Southern Illinois University Carbondale, USA & National Polytechnic, University of Yaounde,
Cameroon
Salvatore Belardo
University at Albany, USA
Jakov (Yasha) Crnkovic
University at Albany, USA

abStract
With growing interest in KM-related assessments and calls for rigorous assessment tools, the objective
of this study was to apply SEM techniques to refine and cross-validate the KMI, a metric to assess the
degree to which organizations are engaged in knowledge management (KM). Unlike previous KM metrics research that has focused on scales, we modeled the KMI as a formative latent variable, thereby
extending knowledge on formative measures and index creation from other fields into the KM field.
The refined KMI metric was tested in a nomological network and found to be robust and stable when
cross-validated; thereby demonstrating consistent prediction results across independent data sets. The
study also verified the hypothesis that the KMI is positively correlated with organizational performance
(OP). Research contributions, managerial implications, limitations of the study, and direction for further
research are discussed.
DOI: 10.4018/978-1-60566-709-6.ch009

Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

Assessing Knowledge Management

introduction
The knowledge-based view of the firm (Grant,
1996) and the resource-based view of knowledge
(Barney, 1991, 2001) have contributed to an understanding and recognition of knowledge as a
unique resource that enables organizations to attain
and maintain sustainable competitive advantage.
The recognition of the value of knowledge has
propelled many organizations to become more
committed to managing their knowledge assets.
As a result, knowledge management (KM) has
evolved to become a prevalent if not mandatory
practice in such organizations; where expectations
are high, of KM to positively and significantly
contribute to bottom-line results and consequently
overall organizational performance (OP). Yet,
despite massive investment in KM per se, many
organizations are still struggling to assess and tie
KM to such outcomes as improved performance
(Chan & Chau, 2005).
KM benefits are intangible in nature and assessing the performance impact of KM may be one of
the greatest challenges confronting organizations
that have embarked on KM. But the results of the
assessment are quite invaluable to be ignored even
if organizations have to face various challenges or
other deterring factors to the assessment process.
For example, assessing KM permits organizations
to identify and possibly eliminate gaps in knowledge preparedness, set realistic expectations of
KM benefits, and appreciate how such benefits
relate with OP.
As organizations approach KM as a means
to improve their performance, being able to assess the degree of engagement in KM remains
an important task that must be conducted with
a reasonable degree of accuracy if they hope to
use the results for better management decision
making regarding the allocation and deployment
of resources to meet performance goals through
KM. The knowledge management index (KMI)
has been proposed as a metric to measure the degree to which an organization is engaged in KM

(Asoh, Belardo, & Crnkovic, 2002). Although


the usefulness of the KMI as a proxy for KM
and predictor of OP has been reported in previous studies (Asoh, Belardo, & Crnkovic, 2004;
Crnkovic, Belardo, & Asoh, 2004), the KMI has a
number of limitations which this study addresses
in order to enhance its usefulness.
First, in its current form with 32 items measuring one construct, the KMI instrument may
be perceived as being lengthy and as such would
be of limited usefulness (Comer, Machleit, &
Lagace, 1989). Second, the KMI is conceptualized and measured as a mean score of responses
to questionnaire items. Although summing item
responses (Spector, 1992) or creating item parcels
(Little, Cunningham, Shahar et al., 2002), is acceptable practice, some researchers have stressed
the necessity of first establishing that the items
summed or used in the parcel are unidimensional
(Gerbing & Anderson, 1988; Kim & Hagtvet,
2003). The unidimensionality of the KMI has
not been investigated. Third, we believe that the
KMI is multi-dimensional because KM itself
is a multi-faceted organizational phenomenon.
Without establishing the unidimensionality of the
KMI items, attempts at validating the KMI where
groups of items are simply summed and used in
regression equations as in the recent study (Asoh,
Belardo, & Crnkovic, 2005) may produce results
that are not stable. Fourth, the KMI model has
not been cross-validated. Researchers have been
urged to validate empirical research as a means of
maintaining rigor in the field (Straub, Boudreau,
& Gefen, 2004). However, cross-validation is
often ignored. Cross-validation, which involves
the use of a second sample to test a theory/model
that has been developed using a first sample,
avoids circular reasoning in research when the
theory/model is developed and tested using only
one sample as is often the case in validation only
studies. Furthermore, cross-validation is essential to evaluating the accuracy of a model and
is important because it demonstrates the model
can generate consistent results, and will thus be

151

Assessing Knowledge Management

of practical value in making predictions among


members of the reference population upon which
the model is based (Sheskin, 2004) (p. 1002).
Given the interest in KM-related assessments
(Anantatmula, 2005; Kankanhalli & Tan, 2005),
the relevance of the KMI as a potential KM assessment metric (Asoh et al., 2004; Crnkovic et
al., 2004), and the calls for rigorous assessment
tools (Straub et al., 2004), the purpose and objectives of this study were to (1) refine and reduce
the number of items of the KMI instrument; (2)
conceptualize and investigate the KMI model
as a multi-dimensional formative latent variable
(LV) construct, (3) investigate the performance
impact of KM via the KMI, and (4) investigate
the stability of the refined KMI model across
two independent datasets of the same population through cross-validation: developing a KMI
nomological network model using a first sample
(calibration) and testing it using a second sample
(holdback/validation).
The rest of this paper is organized as follows.
The second section presents the theoretical background, including the rationale for KM assessment,
and highlight of current work on KM metrics,
scope of the KMI, definition of the elements of
the KMI model as well as a multi-dimensional
LV model of the KMI. The third section presents
the research models and hypotheses of the study.
We present the methodology of the study in section four, discuss the results in section five, and
conclude in section six with a discussion of the
contribution, management and academic implications, limitations, and directions for further
research.

tHeoretical bacKground
KM assessment requirements,
benefits, and Metrics
To assess KM requires the use of metrics, i.e.
measures that yield key data about KM. Such

152

data can be translated into actionable information for managerial decision making processes.
Unfortunately, as (Lee, Lee, & Kang, 2005) point
out, many organizations that have introduced KM
have yet to develop appropriate means of assessing KM effectiveness and usefulness. While some
organizations currently have a few or no metrics to
assess their commitment to, and their engagement
in KM, it is precisely such assessment metrics,
we contend, that should be developed, validated,
and applied within organizational settings prior
to attempting to associate KM benefits with OP.
Executives and managers often look at metrics
to understand past, current, and possible future
business scenarios before making decisions and
as such, KM assessment should be a routine or
mandatory activity in organizations. Other benefits
of KM assessment can be cited. For example, assessment of the performance impact of KM can
provide the basis for the development and deployment of knowledge resources in the best possible
way to maximize OP. Furthermore, by assessing
KM and OP, key objectives such as evaluating
investment, securing funding for KM, developing
benchmarks, and deriving lessons for the future
can be realized (Kankanhalli & Tan, 2005).
The usefulness of KM metrics extends beyond
the focus of individual organizations. Metrics permit comparability with other organizations, across
industries, time, and geographical regions. Metrics
also permit comparability of research and provide
a basis for validation of theories and relationships
among concepts, as well as facilitate replication
of research without the need to reinvent the wheel
by developing new instruments (Boudreau, Gefen,
& Straub, 2001).
Despite the necessity and usefulness of metrics,
research on the development of KM assessment
metrics has remained largely underdeveloped
(Grover & Davenport, 2001). Equally, the practice
of KM assessment has remained underdeveloped
(Bontis, 2001). These underdevelopments arise
not only as a result of the complexity of assessing organizational initiatives but also because

Assessing Knowledge Management

KM is multi-facet, and knowledge has multiple


interpretations (Alavi & Leidner, 2001).
As KM is multi-faceted, it is has multiple values (Kankanhalli & Tan, 2005) and is understood
and assessed in a variety of ways (Shin, 2004).
For example, the Balanced Scorecard, Economic
Value Added, Intangible Asset Monitor, Market
Value Added, Technology Broker, and Skandia
Navigator have been discussed as different KM
assessment metrics employed by various organizations (Bontis, 2001; Bose, 2004). In a more
recent and structured review of KM assessment
metrics, five main areas of KM research metrics
(user of KM and KM system, KM System, KM
Process, KM Initiative, and Organization as a
whole) and eight areas of KM practice metrics
(House of Quality, Balanced Scorecard, Process
Classification Framework, Skandia Navigator,
Intellectual Capital Index, Intangible Asset Monitor, Economic Value Added, and Tobin Q) were
identified (Kankanhalli & Tan, 2005). We refer
the reader to the details on these KM metrics in
the works cited above.
This study opines on, extends, and crossvalidates results of previous studies (Asoh et al.,
2004; Crnkovic et al., 2004) that focused on the
KM process area within the research stream of KM
metrics. In addition, rather than developing scales
as in previous KM process metric research (Darroch, 2003; Lee et al., 2005), this study extends
the above previous research by conceptualizing
the KMI as a formative index (Diamantopoulos &
Winklhofer, 2001); applying the SEM analytical
technique as a means of confronting the a priori
theory of a relationship between KM and OP
with empirical data (Fornell, 1982); and crossvalidating the KMI model.
Furthermore, previous KM Process metric
research has focused only on processes, without
taking into account the management of the KM
processes or consideration of key factors that influence or enable the success of KM efforts, referred
to as critical success factors (CSF) (Asoh et al.,
2002). For example, Darroch (2003) developed

scales to measure three KM behaviors and practices in organizations which included knowledge
acquisition, knowledge dissemination, and knowledge responsiveness or use. Although these scales
could be useful in identifying knowledge gaps in
organizations, they do not take into consideration
factors that influence or enable the knowledge
behaviors and practices, i.e. KM CSFs.
Equally, Lee et al., (2005) constructed a scale
used in conjunction with an analytical measure
they call the knowledge management performance
index (KMPI). The KMPI focuses primarily on five
KM processes: knowledge creation, accumulation,
sharing, utilization, and internalization. While
the KMPI can be used to measure the quality of
organizational knowledge, just as in the case of
the study by Darroch (2003), the approach by
Lee et al., (2005) neither takes into account the
management of the five KM processes nor considers factors critical to the success of KM efforts,
i.e. KM CSFs.
But according to Asoh et al., (2002), to properly assess KM efforts organizations must not
only consider KMPs but also KM CSFs. Their
underlying assumption, to which we subscribe,
is that in every organization, there is persistent
interaction between knowledge management
processes under the influence of critical success
factors, orchestrated by some actors: employees,
customers, partners, and the environment of the
organization [in pursuit and support of organizational performance objectives]. (p.26). One
implication of the foregoing assumption is that it
is possible to cast and investigate an organizations
engagement in KM, as depicted by the KMI, within
a common frame of KMPs and CSFs.

Scope of the Knowledge


Management index (KMi)
The level of commitment to and engagement in
KM and, subsequently, the benefits that may accrue from managing knowledge, vary widely from
one organization to another because of the multi-

153

Assessing Knowledge Management

Table 1. Belardos Matrix: The reference base of the KMI model


Knowledge Management Process (KMPs)
Identification
Critical Success
Factors (CSFs)

Elicitation

Dissemination

Utilization

Technology
Leadership
Culture
Measurement

faceted nature of knowledge and KM. Although


any metric designed to assess organizational KM
efforts should take into consideration as many
facets as possible, it is important to develop a
simple and parsimonious model with a manageable
number of variables. Common denominators in
any such metric must include processes that are
common to KM (KMPs) and enablers or factors
critical to the success of KM (CSFs).
Drawing on research within the areas of KMPs
and/or CSFs (Arthur Andersen, 1996; ODell,
Wiig, & Odem, 1999), the KMI was proposed as
a metric to assess the degree of an organizations
engagement in KM within a common frame of four
key KMPs (knowledge identification, elicitation,
dissemination, and utilization) and four key CSFs
(technology, leadership, culture, and measurement) (Asoh et al., 2002).
For practical purposes, the KMI is framed
within an evaluation matrix that relates the four
key KMPs with four key CSFs. This matrix, referred to as Belardos Matrix, forms the reference
base of the KMI model, and is depicted in Table
1 (Asoh et al., 2002).
The choice of the elements constituting KMPs
and CSFs was influenced by the works cited above
and practical experience in teaching KM in an
accredited MBA Program at a Northeastern US
university over many years.

154

Knowledge Management
Processes (KMPs)
Different authors have attributed different names
to the same KMPs. We maintain that a parsimonious yet relevant and informative model consists
of the following stages: identification, elicitation,
dissemination, and utilization (Asoh et al., 2002).
These stages, we contend, effectively capture the
various discussions and practices relevant to most
KM programs.
Knowledge identification focuses on discerning the location and value of knowledge, the roles
and expertise of individual employees, constraints
to knowledge flow, and opportunities to leverage
knowledge. Knowledge elicitation focuses on
extracting knowledge from relevant sources to
meet the goals of the organization or to enhance the
organizations knowledge management system.
Knowledge dissemination focuses on distributing knowledge to organizational members, i.e.,
ensuring that those who have knowledge share it
with those who do not have it. Knowledge utilization is defined as the application of knowledge
for the attainment of organizational goals. With
knowledge recognized as a key organizational
resource, the capture (identification and elicitation), sharing (dissemination) and application
(utilization) of knowledge become fundamental
in creating, maintaining, and sustaining an organizations competitive advantage (Grant, 1996;
von Krogh, 1998).

Assessing Knowledge Management

Knowledge Management critical


Success factors (cSfs)
The CSFs identified in Belardos Matrix (Table 1)
-- technology, leadership, culture, and measurement - are closely connected to organizational
KM efforts, as explained below.
Technology is defined as any machine-based
mechanism that provides the foundation for
solutions that automate and inform various organizational processes. In the context of KM,
information technology (IT) is the main focus.
IT has evolved from being a driver of KM to
become a CSF in KM (Tsui, 2005). IT is critical
because it ensures the creation of KM systems,
the principal purpose of which is to add value to
KM (Quaduss & Xu, 2005). Furthermore, IT is
instrumental in the acquisition and dissemination
of knowledge (Sher & Lee, 2004) and supports
knowledge application and use by embedding
knowledge in organizational routines (Alavi &
Leidner, 2001).
Common IT tools (e.g., groupware, e-mail,
bulletin boards, online databases, intranets, data
warehouses, software agents, search engines,
retrieval and classification tools, e-collaboration
tools, portals, and content management systems)
facilitate KMPs (Hendriks & Vriens, 1999; Tsui,
2005) and enable the storage and sharing of organizational knowledge (Davenport, De Long, &
Beers, 1998; Hansen, Nohira, & Tierney, 2001).
The importance of IT to KM can be further appreciated when IT is viewed as a tool that enables
the transfer of knowledge among organizational
members across time and space. It is hoped that
organizational members, thus enabled, can internalize knowledge and apply it toward organizational goals (Zyngier, 2003).
Leadership is defined as the support provided
for KM activities by management. Such support
is critical to effective KM initiatives, particularly
when it comes to direction and evaluation (Brown
& Woodland, 1999; April, 2002). An APQC study
of the World Bank, found that its success in the area

of KM could be directly attributed to the efforts


of top management, which was instrumental in
removing barriers by making learning a priority
and eliminating the negative impacts of sharing
[knowledge]. (ODell, 2004) (p. 6). Contrary to
the situation at the World Bank, the inability of
top management to champion and stimulate KMPs
has been deemed responsible for the failure of
well-intentioned organizational KM efforts and
subsequent decline in OP (Chan & Chau, 2005).
Culture is broadly defined as embodying
people issues and is reflected in values, norms,
and practices (De Long & Fahey, 2000; Schein,
2001). It influences individual motivation for
learning (Amabile, 1997) which, in turn, shapes
knowledge-related norms within an organization.
Culture presents the greatest challenge to KM efforts since it can simultaneously act as a facilitator
and an inhibitor of success (Ruggles, 1998) and
presents a major barrier to creating and leveraging
knowledge (De Long & Fahey, 2000).
Measurement is defined as the continuous assessment of how well KM is proceeding within the
organization. Measurement focuses on evaluating
the appropriateness of knowledge, and knowledgerelated activities in relation to the needs of the
organization. Linking KM to performance results helps make the business case for managing
knowledge. Measurement provides indicators that
can help the organization align KM with business
strategy and allocate resources to increase the
organizational knowledge base (ODell, 2004).

the KMi dimensions and


latent Variable Model
To model the KMI in this study, we maintained
the initial theoretical framework of Belardos
Matrix (Table 1) with the same two questionnaire
items for each of the sixteen cells as proposed by
Asoh et al., (2002). However, we contend that
KM is multifaceted and instead of considering
the KMI as a mean score of the 32 questionnaire
items, we conceived the KMI as an unobservable

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Assessing Knowledge Management

Figure 1. The KMI model (LV Model Type II, with 32 indicators)

LV or construct associated with the 32 questionnaire items. In the absence of appropriate previous LV measurement models, it is necessary to
define a preliminary model of the dimensions
of a construct, since this enhances our ability to
understand and interpret empirical results (Sethi
& King, 1991; MacKenzie, 2003).
By definition, the four KMPs (identification,
elicitation, dissemination, and utilization) are
distinct concepts, each of which is a first-order
construct that can be cast across the frame of the
CSFs to take into account the impact of the CSFs
on the specific KMPs. Defining the KMI as the
degree to which an organization is engaged in
KM means it is the combination or aggregate of
various organizational engagements in KMPs that
determines the KMI, rather than the other way
around. On this basis, we modeled the KMI as
a second-order aggregate or formative construct
rather than a superordinate or reflective construct
(Edwards & Bagozzi, 2000; Diamantopoulos &
Winklhofer, 2001; Jarvis, Mackenzie, & Podsakoff, 2003).
When considered as a second-order formative
unobservable LV, the level of the KMI is dependent
on the summative effect of all four dimensions of
KMPs as influenced by the CSFs. The expectation
is that, as a formative LV, the KMI will increase
or decrease if any of its dimensional components increases or decreases (Diamantopoulos &

156

Winklhofer, 2001; MacKenzie, 2003). Though


considered at a higher level as a summation of
dimensions (Sethi & King, 1991), this conceptualization of the KMI as a formative LV is in line
with the one in which the summation occurs at
the item level for each dimension (Asoh et al.,
2005). Nevertheless, an important issue to address
concerns the nature of the first-order constructs
that constitute the second-order KMI model. An
accurate specification of first-order models (as either formative or reflective) is one mandatory step
toward the conceptualization and development of
good constructs (Diamantopoulos & Winklhofer,
2001; Jarvis et al., 2003; MacKenzie, 2003).
Within the perspective of multidimensional
constructs, the KMI model can be considered as
either a type II (reflective first-order and formative
second-order) or a type IV (formative first-order
and formative second-order) LV model (Jarvis et
al., 2003). To decide on the nature of the first-order
constructs in the KMI model, we opined on the
various decision rules proposed in the literature
(e.g. see Diamantopoulos & Winklhofer, 2002;
Jarvis et al., 2003; MacKenzie, 2003).
Given the definition of the KMI and its dimensions, we opted for reflective first-order constructs
and investigated the KMI as a type II LV model,
i.e., reflective first-order and formative secondorder. What this means is that the 32 indicators
(Q1, Q2Q32) of Belardos Matrix reflect the

Assessing Knowledge Management

Figure 2. KMI-OP LV research model

four first-order dimensions which are then aggregated to form the KMI model as a second-order
construct. Therefore, the KMI is depicted as a
formative second-order model with the KMPs as
dimensions, each of which is a reflective first-order
constructs (Figure 1).

reSearcH Model and


HYPotHeSeS
Since the main objective of this study was to refine
and cross-validate the KMI model (Figure 1) it
is important to relate the KMI in a nomological
network with OP. When organizations are engaged
in the KMPs under the influence of specific CSFs,
it is expected that the right knowledge will get to
the right person at the right time for the execution
of right tasks for the attainment of OP (Hibbard,
1997). Therefore, we hypothesized that:
H1:The degree to which an organization is engaged in KM is positively correlated with the
performance of the organization. In other words,
the KMI is positively correlated with OP.
The KMI-OP LV research model is presented
in Figure 2. In this model, OP was considered in
terms of non-financial measures. Non-financial
measures have been recognized as good substitutes for objective financial performance (Dess
and Robinson, 1984).
As KM attempts to enhance the skill level of
employees (Bose, 2004), one important non-financial dimension is human resources capabilities
(Stivers, Covin, Hall et al., 1998; Hackett, 2000).

And given this specific dimension of OP, the following sub-hypothesis is investigated:
H1a: The more an organization is engaged in
KM, the more will be the level of development of
its human resources capabilities. In other words,
the KMI is positively correlated with OP viewed
in terms of organizational human resources capabilities.
Considering the four dimensions of the KMI,
the resulting KMI-OP LV nomological network
model of this study is presented in figure 3, where
Q1, Q2, Q32 are the 32 items in the current KMI
instrument; and P1, P2, P16, are OP-related
items discussed later under methodology.

MetHodologY
KMi instrument
In the KMI instrument proposed by Asoh et al.,
(2002), 32 items are used covering the content areas of KMPs and CSFs identified in Belardos Matrix (Table 1). Following two pilot studies (Asoh
et al., 2004; Crnkovic et al., 2004), the instrument
was modified to ensure clarity and avoid jargon.
In the final version of the instrument, respondents
were asked to rate: (1) the degree to which each
item reflected the organizations engagement in
specific KMPs as influenced by specific CSFs;
and, (2) the importance of the concept expressed
by each item to the organization.
The response on the importance of the concept
was used to compute a mean importance score
required in the item purification process as an
external criterion (DeVellis, 1991; Spector,
1992). The rationale for the use of this external
criterion is that since the importance score
reflects the value an organization places on its
KMPs and CSFs, only item measures that correlate positively and highly with the importance
score are meaningful and should be retained for

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Assessing Knowledge Management

Figure 3. The KMI OP nomological network model

further analysis (Sethi & King, 1991). All items


were measured on a 5-point Likert scale ranging
from 1 (strongly disagree) to 5 (strongly agree).
The 32 KMI items are presented in Appendix A.
The OP instrument proposed by Asoh et al.,
(2004) consisted of 16 items (P1, P2, P3 P16),
reflecting three non-financial OP areas: Goal attainment: P1, P2, P3, P4, P9; Human resources capabilities: P5, P6, P7, P8, P11, P12; and Customer
service: P10, P13, P14, P15, P16. Responses to
the OP items were made on a 5-point Likert scale
ranging from 1 (strongly disagree) to 5 (strongly
agree). The 16 items are presented in Appendix B.

data collection, Sample, and


descriptive Statistics
Data Collection: Data were collected using the
survey method from two purposive samples of
participants in an international Executive MBA
program at a Northeastern U.S. University. The
first survey was conducted amongst participants
based in the US, the second amongst participants
based in Europe (Germany and Switzerland). Each
of the surveys was administered by one of the
authors in person. Those surveyed were briefed
beforehand and participation was voluntary. Since
the unit of analysis was the organization, only one
participant from each organization was chosen.
In lieu of financial incentives, as suggested by

158

(Dillman, 2000), participants were promised a


summary of the results.
Sample: Of the 52 questionnaires administered
to U.S. participants, 38 were useable (response
rate=73.1%). Of the 58 questionnaires administered to European participants, 44 were useable
(response rate=75.9%). Thus, of the 110 questionnaires administered, 82 yielded useable results
(response rate=74.6%). This high response rate
can be attributed to the method of administering
the survey on the spot; this method also alleviated
the need to test for response bias.
Descriptive Statistics: Participants in the study
came from both the private and public sector. 10 of
the 82 (12.2%) were government employees--6 in
the US sample and 4 in the European. The remaining 72 (87.8%) were privately employed--32 in the
US sample (44.4%), 40 in the European (55.6%).
Although many government organizations have
embraced KM, we believe that their approach to
KM is substantially different from that of private
companies. Given our objective of refining and
cross-validating the KMI model, we thus excluded
the ten government samples from further analysis.
Most of the organizations were well established. 54 (75%) were at least 15 years old; only
3 (4%) were less than 2 years old, while 19 (21%)
were between 2 and 15 years old. 15 companies
(21%) employed fewer than 50 employees; 27
(38%) employed more than 2,000 employees,

Assessing Knowledge Management

while 30 (41%) employed between 50 and 2,000


employees. Annual revenues mirrored organizational size: 16 companies (22%) had revenues of
less than US $50 million; 25 (35%) had revenues
above $2 billion, while 31 (43%) had revenue
between $50 million and two billion.
Of the 72 private sector respondents, 11 (15%)
were female and 61 (85%) were male; 43 (60%)
were mid-level managers and directors; 13 (18%)
were upper level executives, i.e., presidents, vice
presidents, chief information/knowledge officers;
16 (22%) had other titles. 37 (52%) of the respondents had held their current position for at
least two years, 35 (48%) for two years or less.
38 respondents (53%) held BAs/BScs, 28 (39%)
MAs/MBAs/MScs, 5 (7%) had DBAs/PhDs, and
1 (1%) had another degree.

KMi instrument Purification


Equality of Sample Test: A preliminary test was
conducted to determine whether responses from
the two samples (U.S. and European) were statistically different from each other. Levines test
for equality of variance indicated that there were
no significant differences for any item in the
two samples. The items were then subjected to
a screening or purification process to eliminate
garbage items.
Purification of KMI Measures: Various approaches have been suggested and used in the
purification of items for construct refinement.
For example, DeVellis (1991) and Spector (1992)
suggest the use of correlational analysis in which
each item is correlated with an external criterion
variable and only items that significantly correlate
with the external variable are retained. To purify
items for index construction, it has been suggest
that a suitable external variable would be an item
that summarizes the essences of the construct that
the index purports to measure (Diamantopoulos
& Winklhofer, 2001).
In the correlational analysis, items that are uncorrelated or negatively correlated with an overall

measure are considered poor items and dropped in


the purification process as recommended (DeVellis, 1991; Spector, 1992). Recently, substantive
and empirical criteria have been employed for
items purification (Matsuno, Mentzer, & Rentz,
2000). The substantive criteria entails examining
the breadth of the theoretical content coverage by
items while the empirical criteria entails examining
descriptive statistics, fit statistics, and correlational
and reliability statistics. Items with poor content
coverage, low fit indices, or low correlations were
deleted in the purification process.
Within the sphere of SEM, a split-sample approach to item purification has been used. In this
approach data were split into two equal datasets
(validation and holdback sample) (Chan, Huff,
& Copeland, 1998). Using the validation sample,
poorly performing items in the SEM model were
dropped in the purification process in which an
initial model was revised to obtain a refined
model. Using the holdback sample, the resulting
refined model was tested for parameter stability
without any further modifications or dropping of
purified items. More recently, an SEM purification
approach using multiple survey samples has been
used (Netemeyer, Krishnan, Pullig et al., 2004).
Here, items that loaded low (<0.50) or had very
high loadings (>0.95) were deleted in the purification process from one sample data to another.
We opined on the above research on items
purification and employed a mix approach to
purify the KMI item measures at two levels. At
the first level, we carried out item correlational
analysis with the importance score. The importance score was the external criterion on
the KMI instrument; and reflects the value an
organization places on specific KMPs and CSFs.
Only item measures that correlate positively and
highly with the importance score were retained
for further analysis. As a result of the correlation
analysis, the item pool was reduced from 32 to
19 after the first level of the KMI items purification. The initial and pre-final distributions of the
KMI items within Belardos Matrix are shown

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Assessing Knowledge Management

Table 2. Distribution of KMI Items (Before, during, and after two quantitative screenings)
Knowledge Management Process (KMPs)
Identification
Critical Success
Factors (CSFs)

Dissemination

Utilization

Technology

Q1* Q2*

Q9* Q10

Q17* Q18*

Q25 Q26*

Leadership

Q3 Q4

Q11* Q12

Q19* Q20

Q27* Q28

Culture

Q5 Q6

Q13 Q14

Q21 Q22

Q29 Q30*

Measurement

Q7* Q8

Q15 Q16*

Q23 Q24

Q31 Q32

in Table 2, where the 19 items retained after the


first level of the purification process are bolded
and underlined. As presented in Table 2, none of
the KMPs retained all the eight items across all
the CSFs. Although only knowledge elicitation
retained seven items across all four CSFs, it is
important to note that the other three KMPs retained items, distributed across three CSFs. If all
the items along one column (KMPs) or across one
row (CSFs) were eliminated through the screening, the scope of the KMI construct would have
been changed, and redefining the construct would
have been necessary.
At the second level of purification, we adopted the SEM item purification approach discussed above (Chan et al., 1998). We split the
reduced dataset with 19 items into two equal
samples (calibration and validation) as discussed
below under KMI Instrument cross-validation.
Further purification of the 19 items using the
calibration sample in an SEM model resulted in
the reduction of the item pool to 12 items (with
asterisk in Table 2). The 12 items constituting the
final refined KMI instrument used in the SEM
measurement and structural models validation
and cross-validation are in bold and asterisks
(Appendix A) and further discussed in section
five. It is worth noting that even though seven
items were dropped, and the KMI framework still
maintained, testing of the stability and validity of
the KMI model with the reduced number of items
can only be ascertained through cross-validation
in a nomological network.

160

Elicitation

KMi instrument cross-Validation


Calibration and Validation Samples: After the first
level of item screening, the combined dataset of
19 items was systematically split into two subsamples (calibration and validation or holdout)
(Grant & Higgins, 1991; Chan et al., 1998). First,
responses with even numbers from both the U.S.
and European samples were selected to constitute
the calibration sample, while odd-numbered responses were retained to constitute the validation
sample. Second, the calibration and validation
samples were tested for statistical differences on
questionnaire items.
The calibration and validation datasets that
resulted from this split each had 36 cases. Levines
test for equality of variance revealed no significant
differences between the two datasets for all 19
KMI items as well as seven demographic variables
(age, size, and revenue of company, employee
title, years in service with company, years in
current position, and gender of respondent). A
significant difference (2 tail, p=0.005) was noted
for the educational level of respondents. This may
be explained, in part, by the uneven distribution
of respondents across the four educational levels:
BA/BS, MBA/MA/MS, DBA/PhD, or other (see
demographics). We consider this difference to be
an isolated incident when all eight demographic
variables are examined. We maintain, therefore,
that the calibration and validation samples were
not statistically different from each other and could
be retained for further analysis. The calibration
sample was subsequently used to calibrate, purify,

Assessing Knowledge Management

and test the KMI measurement and structural


models while the validation sample was used to
cross-validate these models.
Cross-validation Approach: After generating
the measurement and structural models based
on post hoc modification using the calibration
sample, we then cross-validated these models
using the validation dataset (Grant & Higgins,
1991; Barclay, Higgins, & Thompson, 1995;
Chan et al., 1998).
Cross-validation is established when the best
model obtained using the calibration sample replicates over the validation sample (Bryne, 2001).
Since the PLS SEM analytic approach does not
model fit indices, replication is judged by comparing the level and significance of: (1) item loadings
and weights in the measurement models; (2) paths
coefficients; (3) variances explained in the structural models within a nomological network; and
(4) overall construct validity for the calibration
and validation samples.
Cross-validation Nomological Network:
Another theoretical question of interest in crossvalidating the KMI is the relationship between the
KM and OP. We anticipate that when organizations are engaged in KMPs under the influence of
specific CSFs, the right knowledge will get to the
right person at the right time for the attainment
of OP objectives (Hibbard, 1997). In the current
context, relating the KMI to OP would constitute
a useful nomological network within which the
validity of the refined KMI model can be tested
and cross-validated. In line with previous studies (Asoh et al., 2004; Crnkovic et al., 2004), we
hypothesize that the KMI is positively correlated
with OP, i.e., the degree to which organizations
are committed to, and engaged in KM, will be
positively and significantly associated with OP.
The OP instrument (Appendix B) had 16 items,
the mean of which was used in previous research.
Since these items represented three OP-related
areas (goal attainment, human resources capabilities, and customer services), the logic of the SEM
modeling technique requires conceptualizing OP

as a three-dimensional second-order construct.


However, the focus of this study was not on the
OP construct. In order to keep the nomological
network and corresponding analysis simple, as
well as minimize the number of parameters to be
estimated in the SEM models we decided to use
the six items from one dimension of OP (human
resources capabilities, HR-Cap).
Levines test for equality of variance indicated
that there were no significant differences for any
of the six HR-Cap items (P5, P6, P7, P8, P11,
and P12) in the two samples. After SEM analysis
using the calibration sample, three items (P5, P6,
P7) were retained for use in the cross-validation
based on item loadings considerations (bold and
asterisk in Appendix B).

Structural equation Modeling


(SeM) analytical approach
The SEM analytical approach, unlike traditional
approaches (e.g., regression analysis), allows us
to examine multiple variables simultaneously
(Gefen, Straub, & Boudreau, 2000). SEM makes
it possible not only to confront a priori theory and
hypotheses with empirical data but also to model
unobservable latent variables such as the KMI
(Fornell, 1982).
In this study, we used the Partial Least Squares
(PLS) SEM approach. We preferred PLS to other
SEM approaches, e.g., LInear Structural RELationships (LISREL), for a number of reasons. First,
PLS is more suitable for exploratory/confirmatory
research, is predictive, maximizes the variance
explained, is more robust to multivariate data
distributions, and does not require a large sample
size (Chin & Newsted, 1999; Gefen et al., 2000).
In fact, PLS has been recommended as the best tool
for early stage research in where the theoretical
background is still developing and not yet very
strong (Falk & Miller, 1992), as is the case here.
Second, PLS is flexible with regard to sample size
considerations: unlike LISREL, acceptable results

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Assessing Knowledge Management

can be obtained with small sample sizes (Fornell


& Bookstein, 1982; Fornell, 1982).
Sample size consideration was important because of the need to partition the dataset to have
a hold-out sample for cross-validation purposes.
The PLS sample size criterion is based on the
portion of the model with the largest number of
predictors. While a minimum of 30 to 100 cases
often meets power analysis requirements (Chin &
Newsted, 1999), the general sample size requirement is considered to be ten times which ever is
greater, A or B, where A is the greatest number of
formative indicators on any single construct in the
model and B is the greatest number of exogenous
latent variables impacting any single construct
in the model (Chin, 1998). A weak rule of thumb
calls for sample sizes of five, rather ten times A
or B as being acceptable for PLS analysis (Gopal,
Bostrom, & Chin, 1992).
With the KMI modeled as a four-dimensional
formative construct, a sample size of 40 would be
required for the more stringent rule of ten, while
a sample size of 20 would be sufficient for the
weak rule of five. Although the sample size of 36
for both the calibration and validation samples
is slightly less than the required size when the
stringent rule of ten is applied, it is more than
sufficient when the weak rule of five is applied.
In previous research, Lohmoller used a sample
size of 10 to estimate a model with 27 variables,
and another model with 96 indicators and 26
constructs was estimated with 100 cases (cited in
Barcaly et al.,1995). We believe, therefore, that
estimated model parameters would not be unduly
affected by the sample size, given that we have
only 15 indicators and 20 parameters to estimate
(see KMI structural model discussed later).

data analysis using the


PlS analytical tool
We conducted SEM data analysis using PLS Graph
version 03.00 Build 1126 (Chin, 2005). Based on
our conceptualization of the KMI, we adopted

162

the PLS molar approach (Chin & Gopal, 1995;


Iivari, 2005) for the PLS analysis; modeling the
KMI as a four-dimensional type II LV construct in
a reflective first-order, formative second-order
configuration (Jarvis et al., 2003).
Knowledge identification (IDENT), elicitation
(ELICIT), dissemination (DISSEM), and utilization (UTILIZ) were considered as first-order
reflective LV, which acted as formative indicators
of the second-order KMI construct since they determine the level of the KMI of the organization
(Figure 1). Subsequently, we used the two-step
approach to SEM (Anderson & Gerbing, 1988) to
complete the data analysis using the calibration
and validation samples in separate analyses. First,
the calibration sample was used to investigate the
measurement model which depicts the relationship
between the items and their respective constructs
(IDENT, ELICIT, DISSEM, and UTILIZ for KMI
and human resources capabilities (HR-Cap). Second, the calibration sample was used to investigate
the KMI structural model in a nomological network
with OP. The foregoing analyses were repeated
using the validation sample. In both the calibration and validation analysis, we used a bootstrap
sample of 200 to estimate the parameters.
For the calibration and validation models, we
assessed the measurement and structural models
following the statistical measurement modeling
approach (Segars, 1997) and the guidelines for
validating research instruments (Straub et al.,
2004). Specifically, we assessed (1) reliability of
measurements within the KMI construct dimensions and the HR-Cap construct and (2) validity
of measurements between the KMI construct dimensions and the HR-Cap construct. In terms of
reliability, we assessed (1) the internal consistency
reliability and (2) unidimensionality of items; and
in terms of validity, we assessed (1) convergent
validity, (2) discriminant validity, and (3) nomological validity. The results of these assessments
are presented and discussed in the next section.

Assessing Knowledge Management

Figure 4. Measurement models for calibration and validation samples (all loadings significant at
p=0.1level)

reSultS and diScuSSion


Measurement Models
The essence of assessing the measurement model
is to ensure that the constructs are accurately measured. The measurement models for the calibration and validation samples are shown in Figure
4. All loadings in both samples were significant
at the p=0.1 level.
We consider the SEM measurement model as
a form of confirmatory analysis (Loehlin, 2004)
through which the reliability (i.e. internal consistency reliability and unidimensionality) of construct items can be assessed before assessing the
constructs themselves. Unidimensionality of an
item means the item reflects only one underlying
construct (Segars, 1997). Without acceptable
unidimensionality, it is not meaningful to talk
about statistics such as composite scores (Gerbing
& Anderson, 1988) used in previous KMI studies
or other statistics that involve manipulation of
items to make judgments on constructs. In effect,
unidimensionality is a necessary condition that
should precede both reliability and validity con-

siderations in that order (Segars, 1997; Ping Jr.,


2004).
The verification criterion for unidimensionality
is that a set of items measuring a given construct
or sub-construct should exhibit a parallel correlational pattern with other sets of items measuring
other constructs or sub-constructs (Segars, 1997)
(p. 109). To assess unidimensionality of the measurement models in the calibration and validation
samples, we computed a table of item loadings
and cross-loadings on the various constructs for
both samples (Figure 5).
According to the unidimensional criterion, an
item should significantly load only on the latent
construct to which it is assigned. The parallel
correlational pattern is evident in Figure 5 for the
items assigned to each construct, indicating that
all items are unidimensional except one item,
Q26, which loaded high on two constructs (DISSEM and UTILIZ) in the calibration sample. This
item however loaded high only on the UTILIZ
construct in the validation sample as expected.
When we examined the item (Q26) which read
my organization employs technology that makes
the utilization of knowledge resources transparent
to all, we noted that the item was meant to capture

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Assessing Knowledge Management

Figure 5. Item cross-loadings on constructs demonstrating unidimensionality

the impact of the technology CSF on the knowledge utilization KMP. It is possible that the words
transparent to all might have been interpreted in
the sense of dissemination by most respondents
within the calibration sample who also associated
the item with knowledge utilization as expected.
Furthermore, the relatively very low loading of
the same item on the DISSEM construct in the
validation sample and its persistent high loading
on the UTILIZ construct in the same sample seem
to suggest some possible hidden variation between
the two samples rather than specific problems
with the item. We decided to maintain the item.
Having established unidimensionality of the
items, we proceeded to look at items loading
and reliability. The loadings and weights of the
items in the measurement models are indicated in
Figure 4, with numbers in brackets representing
weights. All item loadings in both calibration and
validation samples were significantly related to
their respective constructs at or above the p=0.01
level. The loadings were also within the limit or

164

exceeded the threshold value of 0.70 indicating


good reliability with the exception of item Q19
in the calibration sample which loaded at 0.52.
Although some researchers (Yang, Cai, Zhou et
al., 2005) have retained items with loadings as
low as 0.47 in cross-validation studies, we considered dropping the Q19 item since it was far
below the threshold value of 0.70. However, this
item loaded as expected (0.81) in the validation
sample. Barclay et al., (1995) pointed out that it is
not uncommon to find items load below the 0.70
threshold when newly developed instruments are
used in SEM modeling. We attributed the fluctuation to possible slight variation in interpretation of
the item by the US and European samples rather
than problems with the item and therefore maintained the item. In addition, maintaining the item
also ensured balanced item blocks in the models.
The means, standard deviations, internal consistency, construct inter-correlations, convergent
validity, and discriminant validity are presented in
Table 3 and discussed in the following paragraphs.

Assessing Knowledge Management

Table 3. Construct means, standard deviations, consistencies, validity, inter-correlation


Inter-correlation of latent constructs and square root of average
variance extracted (SQR (AVE)) in diagonalsa .

Internal Consistency

Mean

Standard
Deviation

Cronbach
Alpha

Composite Reliability

IDENT

3
3

8.04
7.40

2.39
2.75

0.61
0.73

0.80
0.85

0.75
0.81

ELICITa

3
3

8.34
8.40

2.81
2.32

0.74
0.68

0.85
0.83

0.63
0.49

0.81
0.79

DISSEMa

3
3

9.50
9.86

2.73
3.20

0.64
0.83

0.81
0.90

0.46
0.61

0.46
0.28

0.77
0.86

UTILIZa

3
3

7.77
7.75

2.58
2.44

0.54
0.57

0.77
0.78

0.44
0.60

0.58
0.56

0.44
0.33

0.72
0.74

HR-CAPa

3
3

9.44
8.58

2.91
2.73

0.68
0.76

0.83
0.86

0.30
0.35

0.30
0.31

0.40
0.20

0.39
0.41

No. of
items

IDENT

Construct

ELICIT

DISSEM

UTILIZ

HR-CAP

0.78
0.82

In each cell: Upper number: calibration sample; lower number: validation sample.

Since loadings are correlations, the reliability


of an item can also be assessed as the square of
the item loading. An item is considered reliable
if its squared loading is greater than or equal to
0.50, meaning 50 percent of the variance in the
observed variable is associated with the construct
for which the variable is a measure. The squared
loadings of all items were within reasonable
limits or exceeded the 0.50 threshold in the calibration and validation samples (with the exception
of item Q19 whose reliability fluctuated between
the two samples) again providing evidence of
acceptable item reliability.
Internal consistency is often examined in support of the reliability of items through the Fornell
and Larcker Measure (Fornell & Larcker, 1981).
This statistic which is computed as the sum of
the loadings, all squared, divided by the sum of
the loadings, all squared, plus the sum of the error terms, is directly obtainable as the composite
reliability from the PLS Graph software. For
adequate reliability based on internal consistency,
the composite reliability should be greater than
or equal to 0.70 (Fornell & Larcker, 1981). All
composite reliabilities for item constructs in the
calibration and validation samples were well above
the 0.70 threshold. The composite reliabilities for

the calibration sample varied between 0.77 and


0.85 while those for the validation sample varied
between 0.78 and 0.90.
Cronbach Alpha, a traditional measure of
reliability in non-SEM research was computed
for comparison with the composite reliability.
An Alpha value of 0.70 is considered moderate
and acceptable for early stage research (Nunnally,
1978). The Alpha values for the constructs in the
calibration sample varied from 0.54 to 0.74 while
those for the constructs in the validation sample
varied from 0.57 to 0.83. While each construct
had a moderate Alpha value above the benchmark
value (0.70) in either the calibration or validation
sample, this was not the case for the UTILIZ
construct which had low values (0.54 and 0.57)
in both samples.
We explain the low Alpha value for the
UTILIZ to be the result of a possible offending
contribution of item Q26 which loaded high on
DISSEM as previously discussed. Nevertheless,
a comparison of Alpha measures and composite
reliability measures shows that Alpha measures
seem to suggest the KMI is far from being in its
best form. Not withstanding, it is worth noting that
the Alpha measure has been noted as not being
the best measure of reliability compared to the

165

Assessing Knowledge Management

composite measure by the Fornell and Larcker


Measure. The argument is that the Fornell and
Larcker Measure is superior because it uses items
loadings estimated in a causal model, and in which
the item loadings are not assumed to have equal
weights as is the case with the Alpha measure
(Fornell & Larcker, 1981). In addition, the Alpha measure is sensitive to the number of items
in a scale, which is not the case for the Fornell
and Larcker Measure, which is considered more
universal (Barclay et al., 1995). Equally, Alpha is
sensitive to unidimensionality. Deviations from
unidimensionality turn to increase the estimate of
Alpha (Shevlin, Miles, Davies et al., 2000). As
already observed, the KMI constructs exhibit high
unidimensionality (Figure 5), which may explain
the low values of Alpha.
Convergent validity refers to the extent to
which a set of items thought to reflect a given
construct converge or show high correlations
with one another (Straub et al., 2004) and act as
if they were measuring the underlying construct
because they shared a common variance. The
statistic is depicted as the ratio of the amount
of variance of the set of items captured by the
underlying construct to the total variance of the
construct, including variance due to measurement
errors; and is measured by the average variance
extracted (AVE) (Fornell & Larcker, 1981). An
AVE of less than 0.5 is judged unsatisfactory since
more variance in the construct is attributable to
errors. The AVEs are directly obtained from the
PLS-Graph software.
Both the calibration and validation samples
exhibit adequate convergent validity for the constructs since all AVEs (the square of values in the
diagonals of Table 3) are above the 0.50 threshold:
from 0.53 to 0.65 (calibration sample) and from
0.54 to 0.74 (validation sample).
Discriminant validity indicates the extent to
which one construct is different from other constructs (Grant & Higgins, 1991; Barclay et al.,
1995; Hulland, 1999). The criterion for discriminant validity is that the average variance extracted

166

(AVE), i.e., the average variance shared between a


construct and its measures should be greater than
the variance shared between the construct and other
constructs in the model (Fornell & Larcker, 1981;
Barclay et al., 1995; Chin, 1998; Hulland, 1999;
Iivari, 2005). In other words, the average variance
shared between a construct and its measure must
be greater than the squared correlation between
two constructs.
In order to judge on the nature of the discriminant validity, the square of the average
variance extracted (SQR(AVE)) is placed in the
diagonal position of the correlation matrix for
the constructs under consideration. For adequate
discriminant validity, the elements in the diagonal
position (SQR(AVE)) should be greater than the
off-diagonal elements in the corresponding row
and columns. The diagonal elements exceeded all
the off-diagonal elements in both the calibration
and validation samples. In Table 3, the diagonal
elements for the calibration sample (upper value
in the diagonal cells) are bolded.

Structural Models
The structural models for the calibration and
validation samples are presented in Figure 6. We
assessed the structural models by examining the
significance of: (1) path coefficients among the
constructs; and, (2) variance explained (Falk &
Miller, 1992).
To obtain the path coefficients, we conducted
a bootstrap analysis with an initial sample size of
200 as recommended by Chin (2005). The PLS
software provides t-statistics for the path coefficients. For both the calibration and validation
samples, all path coefficients were significant at
the p=0.1 level or higher.
To ensure more confidence in the stability of the
path coefficients, we also assessed the structural
model by considering the significance of variance
explained based on the F-statistics (Falk & Miller,
1992) with the F-statistics computed as:

Assessing Knowledge Management

Figure 6. Structural models for calibration and validation samples (all paths significant at p=0.1level)

Table 5. Construct contribution to variance explained and significance


Path
IV => DV a

N=36;
m

Loading

Correlation

[Partial] R2

F(m, N-m1)

Critical
F(m,N-m-1)

R2 p-level
(2 tail Sign.)

KMI => HRCAP

1b
1

0.45
0.53

0.45
0.53

0.20
0.28

8.61
12.90

7.44
9.01

0.01
0.005

IDENT=> KMI

4
4

0.28
0.37

0.80
0.89

0.23
0.33

2.28
3.38

2.12
3.19

0.1
0.025

ELICIT => KMI

4
4

0.35
0.28

0.89
0.74

0.31
0.21

3.42
2.10

3.19
2.12

0.025
0.1

DISSEM=>
KMI

4
4

0.32
0.34

0.79
0.75

0.25
0.25

2.56
2.66

2.12
2.12

0.1
0.1

UTILIZ =>
KMI

4
4

0.27
0.27

0.82
0.77

0.22
0.20

2.17
1.99

2.12
2.12

0.1
ns

IV is exogenous & DV is endogenous construct.b Upper number in each cell is for calibration sample while lower number is for validation sample.

F=

R2 m

(1 R ) (N m 1)
2

where R2 is contribution to variance explained,


N is the sample size used in the model, with
N-1 degree of freedoms, and m is the number of
predictors of the construct. The R2 value (0.20)
for the KMI=>HR-Cap path for the calibration
sample was significant at the p=0.01 level, while
the R2 value (0.28) for the same path in the validation sample was significant at the p=0.005 level.

The results of these assessments are presented


in Table 5.
We also investigated the partial contributions
of each of the four dimensions of the KMI
model to the value of the KMI and the significance
of such contributions. ELICIT made the greatest
contribution (31%) to the KMI in the calibration
sample while IDENT made the greatest contribution (33%) in the validation sample. UTILIZ made
the smallest contribution in both samples: 22%

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Assessing Knowledge Management

and 20%, respectively, in calibration and validation. All partial contributions were significant in
both samples at the p=0.1 level or above, except
UTILIZ whose partial contribution was narrowly
non-significant at the p=0.1 level in the validation
sample (see Table 5).
While the non-significance of the contribution
of UTILIZ in the validation sample raises some
questions, Falk & Miller (1992) maintain that,
between values of significance and values of
variance explained, preference should be given
to variance explained. According to these authors,
variances explained should be greater than or
equal to 0.10; interpreting variances of less than
0.10, even if statistically significant, offers little
or no benefit. In fact, Falk and Miller strongly
argue that a predictor should only be maintained
in a model if the contribution made by that predictor is at least 1.5% of the total variance of the
predicted variable. Given the conceptualization
of the KMI as a formative construct, the four
dimensions are predictors of the KMI. Evidently,
the 20% contribution of UTILIZ in the validation model is more than ten times the minimum
required contribution (1.5%) advocated by Falk
& Miller (1992). These considerations alleviate
any worries about the nature and stability of the
four dimensions of the KMI in both the calibration
and validation samples.

concluSion
Summary of Study and results
The main purpose of this study was to refine
and cross-validate the KMI model proposed by
Asoh et al., (2002) so that a robust model can be
available for both researchers and practitioners.
In refining and cross-validating the KMI model,
we used empirical data to verify two hypotheses.
First, that the KMI is a multidimensional construct,
and second, that the KMI is significantly and
positively correlated with OP.

168

We rationalized the multi-dimensional perspective of the KMI on the grounds that the
KMPs (identification, elicitation, dissemination,
and utilization) are distinct from each other and
can be measured using different items even if
they are impacted by the same or different CSFs
(technology, leadership, culture, and measurement). In addition, we also maintained that KM
is a multi-faceted organizational phenomenon that
cannot be effectively studied using a reductionism approach based on the mean of responses to
questionnaire items.
For the refinement and validation we employed
quantitative criteria at two levels (correlational
analysis and SEM analysis) using empirical data
collected from U.S. and European samples to refine
and reduce the initial pool of 32 items in the KMI
instrument to 12 items. We further investigated
and compared the psychometric properties of the
12 item refined version of the KMI instrument
with a calibration sample and cross-validated the
model using a validation sample.
Results of our analysis confirmed the multidimensionality of the KMI. Each of the four
dimensions significantly contributed to the KMI.
We also found that the psychometric properties
of both the calibration and validation samples
were within acceptable limits as prescribed in
the SEM literature. The validation sample faithfully replicated the properties of the calibration
sample, thereby confirming cross-validation of the
KMI model. Furthermore, in both the calibration
and validation samples, the KMI was found to
be positively and significantly related to OP by
virtue of the positive and significant path coefficient between the KMI and HR-cap as well as
the significant variance explained (Table 5). The
findings of this study therefore confirm similar
findings from previous research by Asoh et al.,
(2004) and Crnkovic et al., (2004).

Assessing Knowledge Management

research contributions
and implications
KM is an emerging field and developing and using
constructs is an important step in the development
and advancement of theory in the field. In order
not to re-invent the wheel, researchers are urged
to use existing constructs in theory development.
Such an approach makes it possible for comparative evaluation of research results. However, it
is important to know the properties of scales or
indexes developed to measure a construct before
deciding to use the construct (Matsuno et al.,
2000) since results obtained from using inadequate
constructs can be misleading and detrimental to
the development of theory and advancement of
knowledge (MacKenzie, 2003; MacKenzie, Podsakoff, & Jarvis, 2005). This study successfully
refined and cross-validated the KMI models using
the SEM approach via PLS.
Post hoc model modifications and adjustments
are common practices in SEM analysis. As Loehlin
(2004) points out, once a model has been modified
or adjusted on the basis of its fit or lack of fit with
a given dataset, its statistical status is precarious
until it can be tested on a new body of data that
did not contribute to the adjustment (p. 234).
The study cross-validates the KMI model. Crossvalidation of research models is important because
it not only alleviates any concerns regarding model
specification (Rigdon, 1998; Loehlin, 2004) but,
more importantly, demonstrates that the KMI
model can generate consistent results, and will
thus be of practical value in making predictions
among members of the reference population upon
which the model is based. (Sheskin, 2004) (p.
1002). A refined and cross-validated KMI model
makes for easy and confident replication of this
study in future research.
Related assessments of KM have focused on
the development of scales (e.g. Darroch, 2003; Lee
et al., 2005). This study differentiates itself from
the others by casting and investigating the KMI
as a formative latent variable, thereby applying

to the KM field research on formative measures


and index creation gleaned in other fields (Fornell,
Lorange, & Roos, 1990; Diamantopoulos & Winklhofer, 2001; Arnett, Laverie, & Meiers, 2003).

Management implications
This study revealed the positive and significant
relationship between the KMI and OP. Specifically, the study verified previous research on the
predictive validity of the KMI in the nomological
network with OP, with OP considered in nonfinancial terms of HR capabilities. The study
contributes to management understanding of the
possibility to predict OP based on organizational
KM efforts. Given the definition of the KMI and
the positive correlation between the KMI and OP,
managers would note that greater engagement in
KM would lead to greater accrued or expected
KM benefits and consequently higher accrued
or expected OP.
In addition, the study revealed that although all
four KMPs contribute significantly and positively
to the value of the KMI, knowledge identification,
elicitation, and dissemination seem to contribute
more (respective averages of 28%, 26%, and 25%
for calibration and validation samples) compared
to knowledge utilization (average 21%). While
companies stand to benefit more when knowledge
is used, the lower contribution of knowledge
utilization despite high knowledge identification,
elicitation, and dissemination may seem to suggest
that organizations have to pay more attention to
knowledge utilization.
When we examined the 12 items retained for
the refined KMI within Belardos Matrix, we
found that three CSFs (technology, leadership,
and measurement) impacted at two or more KMPs
while one CSF (culture) impacted only one KMP
(utilization). Although one interpretation may be
that culture is not as important as other CSF when it
comes to knowledge identification, elicitation, and
dissemination, we believe a contrary interpretation
is in order: managers should rather focus greater

169

Assessing Knowledge Management

attention on the culture of knowledge identification, elicitation, and dissemination. This ensures
that the contribution of culture is felt when it
comes to anticipating KM benefits since the KMI
is a formative, rather than a reflective construct.
The KMI model with the refined 12 item instrument should appeal to managers. Managers will
be able to easily use the new instrument to assess
the degree of their organizational commitment to,
and engagement in KM. Such preliminary assessments would further help managers understand
and anticipate potential KM benefits. Those
organizations that are able to identify the knowledge they need, acquire it, and disseminate it so
that it can be utilized in business operations, will
increasingly be able to appreciate and eliminate
knowledge gaps in order to improve KM benefits
and ultimately OP.

limitations and directions


of future research
The research described herein has a number of
limitations. First, two configurations of the KMI
model (first-order unidimensional and second-order multidimensional models) were discussed but
only the multidimensional model was considered
most appropriate and investigated. Our position
does not exclude the possibility of a first-order
formative index for assessing KM. Such an index
could be investigated if the KMI is not defined in
terms of KMPs, which we maintain are distinctive from each other and constitute individual
constructs. Second, OP is multi-faceted. Only
one facet of OP associated with human resources
development capabilities, was considered when
testing the KMI model in a nomological network.
Future research, would investigate the relationship
between the KMI and other facets of OP. Third,
the item reduction process almost resulted in the
elimination of culture as a CSF. Only one item
in the reduced scale relates culture to one of the
KMPs (knowledge utilization).

170

We believe the impact of culture as a CSF is


not limited to knowledge utilization only. Even
though the model based on the reduced items
was successfully cross validated, future research
should consider augmenting the items to ensure
a balanced representation of the CSFs. Fourth,
although an international sample was used in the
study and the KMI model was found to be stable
both in the calibration and validation samples,
the results cannot be generalized to all settings
without further testing. Fifth, the generalizability
of the findings of the study is also limited in view
of the study sample size, which is based on the
weak, rather than stringent rule of thumb. Another
direction for future research is replication studies
with larger sample sizes.

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Assessing Knowledge Management

aPPendix a: KMi inStruMent (q1, q2, q3 q32).


Instruction: In this section, a statement is made concerning some aspects of knowledge management in
your organization. You should indicate how important (IMP) you think the aspect is, and how effective
(EFT) it is currently being experienced. Your response on the importance and effectiveness should be
as follows: SD-Strongly Disagree, D-Disagree, N-Not Sure, A-Agree, and SA-Strongly Agree. Mark
the appropriate response corresponding to your answer, against IMP and EFT.
Q#
1

(In) my organization, agency, or department:


provides employees with appropriate technology tools to identify critical knowledge for business activities as required*.

has a strategic program in place to identify, collect and analyze business intelligence information to develop business strategy*.

management is committed to the identification of the right knowledge for organization business, demonstrates commitment and action in knowledge management policy,
guidelines and activities.

management constantly reviews and acts on opportunities for appropriate alliances and
joint ventures to increase the organizations intellectual capital.

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

is open to ideas and knowledge from all employees, irrespective of status.

is open to ideas and knowledge from other organizations, agencies, departments, or


disciplines.

IMP

SD

SA

EFT

SD

SA

employs some means of determining the percentage of knowledge required and


received for its business processes*.

IMP

SD

SA

EFT

SD

SA

Regularly identifies, reviews, and deletes out-of-date information and ensures updates
from designated information owners.

IMP

SD

SA

uses technological tools to create opportunities for employees to contribute knowledge in the form of tips to others*.

10

makes wide use of electronic documentation, cataloguing and archiving practices.

11

management actively promotes behaviors that enable knowledge owners to put


knowledge at the service of others*.

12

management actively promotes behaviors that enable knowledge seekers to ask their
questions to others without penalties for not knowing.

13

obtaining knowledge from fellow employees is routine and second nature.

14

sharing stories of success is encouraged.

15

is constantly assessing the extent to which employees knowledge is shared.

16

176

is constantly evaluating the possibilities to get the most knowledge out of its employees*.

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

Assessing Knowledge Management

Q#

(In) my organization, agency, or department:

17

technology is understood to be an enabler which ensures that the right knowledge


gets to the right person at the right time*.

18

electronic networks for internal and externally knowledge dissemination are


adequate*.

19

management actively promotes collaboration, teamwork and rotation of staff to


spread best practices and ideas*.

20

management actively promotes informal networks such as communities of practice.

21

employees are actively engaged in informal networks such as communities of practice.

22

sharing knowledge with fellow employees in routine and second nature.

23

is constantly reviewing the extent to which best practices disseminate.

24

constantly measures weather the people who need the knowledge get it when they need
it.

25

employs technology to track what knowledge is being used in the organization.

26

employs technology that makes the utilization of the knowledge resources transparent to all*.

27

is constantly tracking to ensure people who need knowledge get it when they need
it*.

28

intellectual assets are recognized and valued in the organization.

29

employees do not distinguish between personal and corporate knowledge when it comes
to utilizing knowledge resources for organizations business.

30

does not discourage improvisation by employees related to business objectives*.

31

has defined responsibilities and a budget set for knowledge management.

32

has key performance measures of knowledge management.

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

Bold and asterisk (*): Final items retained for the KMI model

177

Assessing Knowledge Management

aPPendix b: organizational PerforMance (oP) (P1, P2, P3 P16)


Instructions: In this section, a statement is made concerning some aspects of the performance of your
organization. Please consider your response for the period starting from when you think formal knowledge management or knowledge management-related activities were initiated in your organization.
Your response should be as follows: SD-Strongly Disagree, D-Disagree, N-Not Sure, A-Agree, and
SA-Strongly Agree.
P#

My organization, agency, or department:

produces accurate, reliable, and thorough financial reports

communicates budgetary and financial data to citizens/customers

produces financial reports in a timely manner

accurately gauges the cost of delivering programs/services/products

Conducts strategic analysis of present and future human resource needs*

is able to facilitate timely and quality hiring as required*

has sophisticated professional development programs*

has meaningful reward and evaluation structures for staff

has sufficient data to support analysis and management requirements

10

effectively monitors and evaluates projects throughout implementation

11

identifies strategic objectives, and with provide a clear purpose

12

effectively communicates strategic objectives to all employees

13

is responsive to input from customer, stakeholders, and employees

14

develops indicators and evaluative data that can measure progress toward results and
accomplishments

15

uses results data for decision-making and evaluation of progress

16

clearly communicates the results of its activities to stakeholders

Bold and asterisk (*): Final items retained for the HR-Capability component of OP.

178

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

IMP

SD

SA

EFT

SD

SA

179

Chapter 10

A Relational Based-View
of Intellectual Capital
in High-Tech Firms
G. Martn De Castro
Universidad Complutense de Madrid, Spain
P. Lpez Sez
Universidad Complutense de Madrid, Spain
J.E. Navas Lpez
Universidad Complutense de Madrid, Spain
M. Delgado-Verde
Universidad Complutense de Madrid, Spain

abStract
The Resource-Based View (RBV) has tried to test the role of strategic resources on sustained competitive
advantage and superior performance. Although this theory has found several flaws in order to reach its
objective effectively (Priem & Butler, 2001), recent proposals have suggested that these problems can
be overcome (Peteraf & Barney, 2003). This solution requires paying a greater attention to the analysis of knowledge stocks, developing a mid-range theory: the Intellectual Capital-Based View (Reed,
Lubatkin & Srinivasan, 2006). This mid-range and pracmatic theory allows the hypotheses development and empirical testing in a more effective way that the RBV. There is a certain degree of general
agreement about the presence of human capital and organizational capital as the main components of
intellectual capital, as well as about the fact that the configuration of knowledge stocks will vary from
one industry and firm to another one. Taking these assumptions as a starting point, this paper explores
the configuration of intellectual capital that can be empirically found on a sample of high-technology
firms. Our findings highlight the importance of relational capital, which must be divided into business
and alliance capital, so the strategic alliances play a relevance role in the type of firms that have been
included in our research.
DOI: 10.4018/978-1-60566-709-6.ch010

Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

A Relational Based-View of Intellectual Capital in High-Tech Firms

introduction
From the Resource-Based View (RBV), it is widely
accepted that sustained competitive advantage and
superior rents are closely tied to company ability
to utilize and deploy its intangible resources and
capabilities, or its knowledge stocks (Barney,
1991; Grant, 1996) or intellectual capital (Subramaniam & Yound, 2005).
Nevertheless, the RBV suffers from various
concerns (Priem & Butler, 2001): (i) it is not prescriptive; (ii) it is too general; (iii) and it lacks a
clear definition of its key concepts, among other.
These can be the reasons why there is so little effort
in studying a conceptual and empirical test of it.
To overcome some of these concerns, during the 90s has arisen a pragmatic and focused
framework, called Intellectual Capital-Based View
(ICV) (Reed et al., 2006). As a mid-range theory,
ICV should allow a better hypotheses development and empirical testing than a more generalize
framework as the RBV.
In this sense, there are several intellectual
capital models that have been provided in the literature (Brooking, 1996; Kaplan & Norton, 1996;
Edvinsson & Malone, 1997; Bueno, 1998; CIC,
2003; among others) to measure and conceptualize intellectual capital. However, it is necessary
to improve previous proposals and empirically
support models for the classification and measurement of intellectual capital.
At this point, most of them, use three elements
of intellectual capital: human capital, structural
capital, and relational capital (Leitner, 2005),
which are representing, in a wide sense, all expressions of firms knowledge stocks. In this way,
it is tried to reconcile the concept of intellectual
capital (CIC, 2003).
This work is based on an empirical research in
high-tech organizations since the dominant stream
of the theoretical proposals of intellectual capital
adopt the follow basic three components:

180

Human capital, which includes values and


attitudes, aptitudes, abilities, experiences
and know-how of employees to carry out
different activities into the organization.
Structural capital that contains both organizational and technological elements that
pursue integration and coordination within
the firm. In this sense, the structural capital
is the whole of organizational methods and
processes needed in order to obtain products and services as well as complete organizational tasks.
And relational capital, which gathers the
value of relationships maintained with external agents by a firm (close to business
activity or through strategic alliances).

The empirical research, focused on high-tech


firms, presents an interesting case for the study of
different kinds of intangible or knowledge assets
in knowledge-intensive firms (Leitner, 2005),
and the aim of this paper is testing the previous
models, and providing a configurative definition of
intellectual capital from the different components
that it comprises.

tHeoretical bacKground
Knowledge assets -intellectual capital- as economic wealth have been accepted along the scientific
literature as well as its useful application (Teece,
1998). Although studies about its identification,
measurement and strategic assessment are limited
because there are several problems implicated
in that. These problems are examined by the
models of intellectual capital, carrying out their
measurement and identification of the different
components that compose it. Furthermore, the
importance of managing the intellectual capital
in firms supposes a key point to perform a work
like this.
On the other hand, the definition of intellectual
capital by Bueno (1998: 221): basic competen-

A Relational Based-View of Intellectual Capital in High-Tech Firms

cies of intangible character that allow creating


and maintaining competitive advantage argues
how it can be tied the intellectual capital to the
Resource-Based View (RBV). In this way, intellectual capital is used as a synonym for intangible
or knowledge assets (Stewart, 1991).
The different components of intellectual
capital allow improving its assessment, as they
symbolize diverse kinds of intangible resources
and capabilities and it is simpler its analyses.
However, in spite of their strategic nature, all of
these assets would not have the same value for the
firm as it seems to suggest the studies of Itami &
Roehl (1987), Aaker (1989), Prahalad & Hamel
(1990), or Hall (1992, 1993) that emphasize the
importance of certain intangibles. Setting this kind
of differences can be considered as a useful help
for strategic management, since they can facilitate
to make decisions about the actions that the firm
should perform and about the implementation
of programs that allow to protect, maintain or
develop those more valuable intangible assets.
Thus, it is required an understandable classification of intellectual capital in order to explore the
relation between any specific kind of intellectual
asset and competitive advantage.
Nevertheless, there are numerous classifications about the different components of intellectual capital, as well as for establishing series
of indicators for its measurement. In this way,
according to most of the theoretical proposals, in
a first step, three main components can be found:
(i) human capital; (ii) structural capital; and (iii)
customer or relational capital (Kaplan & Norton,
1992; Saint-Onge, 1996; Edvinsson & Malone,
1997; Sveiby, 1997; Bontis, 1998; Carson et al.,
2004; Moon & Kym, 2006; Cabrita & Bontis,
2008; Kong, 2008).
However, in a second step, it can be observed
that there are various authors who take into account
a major number of components for carring out a
more detailed and deeper analysis of intellectual
capital (Brooking, 1996; Roos & Roos, 1997;
CIC, 2003; Leliaert et al., 2003; Pike et al., 2005;

Carlucci & Schiuma, 2007); trying differentiate


issues with different nature in order to improve
their examination.
In this sense, with respect to structural capital, Brooking (1996) highlights the differences
between intellectual property assets -focused on
technological knowledge- and infrastructure assets
-focus on organizational knowledge-. And regarding relational capital, Leliaert et al. (2003), distinguish between customer capital -assets related
to clients-, and strategic alliance capital -assets
with regard to relationships derived to alliance-;
and Carlucci & Schiuma (2007) discern social
capital -assets regarding networks of relationships
among agents-, and stakeholder capital -assets
related to relationships maintained with internal
and external stakeholders-.
Other models, as Intellectus Model (CIC,
2003) includes five components: (i) human capital
(makes reference to the tacit or explicit knowledge
which people possess, as well as their ability to
generate it, which is useful for the mission of an
organization and includes values and attitudes,
aptitudes and know-how); (ii) technological
capital (refers to the combination of knowledge
directly linked to the development of activities and
functions of technical system of an organization,
responsible for obtaining products and services);
(iii) organizational capital (as the combination
of explicit and implicit, formal and informal
knowledge which in an effective and efficient
way structure and develop the organizational
activity of a firm, that includes culture -implicit
and informal knowledge-, structure -explicit and
formal knowledge- and organizational learning
implicit and explicit, formal and informal renewal
knowledge processes); (iv) business capital (refers
to the value to an organization of the relationships
that maintains with the main agents connected with
its basic business processes -customers, suppliers,
allies, etc.-); (v) and social capital (as the value to
an organization of the relationships that maintains
with other social agents and its surroundings).

181

A Relational Based-View of Intellectual Capital in High-Tech Firms

As it has been presented, structural capital


was divided into technological and organizational
capital, and relational capital was divided into
business and social ones due to theirs heterogeneous nature, allowing a better understanding
of these types of factors. The Intellectus Model
(CIC, 2003) is a good example that theoretical
proposals about intellectual capital are becoming more complex and detailed every day. This
encourages analytical reflection among managers
and Chief Knowledge Officers, but it can also be
seen as a too extensive proliferation of criteria and
categories of intangible assets.
In this sense, empirical evidence is needed to
determine the level of aggregation that intellectual capital components must adopt in practice.
Thus, the aim of this work is to build blocks of
an intellectual capital balance sheet, taking the
three most common components of intellectual
capital (human capital, structural capital, and
relational capital) and testing empirically if this
grouping of intangible assets is supported by the
evidence obtained from a sample of knowledgeintensive firms.
That is, this investigation will try to reply if
there is an especific structure about intellectual
capital in high-tech firms and if some of its components stand out, exploring the configuration of
intellectual capital that can be empirically found
on a set of high-technology firms from Bostons
Route 128 (MA, USA). In addition, Route 128 is
one of the most important technological clusters,
where companies maintain relationships with
customers, suppliers and competitors, which are
interesting in order to examine relational capital.

SaMPle and MetHod


Taking into account the previously mentioned
theoretical proposal, we empirically test the
presented simple model of intellectual capital in
knowledge-intensive firms. With this purpose, we
have carried out a survey in firms operating within

182

NAICS 334 (Computer and Electronic Product


Manufacturing), 516 (Internet Publishing and
Broadcasting), 517 (Telecommunications) and 518
(Internet Service Providers, Web Search Portals,
and Data Processing Services) from Bostons
Route 128 (Massachusetts- U.S.A.) during 2005.
The selection of industries was guided by the
purpose to have a homogeneous sample (Rouse
& Daellenbach, 1999).
From a population of 422 firms, finally 52
firms took part in our survey, so we reached a
response rate of 12.32% (see Table 1 for a general
description of the fieldwork).
In our preparation of the questionnaire that we
would use to collect quantitative data from primary and internal sources especially chosen for
our research, we followed a process that can be
divided into four phases: (1) literature review; (2)
elaboration of the questionnaire in an initial version; (3) pre-testing the preliminary version of
the survey; and (4) correcting and reframing the
questionnaire in order to obtain a final version to
be used in the fieldwork.
The questionnaire employed for the survey
included 12 items for measuring different intellectual capital aspects according to the three
main constructs that it involves. 4 items were
devoted to report human capital (HC), 3 addressed
structural capital (SC), and 5 tried to analyze
relational capital (RC). Firms had to answer in a
seven positions Likert style scale, showing their
level of agreement about the sentences presented
in the survey. The 12 items employed in the
questionnaire were taken from general insights
about the pre-defined components of intellectual
capital taken into account (see Table 2). The
items were ungrouped in the questionnaire, and
one of them was reversely written (our relations
with suppliers are sporadic and punctual). These
facts granted attention and sense-making from
the respondent (CEO). Assessing the intellectual
capital in a homogeneous scale is not very easy
to do, nevertheless, the survey allows to perform

A Relational Based-View of Intellectual Capital in High-Tech Firms

Table 1. Research resume


Research focus
Criteria defining sample

Sample
Response rate

Knowledge Creation Processes


Knowledge-intensive firms
From industries NAICS 334, 516, 517 & 518
Placed on Route 128 (Massachusetts, USA)
50 employees or bigger
Included in CareerSearch Database
422 firms
52 firms (12.32%)

Method for data gathering

Survey

Process for data gathering

Ordinary mail
Follow up on the phone
Backup with second ordinary mail, FAX, webpage and e-mail

Statistical software used

SPSS 12.0 for Windows (version 12.0.1)

Table 2. Intellectual capital elements. Descriptive statistic


Mean

Standard
Deviation

HC2 - Our employees are among the most experienced in the industry

5.92

1.074

HC1 - Our employees develop new ideas and knowledge

5.81

1.049

HC4 - Our employees have a long experience in the firm

5.67

1.232

HC3 - Our employees do team work

5.67

1.098

RC5 - Our firm is recognized by the external agents (customers, suppliers, competitors, and the general
public) as one of the best firms in the industry

5.61

1.297

RC2 - Our customers are highly loyal to our firm

5.35

1.341

RC4 - Our collaboration agreements are held during long periods of time

5.19

1.394

SC1 - Our efforts in creating and sustaining an organizational culture are among the highest in our
industry

5.02

1.651

SC2 - Our firm develops more ideas and products than any other firm in our industry

4.75

1.671

SC3 - We perform a lot of actions to spread our corporate values and beliefs

3.96

1.703

RC3 - Our relations with suppliers are sporadic and punctual (R)

3.81 (R)

1.313

RC1 - Our firm devotes an important part of its budget to funding community and green actions

2.60

1.796

Questionnaire items

(R) Reversed item. Un-reversed mean would be 4.19. Standard deviation remains the same.

these comparison applying a same framework for


the assessment from each respondent.

reSultS
A factor analysis was developed in order to identify
the main dimensions (Hair et al., 2004) of intellectual capital for these types of industries as well

as their main elements and variables, although in


the following paragraphs, as a preliminary approach to the data analysis performed after data
gathering, a comment on the descriptive statistics
about the items of the questionnaire is provided.
This analysis allows us to detect the most and less
common aspects of intellectual capital that firms
possess (see Table 2).

183

A Relational Based-View of Intellectual Capital in High-Tech Firms

As it can be seen, the items related to human


capital show the higher means (close to 6 in a
scale with 7 as the maximum value). This reports
that firms operating in the chosen industries are
highly focused on having a strong human capital. And these data are quite robust, as the low
standard deviations (see Table 2). Almost every
firm strongly values its human capital. Employees with high experience in the industry, ability
to develop new ideas and knowledge, as well as
experience within the firm and the involving in
teamwork appear as key assets for competing in
the analysed industries.
The surveyed firms agree considerably (reduced standard deviations) about recognizing as
next importance in the list of intellectual strengths
and assets the renown among customers, suppliers, competitors and general public, the effective
customer loyalty, and the long-lasting collaboration agreements sealed by the firm. All of these
issues are tied to relational capital in the fashion
of reputation-based and operationally-based relationships with the environment.
The item our relations with suppliers are
sporadic and punctual (RC3) deserves special
attention, placing it as an intermediate power asset. This is consistent with the literature, which
confers less relevance to the relations with the
suppliers compared with other external agents as
customers or allies. This is backed by the obtained
results, because the items devoted to these agents
show higher values as firm strengths their relations
with the suppliers.
When firms assessed their intellectual capital
positions, the issues tied to structural capital ranked
among the less common element. Organizational
culture emerges as the most employed element of
internal coherence, but firms differ considerably
among them about this issue (see the standard
deviations, in Table 2). The effective flow of ideas
and products delivered to the market is a slightly
common asset, but we must take into account
that it has been posed in industrial-competition
terms. Finally, the relevance of actions for spread-

184

ing and reinforcing corporate values and beliefs


differ considerably for each particular firm (see
standard deviations, in Table 2).
In order to end this preliminary descriptive
analysis of our results, we must highlight that
there are very few firms in the studied industries
investing in community and green actions. Funding these actions was posed as an indicator for
relational capital focused on community, social
and green care agents. The average position in
this kind of relation is actually low.
After descriptive statistics, an exploratory factor analysis (Hair et al., 2004) was carried out in
order to identify the factors or latent phenomena
that lie in the data about intellectual capital provided by the studied firms.
For deciding if factor analysis is an appropriate technique in this case, several preliminary
tests are needed: the analysis of communalities,
the Bartletts test, and the Kaiser-Meyer-Olkin.
Table 3 shows the results of them for the set of
items contained in the questionnaire employed
in our research.
As it can be seen in Table 3, the test advise to
perform the factor analysis, the KMO index is
above 0.6, so it can be considered acceptable for
exploratory studies (as this one), and the factor
analysis becomes appropriate.
From the factor analysis we obtained four
components of intellectual capital. Jointly they
explained almost a 70% of the total variance
contained in the original data (see Table 3).
The first found component was labeled as
Human Capital because it gathered all the items
originally developed for measuring this construct,
as well as one of the elements initially designed for
relational capital. The five items included in this
component explained the 25% of the total intellectual capital of a firm. The element that better
characterizes Human Capital is the experience
in the industry held by employees. Nevertheless,
the experience in the firm also presents important
factorial weight. Besides, this component of intellectual capital includes the abilities of the employ-

A Relational Based-View of Intellectual Capital in High-Tech Firms

Table 3. Rotated components matrix (a)


Component
Human Capital
HC2

.836

HC3

.760

RC5

.739

HC1

.716

HC4

.527

Structural Capital

SC3

Alliance Capital

.448
.500
.892

RC1
SC1

Business Capital

.844
.446

.681

RC3

.821

SC2

.660

RC2

.507

RC4

.903

% variance

25.078

20.000

13.224

11.248

% acumul.

25.078

45.078

58.302

69.550

KMO index

0.618

Extraction method: Main components analysis


Rotation method: Normalization Varimax with Kaiser
(a) Rotation has converged after 5 iterations

ees for developing ideas and new knowledge, and


for team-working, as well as the recognition as a
leading firm by the external agents (see Table 3
for factorial loadings).
The second component found in the factor
analysis represents a 20% of the intellectual capital
of a firm and includes three elements. The most
important of them is the set of actions devoted
to spread corporate values and beliefs. Due to
the fact that this item was clearly representing
structural capital, and because this component
of intellectual capital includes two of the three
items originally designed for structural capital it
was named Structural Capital. The other two
items that appear within this component are the
investments on community and green initiatives,
as well as the efforts that a firm makes for creating
and sustaining its organizational culture.
The third found component of intellectual
capital weighted a 13% of the total variance con-

tained in the original data and it was shaped by


three items. The strongest of them was representing the relations with suppliers, showing content
clearly tied to relational capital. In this vein, this
component also included the relations with customers. The factorial loadings of two relational
capital items in this component, as well as the
clear dominance of one of them led us to label it
simply as Relational Capital, although it also
contained one of the items originally designed
for structural capital (see the composition of this
component through the factorial loadings shown
in Table 3).
The last component of intellectual capital
that provided the factor analysis was designated
Strategic Alliances because it contained only one
item, initially developed for measuring relational
capital along with the collaboration agreements
held by a firm. This component emerged as an
own entity, representing the 11% of the intellectual

185

A Relational Based-View of Intellectual Capital in High-Tech Firms

Figure 1. Components of intellectual capital obtained from the empirical research

capital of a firm, which highlights the relevance


that special partners can have for a firm of the
analyzed industries.

diScuSSion
According to the obtained data, the average balance sheet of intellectual capital that could be found
in a firm of the knowledge-intensive industries of
Computer and Electronic Product Manufacturing,
Internet Publishing and Broadcasting, Telecommunications, and Internet Service Providers, Web
Search Portals, and Data Processing Services operating in Bostons Route 128 at the beginnings of
2005 would show something similar to Figure 1.
In this configuration of intellectual capital,
human capital appears as the most influential
component. It includes the experience, creativity
and teamwork of employees, but when a firm
holds a strong position in these areas, an image
of leading firm is projected towards external agents
(customers, suppliers, competitors, and general
public) present in the environmental setting. Thus,
the quality of workforce seems to be the main
indicator of leadership in the industry. Probably,
due to the important knowledge-base of the studied industries, the role of key engineers or experts
could determine that the best people make the
best firm.

186

Structural capital represents almost a 30%


of the total intellectual capital of a typical firm.
The purpose of structural capital is to provide an
appropriate context for communication, cooperation, adhesion and identity (Kogut & Zander,
1996). Issues related to organizational culture,
values and beliefs are gathered within the label
of structural capital, although we have found that
investments on green care or community initiatives hold a strong relation to corporate culture
and structural capital. This is nothing strange,
because when a positive mission and values are
stated for a company, probably the best way to
legitimize them is with subsequent actions which
reinforce the declared principles. Respect for the
natural environment and the active involvement in
the community life are two of the most common
aspects that can be included in the documents
about organizational mission, vision and values,
and this explains the configuration obtained for
structural capital.
Nevertheless, one of the most appealing findings of this research has been the fact that relational capital did not appear as initially supposed.
Although according to the literature we expected
to find grouped all of relations with external agents
(customers, suppliers, allies, competitors, ), two
components of intellectual capital were found
with regard to these issues: the one that we have
named Relational Capital, which is divided into
business and alliance capital.

A Relational Based-View of Intellectual Capital in High-Tech Firms

Our block of relational capital includes the


relations with customers and suppliers, as well
as the capability of a firm to deliver ideas and
products in its industrial setting. Although this
characteristic was originally planned as an indicator of structural capital, the development process
of ideas and products appears intertwined with its
industrial environment, involving external aspects
because it has been written with a comparison to
the rest of competitors of the firm. This way, the
factor named relational capital represents the set of
general relations that a firm holds in its industrial
setting, taking into account the interconnections
with customers, suppliers and competitors. These
agents are very close to the business activities,
and it can be compared easily to the concept
of business capital that can be found in other
models (CIC, 2003).
The rising of an independent relational component of intellectual capital for allies and partners
of a firm points out that certain collaboration
agreements deserve a special interest. The presence of strategic partners could make the management and nature of this component considerably
different from the management of the rest of the
relations with environmental agents. Although
we have taken into account firms from different
industries, or even from different sectors, there
are common patterns about possible interactions
with key partners. Thus, firms born in a certain
industry can learn to operate in another one with
the help of an appropriate ally, or simply form
alliance networks (Kogut, 2000) to reinforce its
competitive position.
It is not strange to find a computer manufacturer partnering with a firm that develops and
updates contents for manuals, or distributing
its product with the web-searching software of
other firm, or providing special reduced conditions for accessing the Internet through a specific
company, which surely will need communication
equipments for undertaking its operations. These
are some examples of how strategic alliances can
strengthen the competitive position in the own

industry, thanks to the ties with firms from other


industries. This kind of alliances can be a key for
the required and success specialized management,
so that is what the results reveal when Strategic
Alliances appear as an independent component
of intellectual capital.
Further research is needed in order to improve
knowledge about any of these building blocks of
intellectual capital, bridging the extant advances
in the fields of human resource management,
organization theory and design, supply chain
management or collaborative agreements, with
the literature of intellectual capital. With empirical researches as the presented one in this chapter,
managers can discover the components of intellectual capital that can be found in their industry.
Then, they should apply the strategies and advices
already developed for other fields of management
research in order to develop and strengthen each
kind of capital. Research efforts are welcome:
a) in analyzing the configuration of intellectual
capital for different industries, building models
from empirical findings, so theoretical proposals
in the field could be supported or improved, and
b) in providing guidance for practitioners in the
complex process of reinforcing the intangible
endowments of a firm, improving each of the
different components of intellectual capital.

concluSion and
future trendS
We want to highlight the contribution of our
research towards a Relational-Based View of
Resource-Based View or Intellectual CapitalBased View. Furthermore, although several
proposals about intellectual capital classification,
identification and measurement can be found in the
literature, this work provides an evidence-driven
classification and configuration of intellectual
capital in high-tech firms.
In this sense, it is stressed the relational capital,
as it represents a 35% of the intellectual capital

187

A Relational Based-View of Intellectual Capital in High-Tech Firms

of a firm, although the traditional concept has


been divided into business and alliance capital.
So that, the human capital it is as important as
the relational capital, leaving a supporting role
for structural capital.
With respect to the presented empirical model,
the classification of different components of intellectual capital obtained in this work (see Figure
1) is very similar to the traditionally treated in
theoretical literature, where it is considered that
the intellectual capital is shaping by three components. Nevertheless, our research highlights
the alliance capital as key component due to its
relevance in the industries of our sample, leaving the intellectual capital with four components,
two of them with an internal nature and two more
devoted to relating the firm with its environment.
Therefore, regarding challenges in managing
intellectual capital, managers should pay attention to the following points: (a) recruitment and
improvement of human capital because it is the
key of its intellectual capital; (b) structure for
sustaining strategy, linking appropriately the different elements of human capital, and designing
the attractive map of relationships and alliances
needed for successfully running business; (c)
environment and several relevance agents (as
customers or suppliers) in order to develop those
relationships; and (d) key partners for reaching
an important influence on operative, service and
financial return.

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Section 3

KM Strategies in Practice

192

Chapter 11

The Effect of Organizational


Trust on the Success
of Codification and
Personalization KM Approaches
Vincent M. Ribire
Bangkok University, Thailand

abStract
Knowledge Management (KM) initiatives are expanding across all types of organizations worldwide.
However, not all of them are necessarily successful mainly due to an unfriendly organizational culture.
Organizational trust is often mentioned as a critical factor facilitating knowledge sharing. For this
research we took an empirical approach to validate this assumption. The purpose of this research is to
explore the relationships between organizational trust, a knowledge management strategy (codification
vs. personalization) and its level of success. This study was conducted among 97 US companies involved
in knowledge management. A survey tool was developed and validated to assess the level of trust, the
level of success and the dominant KM strategy deployed by an organization. Nine main research hypotheses and a conceptual model were tested. The findings show the impact of trust on the choice of the
KM strategy as well as on the level of success.

introduction
In 2001, the Journal of Management Information
Systems (JMIS) had a special issue on knowledge
management (KM). In their editorial, Davenport
and Grover (2001), mentioned that a significant
gap between KM theory and practice existed and
that research in the domain seemed fragmented.
Ten years later, we can say that the literature
DOI: 10.4018/978-1-60566-709-6.ch011

and interests on KM have continued to grow but


research remains fragmented and very few KM
theories and frameworks have been generally
developed and fully accepted. It seems like the
multidisciplinary aspect of KM slows down the
process of developing commonly accepted principles, models and theories. KM might be one of
the few fields that requires various disciplines
(Management, Information Sciences, Computer
Science, Economy, Education, Psychology) to
share and to develop common theories and it seems

Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

that such integration remain a challenge. Earl


(2001) created a taxonomy of schools of KM that
describes and summarizes in three categories the
different approaches/views of KM; Technocratic,
Economic and Behavioral.
KM has been a hot topic for more than fifteen years and organizations worldwide are still
struggling to successfully implement it and to
significantly benefit from it. Bain & Company
conducted a study in 2007 regarding the global
Management tools and trends (Rigby & Bilodeau,
2007). Knowledge Management was ranked in the
top 10 list (7th position (tie)) in term of usage.
Unfortunately it was also ranked in the bottom 5
for satisfaction in every survey for the past ten
years! This fact illustrates that organizations are
still struggling to fully take advantage of their KM
investments. The context and business strategy of
each company should be taken into consideration
while defining a KM strategy. Becerra-Fernandez
and Sabhervawal (2001) argue that a contingency
perspective should be adopted in order for each
unit to try to better understand the characteristics of
their tasks which will consequently lead to selecting the KM processes that are more appropriated
to them. This finding is aligned with the one from
Alavi, Kayworth & Leidner (2005) who suggest
that differences in culture values within firms
might influence the choice, use and effectiveness
of different KM enabling technologies. Markus
(2001) also emphasizes the need to provide different types of knowledge repositories for different
types of reusers. All these findings suggest the
need to take a more micro approach to KM and
to develop KM strategies that are more granular,
flexible and customizable enough to meet every
individual and groups needs.
This research embraces a knowledge based
view of the firm where the primary role of the
firm is the integration of knowledge to create
organizational capabilities and to gain a sustainable competitive advantage (M. Alavi & Leidner,
2001; Dinur, 2002; Grant, 1991). We went through
different waves and tools of KM but what remains

at the center of managing knowledge is people. If


people are not willing to share and acquire knowledge even the best IT tool will be inefficient. So in
order to gain a sustainable competitive advantage
the human aspect of KM and knowledge sharing
behaviors must be better understood. Various
studies and authors (Maryam Alavi, et al., 2005;
M. Alavi & Leidner, 2001; Barth, 2000; Fahey &
Prusak, 1997; Gold, Malhortra, & Segars, 2001;
William R. King, 2006; William R. King, 2007;
Knowledge Management Review, 2001; KPMG
Consulting, 2000; Microsoft, 1999; Pauleen &
Mason, 2002; Rigby & Bilodeau, 2007) report
that organizational culture remains the main barrier to successful KM implementation. Corporate
culture is a set of values, norms, symbols, guiding
principles that enable and encourage people to
involve into knowledge activities of knowledge
generation, codification, storage, sharing and
use behavior. Culture shapes assumptions about
which knowledge is important, it mediates the
relationship between organizational and individual
knowledge, it creates a context for social interaction, it shapes processes for the creation and adoption of new knowledge (William R. King, 2007).
It encourages knowledge creation by influencing
employees to getting involved in learning activities in organization, it encourages employees to
use information technology to codify and store
knowledge in knowledge management systems,
it encourages knowledge sharing by making it
the norm of acceptable behavior and it stimulates
knowledge use by influencing employees to
constantly innovate and implement knowledge
gained. Therefore corporate culture is needed to
encourage all phases of the knowledge management cycle and to focus on tacit as well as explicit
knowledge. Since tacit knowledge resides in employees, culture should support its creation and
sharing through interaction, whereas for explicit
knowledge culture should encourage employees
to codify it, to enter it into knowledge management systems, and to take part into activities for
its transfer. Positive culture can be the difference

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The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

between successful companies and those that fail.


A study shows that only 10% of companies are
successful at creating a high-performance culture
(HR Focus, 2007).
As King (2007) and Alavi, Kayworth & Leidner
(2005) highlighted, few studies have investigated
how some cultural values might be related to KM
technology and practice use and KM outcomes.
This empirical and exploratory study will contribute to fill this gap. Trust is often listed as one of
the most important cultural value that facilitates
knowledge sharing and which facilitates KM success (Maryam Alavi, et al., 2005; T. Davenport
& Prusak, 1998; De Long & Fahey, 2000; Hinds
& Pfeffer, 2003; Hubert, 2002; Kinsey Goman,
2002a, 2002b; Lee & Choi, 2003; Rao, 2002; Rolland & Chauvel, 2000; Von Krogh, 1998). Trust is
getting more and more interests in organizations
and the literature on the topic is also growing
rapidly (Kramer, 2007; Schoorman, Mayer, &
Davis, 2007). Unfortunately very few studies
have attempted to measure the effect of Trust on
KM initiatives (Renzl, 2008). This research will
focus on this particular aspect.

In order to study this research question, the


level of organizational trust is assessed through
a questionnaire distributed to knowledge workers from different organizations involved in KM.
Second, the types of KM tools and technology
implemented and used in these organizations were
evaluated. Finally, the level of success achieved
was assessed. The next sections define these
aforementioned variables.

Trust is the one essential lubricant to any and all


social activities. Allowing people to work and live
together without generating a constant, wasteful
flurry of conflict and negotiations (Cohen &
Prusak, 2001)

Trust consists of a willingness to increase your


vulnerability to another person whose behavior
you cannot control, in a situation in which your
potential benefit is much less than your potential
loss if the other person abuses your vulnerability
(Zand, 1997).

reSearcH queStion
and definition of Main
reSearcH VariableS

Belief that those on whom we depend will meet


our expectations of them (Shaw, 1997).

This study attempts to better understand how


organizational trust affects the choice and use of
KM tools and technology and the resulting success of the organizations KM initiative, or lack
thereof. Our main research question is as follows:
Does the level of organizational trust influence
the success of a KM initiative?

194

organizational trust
Considerable research has been conducted concerning the concept of trust, both interpersonal
trust and organizational trust. As with the concept
of organizational culture, organizational trust has
been defined somewhat differently in the literature
by numerous authors (Carnevale & Wechsler,
1992; Culbert & McDonough, 1986; Griffin, 1967;
Luhmann, 1979; Matthai, 1989; H. D. McKnight
& Chervany, 2000). The definitions of trust are
numerous and sometimes confusing mainly due
to each discipline viewing trust from its own perspective. Two definitions of trust were selected:

Trust is often categorized in two forms (Levin,


Cross, & Abrams, 2002a, 2002b; McAllister,
1995), cognition-based and affective-based trust.
The cognition-based dimension of trust is associated with beliefs about competence, integrity,
responsibility, credibility, reliability, and dependability. It is mainly task-oriented. The affectivebased dimension of trust is based on beliefs about
reciprocated care and concern, benevolence,

The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

altruism, commitment, and mutual respect. It is


relationship-oriented. In organizational settings,
the cognition-based form of trust is more central
since it impacts more particularly reliability and
dependability (Cook & Wall, 1980). This dimension of trust will be assessed and used for this study.
In addition to the many definitions of trust,
many tools have also been created to assess its
level in an organization. Five trust factors defined
by De Furia (1996, 1997) were determined to be
most relevant to our research: (1) sharing relevant
information; (2) reducing controls; (3) allowing
mutual influences; (4) Clarifying mutual expectations; and, (5) Meeting expectations. These factors are described in more detail in the following
section of this chapter.
Very often people think that an organizational
culture with a high level of sociability also implies
a high level of trust. This is not always true. Consider the example of a parent-child relationship:
you love your children but it does not imply that
you trust them (e.g., you will not leave them by
themselves). The opposite is also true: you might
trust someone but might not necessarily like this
person (e.g., an airplane pilot). One also needs to
remember that trustworthiness takes a long time to
build, and yet trust can be destroyed in an instant.
These different examples show the complexity
and fragility associated with trust. Trust is part of
the social capital of an organization, even though
in some particular cases its effect on knowledge
sharing might be limited (Bakker, Leenders, Gabbay, Kratzer, & Van Engelen, 2006).

Knowledge Management
Strategies and their associated
tools and technologies
Numerous publications present knowledge management practice/tool/technology frameworks.
Among them, the knowledge management spectrum, presented by Binney (2001), offers a good
overview of different KM tools and practices that
are offered to organizations to better manage their

knowledge. The tools and practices are organized


in six categories: transactional, analytical, asset
management, process, developmental, and innovation and creation. Nevertheless, most of them
are IT oriented, since IT is the main enabler for
KM. Nevertheless, other KM practices that are not
driven by IT must also be taken in consideration
in order to fully understand the KM strategy of
an organization.
Two main KM strategies or approaches
emerged: codification vs. personalization. (Hansen, Nohria, & Tierney, 1999) describe how different companies focus on different practices and
strategies in order to manage their knowledge.
Additional reasons for this particular categorization of KMS approaches are offered by Jennex
and Olfman (2003). Dennis and Vessey (Dennis
& Vessey, 2005) also used these two strategies as
the bedrock for their three knowledge management systems: knowledge hierarchies (where
knowledge is viewed as a formal organizational
resource), knowledge markets (where knowledge
is treated as an individual resource), and knowledge community (where knowledge is viewed as
a communal resource).

The Codification Approach


The first strategy identified by Hansen, et al.
(1999) is called codification, which relies heavily on IT. One of the benefits of the codification
approach is the reuse of knowledge. Knowledge
is codified and stored in databases, where it can
be accessed and used easily by anyone in the
company. Knowledge is codified using a peopleto-documents approach: it is extracted from the
person who developed it, made independent of that
person, and reused for various purposes (Hansen,
et al., 1999). It has been named and described differently by other authors: The cognitive network
model (Swan, Newell, Scarbrough, & Hislop,
1999); The collecting dimension (Denning, 1998);
The product view approach (Know-Net, 2000);
The transformation model (Natarajan & Shekhar,

195

The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

2000); Distributive applications (Zack & Michael,


1998); and, The document-centered approach and
The technological approach (Wick, 2000). After
a close analysis of these different portrayals, one
can conclude that all of these descriptions and
definitions are very similar and depict the same
type of practices and tools (Ribire, 2001).

The Personalization Approach


The personalization approach (Hansen, et al.,
1999) focuses on developing networks for linking
people so that tacit knowledge can be shared. It
invests moderately in IT. This approach focuses
on dialogue between individuals, not knowledge
in a database. Knowledge that has not been codifiedand probably couldnt beis transferred in
brainstorming sessions and one-on-one conversations (Hansen, et al., 1999). An investment
is made in building networks of people, where
knowledge is shared not only face-to-face but
also over the telephone, by email, and via videoconference. All the previously cited authors who
defined the codification approach also came up
with their own definition for this approach: The
community networking model (Swan, et al., 1999);
The connecting dimension (Denning, 1998); The
process-centered approach (Know-Net, 2000);
The independent model (Natarajan & Shekhar,
2000); The collaborative approach (Zack &
Michael, 1998); and, Socio-organizational knowledge management (Wick, 2000).

KM initiative Success
It is always difficult and open to controversy to
define and measure success. Different metrics
(qualitative and quantitative) can be used to
measure success. For example, Jennex and Olfman (2004) offer a success model based upon the
Delone and McLean (1992) IS Success Model and
discussed four different models of KM success:
(1) The Knowledge Value Chain (Bots & Bruiin,
2002); (2) the KM Success Model (2002); (3)

196

the KM Effectiveness Model (2002); and, (4) the


KMS Success Model (2003). Four main indicators defined and used by Davenport et al. in their
publication concerning successful knowledge
management projects were adopted (T. Davenport, De Long, & C., 1998):
1.

2.

3.

4.

Growth in the volume of knowledge available


since the KM initiative has been launched
(e.g., number of documents available)
Growth in the usage of knowledge available
since the KM initiative has been launched
(accesses to repositories, or the number of
participants for discussion-oriented projects)
The likelihood that the project would survive
without the support of a particular individual
or two, that is, the project is an organizational
initiative, not an individual project
Growth in the resources (e.g., people, money)
attached to KM initiatives.

Success was measured based on two dimensions. Since the main purpose of a KMS is to
facilitate the flow and dissemination of knowledge,
an important dimension for success is the fact that
different employees use the system. Success factors #1 and #2 were used to measure this dimension
of success. The second dimension of success used
is based on the robustness of the KM initiative.
If KM is given the resources and if there is a clear
commitment from senior management to make it
happen, then robustness is a success factor. Success factors #3 and #4 were used to measure this
second dimension of success.
We believed that it would also be relevant to
check if the expected benefits of the KM initiative
were achieved and, if yes, to what degree. To do
so, we used a questionnaire developed by KPMG
(2000). Fifteen main benefits often expected after
KM implementation were used (KPMG, 2000).
Additional success factors could have been
used such as the 12 KMS success factors presented
by Jennex and Olfman (2004) but it was easier
to work with a smaller number of core variables.

The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

The average of all the success factors was used


to obtain the success level score.

reSearcH HYPotHeSeS and


ProPoSed concePtual Model
research Hypothesis #1
As previously presented, organizational trust
seems to be an important cultural factor influencing
interaction and knowledge sharing between individuals. Nelson and Cooprider (Nelson & Cooprider, 1996) demonstrated a significant relationship
between mutual trust and shared knowledge between IS groups and their line customers. Politis
(Politis, 2003) also used a quantitative approach
to demonstrate the relationship between trust and
knowledge acquisition. His findings support that
most interpersonal trust dimensions are positively
related to the variable of knowledge acquisition.
Despite these two researches very few studies
have been conducted to demonstrate the direct
relationship of trust on knowledge sharing. A lot
of research focus on demonstrating the relationship between variables like; personal motivation,
social capital, communication, and knowledge
sharing particularly on topics focusing on virtual
teams and communities of practice (Teoh & Avvari,
2004). All these studies reinforce the importance
of trust in individual interactions (face to face
or assisted by technology). KM personalization
approaches are based on practices and tools that
support direct relations between individuals. If
the level of trust in between employees is high
we can expect more direct communication and
more knowledge sharing. Our first hypothesis is
based on this assumption:
H1:The level of organizational trust positively
influences the level of usage of KM personalization tools and practices.

research Hypothesis #2
What is the relationship between organizational
trust and the usage of codification tools? We are
now focusing on a human-technology relationship. The knowledge used has been codified and
is available in an information system. The question becomes, does someone who doesnt trust
his/her colleagues will still use the knowledge
they codified in the system or not? In fact this
problem has 2 facets; trust in the system and trust
in its content. We can think that if people dont
trust the system they are not going to use it, so
they will not be able to get and use the knowledge
available in it. This type of research concerns the
field of the adoption of technologies and among
the most used model we can mention the TAM
model originally developed by Davis (Davis,
1989). The trust variable was originally not part
of the TAM model but the numerous evolutions
of the model as well as its customization to ecommerce applications made the trust variable
appear as important additional component of the
model (Bahmanziari, Pearson, & Crosby, 2003;
D. H. McKnight, Choudhury, & Kacmar, 2002;
H. D. McKnight & Chervany, 2000). Bock, Sabherwal and Qian (2008) developed and tested a
model of knowledge repository success (KRS)
including perceived KRS searchability, perceived
KRS output quality, perceived usefulness and user
satisfaction. They examined how three aspects of
social context (extrinsic rewards, intrinsic rewards,
and organizational trust) affected the dimensions
of the KRS success. The model was tested on KM
systems following a codification strategy. Their
findings suggest to 1) develop organizational trust
and 2) to facilitate intrinsic rewards for knowledge
contribution partly through organizational trust.
Now if we assume that a person does trust the
system but doesnt trust people who populated its
content with knowledge artifact, what can happen?

I dont trust this person so I am not going to contact him/her directly to get their

197

The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

knowledge but I have no problem accessing knowledge they shared in the system.
The key is to acquire knowledge no matter
how it was obtained.
I dont trust this person and I will not even
trust what this person shared on the system.

These two scenarios reflect the two types of


trust previously described (cognitive and affective
(McAllister, 1995)). In the first scenario there is
no affective trust between the 2 individuals but
some cognitive trust. In the second scenario both
types of trust are lost and knowledge acquisition
will not occur.
Based on the following discussion we postulated the following hypothesis:
H2:The level of organizational trust positively
influences the level of usage of KM codification
tools and practices.
We think that the level of organizational trust
does influence the usage of KM codifications tools
but we are also conscious that other dimensions
present in the TAM model will also play a role
in this relationship. Consequently we expect the
relationship between trust and codification to be
moderate (not too strong).

research Hypothesis #3
Early in the 1990s, Jack Welsh had already underlined the important role of trust:
Trust is enormously powerful in a corporation.
People wont do their best unless they believe
theyll be treated fairly--that theres no cronyism
and everybody has a real shot. The only way I
know to create that kind of trust is by laying out
your values and then walking the talk. Youve got
to do what you say youll do, consistently and over
time (Welch, 1993).

198

The early KM efforts conducted by Buckman


laboratories have been coroneted with success
and once again trust was mentioned as a critical
component: It is important to create a climate of
continuity and trust so that we may have proactive knowledge sharing across time and space.
Organizational culture must change from a state
of hoarding knowledge to gain power to one of
sharing knowledge to gain power (as quoted in
Davenport and Prusak, 1998). When the level or
organizational trust is high people are more open
to interact, to collaborate, to innovate, to take risks,
and of course to share and acquire knowledge. This
leads us to postulate the following hypothesis:
H3:The level of organizational trust positively
influences the success level of a KM initiative.

Hypothesis #4
The personalization approach is intended to facilitate the interaction and collaboration between
individuals so they can share their tacit knowledge,
solve problems more rapidly, make better decisions
in a fastest way, grow intellectually, and be more
creative. Very few studies have been conducted to
assess the relationship between personalization approaches and the success of KM initiatives. Among
them we can mention the research conducted by
Delmonte and Aronso (Delmonte & Aronson,
2004) who demonstrated a significant relationship between social interaction and knowledge
management system success. The trust factor is
often mentioned in this study has been critical.
Another study conducted by Choi and Lee (Choi
& Lee, 2002) establishes the effect of four KM
styles and their effect on corporate performance
(based on benchmarking). Their results shows
that companies adopting a Dynamic style
(highly tacit and explicit oriented) are the most
successful. Results of companies that are mainly
system-oriented (focus on explicit knowledge)

The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

or the ones which are human-oriented obtain


similar scores (lower than the dynamic style).
Based on these findings we postulated the
following hypothesis:
H4:The level of usage of KM personalization tools
and practices positively influences the success
level of a KM initiative.

Hypothesis #5
Based on Choi and Lees study (Choi & Lee,
2002) previously described it looks like both approaches (codification ad personalization) have a
positive effect on the success of a KM initiative.
Not everyone agrees with this idea. McDermott
(McDermott, 1999) for instance clearly stated
in a provocative paper titled Why information
technology inspired but cannot deliver knowledge
management that ICT can only carry the information that will be used for individual or group
thinking which become source of knowledge. To
leverage knowledge, thinking must be leveraged
with appropriate information. For McDermott
the solution resides in Communities of Practice
(CoP) but he doesnt deny the enabling effect of
ICT in KM. We could not think about KM these
days without the use of technology but as often
mentioned its role needs to remain an enabler and
not the center of a KM strategy. Our last research
hypothesis is:
H5:The level of usage of KM codification tools
and practices positively influences the success
level of a KM initiative.

Hypothesis #6
Lee and Choi (2003) studied the relationships between knowledge management enablers, processes
and organizational performance. Their study,
conducted among 63 major Korean companies,

demonstrated significant relationships between


KM enablers Knowledge creation processes
Organizational creativity Organizational
performance. Organizational performance was
measured based on an adaptation of the balanced
scorecard, where the company compares itself to
its competitors using five factors. Wu (2008) conducted a longitudinal examination of 36 companies
which won the MAKE award (Most Admired
Knowledge Enterprises) to assess the relationship
between KM performance and firm performance
in terms of accounting and market measures. His
findings show that KM performance is a predictor
of superior bottom line performance. Anantatmula
(2007) conducted a survey to link KM effectiveness attributes to organizational performance.
All the selected key attributes (similar to ours)
confirmed to have an effect on improving organizational performance. An extensive literature
exist on this topic, Chen and Chen (2005) conducted a review of survey research in knowledge
management performance measurement between
1995-2004 and grouped them in eight categories;
qualitative analysis, quantitative analysis, financial indicator analysis, non-financial indicator
analysis, internal performance analysis, external
performance analysis, project-oriented analysis,
and organizational-oriented analysis together with
their measurement matrices for different research
and problem domains. Following this classification we could state that our organizational benefits
assessment tools fits into the internal performance
analysis category. Other KM performance classifications can be used, for example Dudezert
(2006), based on an extensive literature review,
defined two categories; macro-organizational
(composed of competitive performance of KM
and of the financial performance of KM) and a
micro-organizational approach to KM evaluation
(composed of process-based approach and of a
systemic approach to the performance of KM). In
our research we consider KM as being a process
used to identify, capture, store, share and transfer
knowledge in an organization in order to support

199

The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

its core business processes and in alignment with


its business strategy. Since KM is about improving business processes by better managing the
knowledge flows around them, its resulting impact
should be directly visible at the organizational
level. Its impact might be more or less visible
depending on the effectiveness of the KM initiative but it should be present to some extent. This
leads us to postulate the following hypothesis:
H6:The success level of a KM initiative positively
influences organizational benefits

Hypotheses #7 and #8
Keskin (2005) conducted a study among 128
Turkish SMEs and found that the codification approach had a direct impact on firm performance.
Based on his findings the impact of the codification approach was greater on performance than
the personalization one. Schulz (2001) conducted
a study among 98 subsidiaries of multinational
corporations based in the US and in Denmark
and found that companies that used a focused
approach to codification or personalization will
have positive effect on performance. Schulz
argues that a focused codification approach will
have a stronger impact on performance than a
focused personalization approach. A focused approach is defined as KM strategies that regulate
knowledge flows by controlling the degree to
which knowledge is encoded in forms that match
the information intensity and ambiguity of their
knowledge (Schulz & Jobe, 2001). Zack (1999)
also argues that the nature of the benefits gained
from managing explicit knowledge depends on
the type of application. Based on these findings
we postulated the following two hypotheses:
H7:The level of usage of KM personalization
technologies and practices positively influences
organizational benefits.

200

H8:The level of usage of KM codification technologies and practices positively influences


organizational benefits.

Hypothesis #9
Assessing the impact of trust on organizational
performance is a difficult task and very few
researches have been conducted to validate this
relationship. Among them we could mention the
work of Sako (2006) who argues that performance
factors can be classified in three categories; reducing transaction costs, investment with future
returns and continuous improvement and learning.
She used a sample of 1,415 responses from first-tier
component suppliers in the automotive industry in
Japan, the USA, and Europe and asked respondents
to evaluate how much trust they could place on
their customers. Three types of trust were used to
validate their relation with business performance;
goodwill trust, contractual trust and competence
trust. Goodwill trust was estimated to have the
stronger influence on business performance. Tam
and Lin (2009) demonstrated that the positive relation between trust in coworkers and performance
is fully mediated by trust in their organization.
De Furia (1997) argues that the benefits of high
trust include; Stimulates innovation, leads to
greater emotional stability, facilitates acceptance
and openness of expression and encourages risk
taking. Therefore, we proposed:
H9: The level of organizational trust positively
influences organizational benefits.

research Model
The five previous hypotheses served as foundation
of the following model (Figure 1).

The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

Figure 1. Research model

reSearcH MetHodologY
assessment of Variables
A survey tool (a questionnaire) was developed in
order to assess:

The level of organizational trust


The level of use of different KM tools and
technologies deployed in each organization
The perceived success of the KM initiative.
Organizational benefits

assessing organizational trust


The selected tool, the Organizational Trust Survey
(OTS), was developed and validated by De Furia
(De Furia, 1996, 1997) where trustworthiness
(TW) is based on five behaviors:
TW = SI + RC + AI + CE + ME
Sharing relevant information (SI) refers to the
behaviors whereby one individual transmits information to another person.
Reducing controls (RC) refers to the behaviors
affecting the processes, procedures or activities
with which one individual (1) establishes the per-

formance criteria or rules for others, (2) monitors


the performance of another person, (3) adjusts the
conditions under which performance is achieved,
or (4) adjusts the consequences of performance
(i.e., positive or negative reinforcements).
Allowing for mutual influences (AI) occurs when
one person makes a decision that affects both
individuals. Mutual influence means that both
individuals have approximately equal numbers
of occurrences of convincing the other or making
the decision for both individuals.
Clarifying mutual expectations (CE) refers to
those behaviors wherein one person clarifies what
is expected of both parties in the relationship. It
involves sharing information about mutual performance expectations.
Meeting expectations (ME) involves any behaviors in which one individual fulfills the behavioral
expectations of another person. It is closely related
to confidence, reliability and predictability.
The OTS allows organizations to measure the
trust-related behaviors of various categories of
people within the organization upper managers,
first line supervisors, and coworkers in relation
to how employees trust-related expectations are
being met. It also measures trust-related behaviors
between organizational units and the perceived

201

The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

impacts of organizational policies and values on


trust-related behaviors. This tool is based on 50
questions (10 questions for each of the 5 factors).
We used this tool because it measures different dimensions of trust at different levels of an
organization and also because the OTS has the
advantage to be easy to administer with a limited
number of questions and it had been previously
tested and validated.

organizational expected and achieved benefits.


Respondents were asked to assess on a five point
Likert scale to what degree they believed that the
following statements corresponded to the current
success status of their organizational KM initiative.

assessing the use of KM


tools and technologies

For this section of the questionnaire an assessment


tool was developed. The most common tools and
technologies used for knowledge management
initiatives were listed, based on a literature review.
These technologies cover the six categories of the
knowledge management spectrum, presented by
Binney (2001).
Respondents were asked to list the KM tools
and technologies used at the organizational level
(cf. Table 2). A sense of the degree of use or utilization ranging from most used to least used
was employed to enrich this insight. It might be
argued that some of the personalization tools, e.g.,
corporate yellow pages, in fact are examples of
codified knowledge, the critical delineator is how
the tools are used in practice. For example, the
crucial fact about corporate yellow pages is not
that it is a knowledge repository, but that employees use it to connect to experts. At the time of the
data collection social networking tools were not
yet popular, but future research should include
them. Their classification in the codification/
Personalization scheme might be difficult since
they fit in both categories, even though their initial
intend is to network (socialization).

KM initiatives Success and


organizational benefits
Four items were used to assess the level of KM
success and 15 items were used to assess the

202

I have noticed a significant growth in the


volume of knowledge available since the
KM initiative has been launched (number
of documents available).
I have noticed a significant growth in the
usage of knowledge available since the
KM initiative has been launched (accesses
to repositories and number of participants
for discussion-oriented projects)
I believe that the project would survive
without the support of a particular individual or two
I believe that resources (e.g., people, money) attached to KM initiatives are going to
grow

Regarding the 15 KM benefits (as shown in


Table 1) expected and achieved the respondents
were asked to assess on a five point Likert scale to
what degree they believed that the benefits were
achieved (only if expected).
As mentioned earlier in this paper four main
indicators were used to assess the level of success
as well as 15 expected benefits. Respondents were
asked to assess on a five point Likert scale to what
degree they believed that the following statements
corresponded to the current success status of their
organizational KM initiative.

I have noticed a significant growth in the


volume of knowledge available since the
KM initiative has been launched (number
of documents available).
I have noticed a significant growth in the
usage of knowledge available since the
KM initiative has been launched (accesses
to repositories and number of participants
for discussion-oriented projects)

The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

Table 1. Fifteen common KM benefits

Table 3. Results of Cronbach alpha test

Better decision making

Sharing best practice

Construct (number of items remaining)

Better customer handling

Reduced costs

Organizational Trust (24)

0.94

Faster response to key business issues

New ways of working

Codification (7)

0.801

Improved employee skills

Increased market share

Personalization (7)

0.827

Improved productivity

Create additional business


opportunities

KM Success (4)

0.708

Increased profits

Improved new product development

Increased innovation

Staff attraction / retention

Organizational benefits (15)

Increased share price

Table 2. Codification and Personalization KM


Tools and Practices
KM Tools and Technologies
Email & Listserv
Corporate Intranet Extranet Internet
Database Management Systems
Search Engines - Intelligent Agents
Data Warehouses Data Marts
Codification

Web-based training e-learning


Help-desk applications
DMS
Multimedia repositories
DSS and Expert Systems
Data mining- Knowledge Discovery
Knowledge Mapping
Expertise locators Corporate Yellow pages
Whos who
Communities of Practice (interests in the
same topic, field)
Communities of Purpose (project, task
oriented)
Groupware

Personalization

Teleconferencing (shared applications,


whiteboards)
Best practices repository
Videoconferencing (using audio and/or video)
Mentoring - Tutoring
Story Telling
Desktop computer conferencing

Not applicable

I believe that the project would survive


without the support of a particular individual or two
I believe that resources (e.g., people, money) attached to KM initiatives are going to
grow

Regarding the 15 KM benefits (Table 1)


expected and achieved, the respondents were
asked to assess on a five point Likert scale to
what degree they believed that the benefits were
achieved (only if expected).

Validity and reliability of


the Survey instrument
Due to the space limitation of this publication,
we will only provide a summarized version of the
results of the different tests that were conducted
to verify the level of validity and reliability of our
instrument (Ribire, 2005). In order to test the
internal validity of the different dimensions assessed we performed a Cronbach alpha test (Table
3). The results demonstrate an acceptable level of
internal validity. Some items were removed from
the instrument due to their low level of correlation
with the other items composing the construct.
A factor analysis was conducted to test the
validity of each construct. For the codification
and personalization constructs, some items had
to be removed due to their low loading on the
factors. For the other constructs all the items were
retained. Overall, we consider that the levels of

Online Chat & Instant Messaging

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The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

Figure 2. Path analysis diagram

validity and of reliability of the assessment tool


were acceptable.

data collection and analysis


Data were collected through two main mechanisms. An online version of the questionnaire
posted on the Web as well as a paper version were
used. Most of the responses received (98%) came
from the online version. The target population was
Chief Knowledge Officers (CKOs), managers, and
other employees involved in knowledge management initiatives at any level in an organization.
A total of 1050 emails, asking for participation,
were sent out to targeted people involved with KM
(members of KM groups and associations). A total
of 129 responses were received. This represents
a response rate of 12%. A fundamental premise
of the research was that targeted organizations
must have had experience with KM initiatives.
Of the 129 questionnaires received only 97 were
complete and were representative of organizations
involved in KM.
Organizations which participated were predominantly (68%) large organizations (>1,000

204

employees) and were in the fields of ICT-telecommunications (27%), consulting (23%) as


well as agencies of the US Federal Government
(23%). Respondents organizations were mainly
(61%) service-oriented offering both standardized
and customized products/services (64%). A large
portion of the respondents hold an executive/
managing/director position (59%).

Model Validation
A path analysis using structural equation modeling
techniques was performed to test our model. The
test was performed using the CALIS procedure
of the statistical software SAS. This procedure
uses parameter estimation based on maximum
likelihood. The path diagram is presented on Figure 2. The goodness of fit indexes are presented
on Table 4.
The value of the Chi square listed on this table
represents the null hypothesis test that the covariance matrix generated based on the data collected has the same structure as our theoretical
model, meaning that the model fits our data.

The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

Table 4. Goodness of fit indexes for final model


Goodness-of-Fit Index
Chi2
Degrees of freedom

Values

For a good model the value should be:

11.70

The smallest as possible

Prob>Chi2

0.07

As high as possible > .05

Comparative Fit Index (CFI) Bentler

0.96

Greater than 0.90

McDonalds Measure of Centrality

0.96

Greater than 0.90

Non-Normed Fit Index (NNFI) Bentler & Bonett

0.91

Greater than 0.90

Normed Fit Index (NFI) Bentler & Bonett

0.93

Greater than 0.90

Other indicators of fit are presented on the same


table. The model presented can be considered as
acceptable based on the values of the fit indexes
to obtain a good model (Hatcher, 1994).

Main findingS
Most of the coefficients on the model are highly
significant. Among the most significant coefficient
we can mention the one between the success of the
KM approach and the organizational benefits
(0.72) with a high prediction level (R2=0.69). This
finding demonstrates the positive impact that a
KM initiative can have on an organization in term
of reaching its business objectives. This finding
reinforces the fact that a KM strategy should be
closely aligned with the business strategy of an
organization to bring the most value.
The level of organization trust impacts almost
equally the use of personalization and codification approaches (H1 and H2). As explained in the
definition of the research hypotheses we originally
expected the influence of trust to be higher on
personalization than on codification but it seems
that organizational trust does impact both almost
equally. Nevertheless, the trust factor seems to
be a better predictor of personalization usage
(R2=0.23) than of codification usage (R2=0.16).
Trust then becomes a critical cultural element for
organizations who want to engage in any type of
KM initiatives. This fact is also reinforced with

the direct significant relationship between the level


of organization trust and the success level of the
KM initiative. It shows that even if technology
is not or moderately used, trust will contribute to
the success level of the KM initiative and indirectly will benefit the organization as whole. As
previously stated trust facilitates the relationships
between people, their social interaction and their
predisposition to share knowledge.
Other factors (not included in this model) will
affect the usage of KM technologies. For instance
a framework labeled Requirements of Acceptance
Model (RAM) was formulated by Ericsson and
Avdic (2003). In their model the acceptance of
knowledge management systems is a function
of perceived relevance, system accessibility and
management support. The model previously described of Bock, Sabherwal and Qian (2008) is
also source of valuable findings.
The control variable rewarding knowledge
sharing was surprisingly only significant when
applied to the personalization construct and not
on the codification construct. Most companies
currently reward people to codify their knowledge
and/or to get it from the knowledge repository.
Employees usually dont like to document things
and the quality of the resulting codified knowledge
is often low because of that. Rewarding people
to socialize and to share their knowledge through
people to people interactions (personalization)
seems to have a greater impact and might be
more fun and rewarding. Mentoring for instance

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The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

is a great way to pass tacit knowledge to junior


employees. It requires experts and/or senior
employees to dedicate a large amount of time to
explain their acts, decisions, behaviors, approaches
to junior employees on daily activities. Appropriated rewards should be given in exchange
of such service. The recent emphasis on Web 2.0
(social networking) tools seems to validate this
trend of encouraging people to connect.
The usage level of personalization tools has
a statistically significant impact (0.18) on the
organizational benefits of a company (H7). This
relationship was not significant between the usage
level of codification tools and the organizational
benefits variable (H8). Having employees to interact, collaborate and share seems to provide
more benefits to a company that people simply
using IT system to codify and acquire knowledge.
These findings are aligned with McDermotts
vision (1999) expressed in a provocative paper
titled Why information technology inspired but
cannot deliver knowledge management that ICT
can only carry the information that will be used
for individual or group thinking which become
source of knowledge. To leverage knowledge,
thinking must be leveraged with appropriate information. For McDermott the solution resides in
Communities of Practice (CoP) but he does not
deny the enabling effect of ICT in KM. We could
not think about KM these days without the use of
technology but as often mentioned its role needs
to remain an enabler and not the center of a KM
strategy. These findings are also aligned with the
study conducted by Bayyavarapu (2005) where
80 Canadian organizations were used to assess
the impact of KM strategies to firm performance.
He defined three main KM strategies; IT centered
strategy, Capture-based strategy and learning KM
strategy. Two types of performance, short term
and long term were used. Bayyavarapu argues that
IT-centered KM strategy in isolation yield neither
short term performance nor long term performance
benefits. Capture based KM strategies yield short
term performance and learning based KM strate-

206

gies yield long term performance. These three


strategies are complementary and yield better
performance benefits when used simultaneously.
To our surprise the level of organizational trust
did not have a significant impact on organizational
benefits (H9). The effect of organizational trust in
our model might be indirectly affecting organizational benefits through the different KM variables
composing our model. The concept of mediating
variable was not tested. This finding is aligned
with the research conducted by Zaheer, McEvily
and Perrone (1998) that showed that interpersonal
trust did not have a significant direct impact on
performance.
The control variable rewarding knowledge
sharing was surprisingly only significant when
applied to the personalization construct and not
on the codification construct. Most companies
currently reward people to codify their knowledge
and/or to get it from the knowledge repository.
Employees usually dont like to document things
and the quality of the resulting codified knowledge
is often low because of that. Rewarding people
to socialize and to share their knowledge through
people to people interactions (personalization)
seems to have a greater impact and might be more
fun and rewarding (Earl, 2001). Mentoring for
instance is a great way to transfer tacit knowledge
to junior employees (Swap, Leonard, Shields, &
Abrams, 2001). It requires experts and/or senior
employees to dedicate a large amount of time to
explain their acts, decisions, behaviors, approaches
to junior employees on daily activities. Appropriated rewards should be given in exchange
of such service. The recent emphasis on Web 2.0
(social networking) tools seems to validate this
trend of encouraging people to connect.
The usage level of personalization (H4) and
codification tools (H5) both have a significant
impact on the success level of a KM initiative.
The impact of the personalization tool usage factor (0.28) is slightly higher than the codification
one (0.24) but not different enough to draw any
conclusion.

The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

future trendS
It is clear that more research need to be conducted
in order to fully understand the impact of the trust
factor on the use of KM practices and tools. This
research used a quantitative approach and we
will suggest complementing it by a qualitative
approach to better understand the motivations
behind the trusting and non-trusting behaviors.
This research was only conducted with US companies and it will be valuable to test such model
in other countries to assess the impact of national
culture/traits on the willingness to trust and to
share knowledge. The new strong emphasis on
social networking tool might be a new way to start
building trust in between individuals. Research
in this new direction might although be fruitful.

concluSion
Very few quantitative studies had been conducted
to demonstrate and quantify the influence of
organizational trust on the usage level of various KM approaches as well as on the success of
a KM initiative and on the emerging benefits
for organizations. This initial study is a first attempt to do so. The theoretical model presented
has an acceptable fit with the data collected but
will greatly benefit from further validations with
larger data sets and with more diversity in term
of industries represented.
The preliminary theoretical and practical
findings of this research show that organizational
trust plays an important role in the success of KM
initiatives and in the usage level of personalization and codification technologies (which is not
always obvious for the latest). The level of KM
initiative success demonstrated to have a strong
and direct impact on organizational benefits. Organizations with a high level of trust were more
likely to be successful in their KM initiatives and
the choice of a KM dominant strategy (codification, personalization, or balanced) that leaded to

success seemed to follow a contingency approach.


In term of technology usage, it looked like simple
tools as emails, intranet applications and database
management systems remain the most used in
term of codification tools and expertise locators
and communities of practices and interests for
personalization tools. One has to be very cautious
about this last finding since, as Alavi, Kayworth
and Leidner (Maryam Alavi, et al., 2005) mentioned, one cannot expect uniformity in how
groups will use KM tools since their respective
cultural values might influence their choice and
needs. One of the practical implications of our
preliminary findings is that companies should
assess their level of trust at the organizational
level and at the unit level in order to better define
a successful KM strategy(ies) since, for instance,
the adoption of socialization tools will not be likely
to be high if the level of trust is low. This study
could not fully demonstrate the strong value that
personalization tools and practices could bring to
the success of a KM initiative and to companies
resulting benefits but we believe that their impact
might be significant if the organizational culture
embraces knowledge sharing behaviors.
Not all organizations have yet realized the
beneficial influence that trust could bring to their
environment and the impact it could have on facilitating knowledge sharing, knowledge re-use and
the creation of new knowledge. When present, trust
is part of the social capital of an organization, even
though, in some very particular circumstances,
this statement might not be validated (Bakker, et
al., 2006). A culture and/or leadership change will
often be required for organizations to increase their
level of trust. Williams (2004) provides a list of
factors on how to build or repair trust; integrity,
reliability, fairness, caring, openness, competence,
loyalty, invest in employees, promote open communication, behave in an ethical and socially
responsible manner, provide job security. Other
authors like Schoorman, Mayer and Davis (2007)
summarize these various factors in three main
dimensions; Ability, Benevolence and Integrity

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The Effect of Organizational Trust on the Success of Codification and Personalization KM Approaches

and Blomqvist, and Sthle (2000) group them


in term of ; competence, goodwill and behavior.
Finally, Galford and Drapeau (2003) provide a
good set of simple practices that can help to fight
the enemies of trust.

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Chapter 12

Advancing the Success of


Collaboration Centered
KM Strategy
Johanna Bragge
Aalto University School of Economics, Finland
Hannu Kivijrvi
Aalto University School of Economics, Finland

abStract
Knowledge is today more than ever the most critical resource of organizations. At the same time it is,
however, also the least-accessible resource that is difficult to share, imitate, buy, sell, store, or evaluate.
Organizations should thus have an explicit strategy for the management of their knowledge resources. In
this chapter we pay special attention to a KM strategy called collaboration centered strategy. This strategy
builds on the assumption that a significant part of personal knowledge can be captured and transferred,
and new knowledge created through deep collaboration between the organizations members. A critical
element in the collaboration centered KM strategy is the facilitation process that involves managing
relationships between people, tasks and technology. We describe how the Collaboration Engineering
approach with packaged facilitation techniques called ThinkLets is able to contribute to this endeavour.

introduction
Knowledge is today more than ever the most critical resource of organizations. At the same time
it is, however, also the least-accessible resource
that is difficult to share, imitate, buy, sell, store,
or evaluate. As for any other critical resource,
organizations should have an explicit strategy
for the management of knowledge resources,
too. Organizations should plan how to harness
DOI: 10.4018/978-1-60566-709-6.ch012

knowledge resources successfully in relation to


organizational goals, objectives and strategies.
What makes it challenging is that knowledge
in organizations is typically dispersed in the minds
of its members, working routines and processes,
organizational rules, etc. Part of the knowledge
is highly personal, difficult or even impossible
to transform to wider usage. Especially the content of so-called tacit knowledge that is hidden
even from its owner is difficult to harness, and
it requires special arrangements to convert or
transfer it to wider organizational usage. Smith et

Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

Advancing the Success of Collaboration Centered KM Strategy

al. (2007) claim that knowledge managers have


started to recognize that they need to become more
sophisticated in their system-driven approach to
facilitating knowledge transfer, as it just doesnt
suffice to build a database with codified knowledge and wait it to be used (see discussion also
in Cross and Baird, 2000). Recently, Mki (2008)
has found that knowledge-intensive organizations
encounter problems with the management of
encoded knowledge and information. He recommends common organizational practices to support
the use and application of both encoded and tacit
knowledge in organizations.
Smith et al. (2007) divide the four main types
of tacit knowledge that organizations wish to
transfer into best practices, expertise, experience
and innovation. Regarding best practice transfer
Smith et al. (2007) claim that it is probably the
one which most lends itself to technical facilitation
and has the clearest value proposition associated
with it. Moreover, expertise takes a long time
to develop, and thus, it would be beneficial for
companies to find ways to develop it more rapidly
(Smith et al., 2007).
Besides knowledge transfer initiatives also
measures to ensure collaboration must be taken
in order for organizations to create knowledge,
to innovate (Kolfschoten, 2007) and to overcome the frequent resistance to share knowledge
(Thomas, 2006). Collaboration, defined as joint
effort toward a goal (Kolfschoten, 2007) or as
the extent to which individuals actively communicate, cooperate, and help one another in their
work by sharing knowledge and expertise with
one another (Thomas, 2006), is found to be one
of the critical factors for knowledge management
systems success besides top management leadership and compensation schemes (Thomas, 2006).
Similarly, Hansen and Nohria (2004) and Tapscott
(2006) have emphasized the necessity of fostering
collaboration for competitive advantage. Regarding collaborative knowledge work practices, Mki
(2008) has found that modern IT applications have

214

not been able to replace the quality, or the need,


of face-to-face interaction.
Face-to-face collaboration, however, gets fairly
time-consuming and challenging in process-wise
as the group size grows over 3 or 4 people. Already
early studies on organizational effectiveness have
found that group tasks typically result in process
losses (Lorge and Solomon, 1955; Steiner, 1972).
These losses may occur due to production blocking
(e.g. when waiting for ones own turn to speak),
evaluation apprehension, poor coordination or
motivational problems. In order to mitigate the
process losses - and simultaneously to stimulate
the process gains like synergy and learning - researchers in management information systems
have proposed the deployment of special type of
groupware - Group Support Systems (GSS) - in
group tasks (Huber, 1984; DeSanctis and Gallupe,
1987; Nunamaker et al. 1991). The goal of GSS
is to help organizational teams make faster, more
satisfying, and ultimately better decisions than
those made in face-to-face, manually supported
meetings (Fjermestad, 1998). The GSS installations typically consist of 10-30 networked computers in the same meeting room, having special
software that enable parallel and anonymous input,
real-time voting, group memory and automated
reporting of the meeting minutes. The meetings
are normally administered by a facilitator, following a predefined agenda that is built together with
the problem owner. Process facilitation has been
found to be among the most critical success factors
for effective and efficient collaboration (Anson
et al, 1995; Niederman et al, 1996; Ackermann
et al, 2005; Dennis and Wixom, 2001; Bragge et
al. 2007).
An extensive amount of research from both
experimental and field studies have found that the
efficiency and effectiveness of facilitated group
work may indeed be increased by GSS - savings
up to 50% in individual work hours have been
reported when compared to regular meetings
(Fjermestad and Hiltz, 1999, 2000). Despite the
significant efficiency gains accrued, the GSS have

Advancing the Success of Collaboration Centered KM Strategy

not diffused to organizations as one would have


expected (Briggs et al., 2003; Kolfschoten, 2007).
However, to tackle this dilemma, a new stream of
research called Collaboration Engineering (CE)
has recently emerged from the literature on GSS
(Briggs et al., 2003). CE researchers are developing guidelines to the design process that foster
high-quality collaboration processes. The ultimate
goal of CE is that recurring collaborative work
practices could be executed by the practitioners
by themselves without the ongoing support from
professional facilitators, which tend to be a scarce
resource in organizations (Briggs et al., 2003;
Kolfschoten et al., 2006; de Vreede et al. 2009).
In this chapter we pay special attention to a
KM strategy called collaboration centered strategy. This strategy builds on the assumption that
a significant part of the personal knowledge can
be captured and transferred and new knowledge
created through the deep collaboration between the
organizations members (and sometimes also with
its external stakeholders). A critical element in the
collaboration centered KM strategy is the facilitation process that involves managing relationships
between people, tasks and technology, as well as
structuring tasks and contributing to the effective
accomplishment of the meetings outcome (den
Hengst and Adkins, 2007; Clawson et al. 2003).
We believe that the CE approach is able to provide
valuable and concrete progression for this.
The success of a collaboration centered KM
strategy is, however, not easy to assess. It is clear
that the success of a collaboration-centered KM
strategy is multidimensional and context specific.
In addition to task specific outcomes, collaboration
processes have group related as well as facilitator
related outcomes. The purpose of this chapter is
to discuss the multidimensional nature of knowledge management (Nissen and Jennex, 2007)
and the multidimensional nature of the success
of a collaboration centered KM strategy. We are
particularly interested in the facilitators roles and
responsibilities within the collaboration processes.
We formulate our research question followingly:

How to advance the success of a collaboration


centered KM strategy and, especially, what is the
role of the facilitator in it?
To answer our research question, we will
first present the conceptual background from the
literature, and then propose a framework to show
the different constituents, structures, processes
and possible outcomes of the collaboration centered KM strategy as well as the critical role of
the facilitator in the adopted KM strategy. The
framework serves as a basis in evaluating and
measuring the success of the collaboration centered KM strategy. We discuss the potentials of
the collaboration centered KM strategy in lines
with the proposed framework.

concePtual bacKgroundS
Knowledge types
Knowledge is today more than ever the most
critical resource of organizations and the impelling force of individuals. Knowledge requires
human judgement, is closely related to action,
and presupposes values and beliefs. Polanyi
(1962) tied personal dimension to all knowledge
and his master-dichotomy between tacit and
explicit knowledge has shaped practically all
epistemological discussion, especially since the
rediscovery and popularization made by Nonaka
and Takeuchi (1995).
Knowledge is traditionally interpreted as a
singular, independent object. Another, procedural
interpretation of knowledge is to see it as a path,
consisting of related steps (Carlile and Rebentisch,
2003). A wider interpretation is even to see the
knowledge as a network or a system where every
element is interrelated directly or indirectly with
each other.
Tsoukas and Vladimirou (2001, p. 979) define
knowledge by means of the persons ability to draw
distinctions: Knowledge is the individual ability
to draw distinctions within a collective domain

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Advancing the Success of Collaboration Centered KM Strategy

of action, based on an appreciation of context or


theory, or both. According to this definition, a
person is more knowledgeable if she/he can draw
finer distinctions. The value of those distinctions
is evaluated when used in judgements once actions
are taken. Making distinctions, judgements, classifications, structurings, and getting chaos under
control are capabilities of an expert having knowledge. Kivijrvi (2008) has elaborated the above
characterization of knowledge further and defines
knowledge as individual or organizational ability
to make decisions. All actions are consequences of
decisions. When defining knowledge we should
note that decisions are more than distinctions;
they are value-driven in the sense that they aim
to achieve a specific goal or a set of goals.
Oftentimes, knowledge is defined also as
justified true belief. It is clear that knowledge
is fuzzy and closely linked to persons who hold
it. It rarely remains fixed but its categories and
meanings transform frequently. Therefore, knowledge is dynamic and context specific. Without
a context, it is just information. One potential
context of knowledge creation and use is the
organizational context.
Organizations have a common capability to
act, i.e. knowledge capacity or intellectual capital
(Stewart, 1999), the lack of which would inevitably
prevent organizational action and would lead to
an unpredictable disorder and confusion. Organizational knowledge is processed information
embedded in routines and processes that enable
action. It is also knowledge captured by the organizations systems, processes, products, rules,
and culture (Myers 1996). According to Tsoukas
and Vladimirou (2001) organizational knowledge
is the set of collective understanding embedded
in a firm (p. 981). It is the capability that the
members of an organization have developed to
draw distinctions in the process of carrying out
their work, in particular concrete contexts, by
enacting sets of generalizations (propositional
statements) whose application depends on historically evolved collective understandings and

216

experiences (Tsoukas & Vladimirou, 2001, p.


983). In the organizational context, personal (individual) knowledge and organizational knowledge
are created, manipulated, transformed and used in
decision making. Personal knowledge is used for
personal decision making whereas organizational
knowledge is utilized in organization wide decision making. Personal knowledge is always tied
to personal action and personal valuation, while
organizational knowledge is tied to organizational
valuation.
In addition to the division between explicit
and tacit, and on the other hand between the
personal and organizational knowledge, there
are several other types of knowledge, some of
which are conscious, others preconscious. Choo
(1998) goes on to classify knowledge into three
groups: tacit knowledge, explicit knowledge, and
cultural knowledge. Scharmer (2001) divides
tacit knowledge into tacit embodied knowledge
and self-transcending knowledge. Holsapple and
Whinston (1996) define three primary types of
knowledge: descriptive, procedural, and reasoning knowledge, and three secondary types of
knowledge: presentation, linguistic, and assimilative knowledge. Savage (1996) differentiates
five types of knowledge: know-how, know-who,
know-what, know-why, and know-when, and
Liebman (1998) classifies knowledge into procedural knowledge, declarative knowledge, and
conditional knowledge. In organizational contexts,
knowledge resources include all these types, and
the challenge of knowledge management is to
advance the exploitation of multidimensional
knowledge resources to the success of the whole
organization, as well as to individual satisfaction.

Knowledge Management Strategies


According to the resource-based view of the firm
(Barney 1986, Penrose 1959, Wernerfelt, 1984)
firms should position themselves strategically
based on their rare, valuable, nonsubstitutable,
and imperfectly imitable resources and capabilities

Advancing the Success of Collaboration Centered KM Strategy

instead of the products and services. It is assumed


that the collection of resources including tangible
and intangibles assets, knowledge and skills are
the primary predictors also of the market-based
and financial-based performance. According to
this approach the competitive advantage of a firm
is eventually based on resource heterogeneity and
resource immobility. In the markets, there are not
similar organizations with similar resource-bases
and competitors find it impossible or difficult to
imitate or substitute these resources.
As for any other critical resource, organizations
should have an explicit strategy for the management of knowledge resources, too. Knowledge
management strategy is a type of resource-based
strategy, and it is the way or a scheme to do epistemic work in organizational context, that is, to
create, convert, share, storage, secure, use, and
evaluate knowledge resources in organizational
context. Because knowledge resources are at least
partly tacit and contextual, i.e. organization specific, it cannot be directly explicated, purchased
from markets, and moved from an organization to
another. Knowledge strategy is based on experience, continuous learning and routines. In order
to create similar knowledge, competitors have
to engage similar experiences, create similar
routines, etc. It is a process that takes time, and
thus, the business strategies of an organization
based on its unique intellectual resources are more
competitive and sustainable.
When proposing the construct business strategic orientation, Venkatraman (1989) applies the
distinction between intended and realized strategies. Strategic intent is associated with a priori
strategic choices, whereas the realized strategy
is defined as a consistent pattern of behavior in
the organization (Mintzberg 1978, Mintzberg and
Waters 1985). As strategic intent can be regarded
as a thought test that results in a realized strategy
if the intent is carried through, the strategic intent
may be changed easily. We should note that most of
the realized strategies emerge without preconception. Knowledge strategy can also be an intended

or realized one, and it can even emerge without


foregoing formal planning.
Part of organizational knowledge can be effectively codified. Codification is an IT-centric
strategy to manage knowledge, and to transform
it over an organization. It is an opposite strategy
to the personalization strategy (Hansen et al.
1999). By the codification strategy, knowledge is
extracted from the person who developed it, made
independent of that person and reused for various
purposes (Hansen et al. 1999). This strategy is
based on reuse-economics, investments in IT, and
the transformation of knowledge from people to
documents and computers. On some occasions,
the difference between codified and computerized
knowledge and information might be marginal.
In addition to codification and personalization, knowledge (management) strategy can be
defined through

external or internal learning,


radical or incremental learning,
learning speed,
and the breadth of knowledge base (Bierly
and Chakrabarti, 1996).

Knowledge strategy can also be based on


exploration or exploitation of external or internal
knowledge sources (Zack 1999). For choosing an
appropriate knowledge strategy, Zack suggests
SWOT analysis to evaluate the potentials of the
strategy alternatives.

Models for evaluating the Success


of Knowledge Management
Knowledge management (KM) is that part of the
organizational administration that focuses on the
management of the knowledge resources and information capital surrounded by an organization. According to an industry survey (KPMG 2002/2003)
companies use knowledge management to realise
synergies among units (83%), accelerate innovation (63%), achieve higher customer added value

217

Advancing the Success of Collaboration Centered KM Strategy

(74%), reduce costs (67%), improve quality (70%)


and reduce exposure to risks (26%). In a wealthy
organization, knowledge management exceeds
all organizational layers as well as all functional
borders. In addition to an operative, every-day tool
it is also a strategic weapon in the road to achieve
competitive advantages. In general, knowledge
management is a broad concept including e.g.
technological, organizational, behavioral, and
managerial issues.
Based on two exploratory surveys generated
from the literature Jennex et al. (2007, 2008)
define KM success as follows:
KM success is a multidimensional concept. It is
defined by capturing the right knowledge, getting
the right knowledge to the right user, and using
this knowledge to improve organizational and/or
individual performance. KM success is measured
by means of the dimensions: impact on business
processes, impact on strategy, leadership, and
knowledge content.
Some of the KM evaluation models origin
clearly from the KM domain, whereas others are
borrowed from neighbor disciplines like management information systems. The IS success model
as suggested by DeLone and McLean (1992) has
achieved a permanent status and a kind of reference
point in later success studies. In the original model,
system quality and information quality have an
effect on user satisfaction and IS use, which in
turn impact the organization through individual
impacts. This model has been later validated, applied, criticized, updated, and extended to various
dimensions in a number of studies (Seddon 1997,
Wu and Wang, 2006, Briggs et al, 2002, Jennex
and Olfman, 2006). Seddon (1997), for example,
reordered the constructs and placed the use of a
system after perceived usefulness and user satisfaction. DeLone and McLean (2003) updated their
model by adding service quality and intentions
to use and incorporating individual impact and

218

organizational impact into net benefits. They


also added feedback relations to the model.
Jennex and Olfman (2006) have applied the
principles of the model to evaluate the success
of KM and knowledge management systems
(KMS). When the model was exported from the
IS to the KM domain, notable redefinitions of the
constructs had to be made. Also Wu and Wang
(2006) respecified the DeLone and McLean model
in order to measure KMS success. In the empirical
analyses they found considerable support for the
model. Khalifa et al. (2008) argue that the usage
of KMS does not necessarily lead to organizational
performance improvement but is mediated by
knowledge-intensive capabilities such as agility
and innovativeness. Kulkarni et al. (2006) depart
from the DeLone and McLean model by looking
at KMS implementationrelated issues like the
development of organizational arrangements,
policies, processes, and incentives. Their study
is also a more generalized, broader effort across
different organizations instead of studying a single
system in a particular organization. Common to
the above studies is to utilize user satisfaction
as an intermediary variable between dependent
and independent variables. On the other hand, Lai
et al. (2008) define user satisfaction as a major
indicator of KMS success.
The task-technology fit model presented by
Goodhue and Thompson (1995) extends the
DeLone and McLean model by highlighting the
importance of task-technology fit in explaining
how technology leads to performance impacts.
This model argues that the use of a technology
may result in different outcomes, depending upon
the match between technology features and the
requirements of the task. Technology includes a
wide range of IT, such as hardware, software, data,
user support, etc. Tasks are broadly defined as the
actions carried out in turning inputs to outputs
in order to satisfy information needs. The model
proposes that information systems have a positive impact on performance only when there is
correspondence between their functionality and

Advancing the Success of Collaboration Centered KM Strategy

the task requirements of users (Goodhue and


Thompson, 1995, p. 214). The original Goodhue
and Thompson model has been applied to evaluate the success, effectiveness, or performance of
knowledge management systems (Lin and Huang,
2008), group support systems (Zigurs and Buckland, 1998, Zigurs et al. 1999, Murthy and Kerr
2000), the systems perceived ease of use, etc.
A number of evaluation models are defined
inside the KM domain trusting relatively closely
on KM concepts and theories. Muhammed et al.
(2008) focus on KM success at individual level.
They build on conceptual, contextual, and operational knowledge. The success of KM is finally
measured by two constructs; the extent to which
individuals generate and apply new innovations
in their work, and how well the individuals work
is done. Lindsey (2002) defines KM effectiveness
by means of knowledge infrastructure capability and knowledge process capability. In his
model knowledge infrastructure capability
refers to social capital (the relationships between
knowledge sources and users) and knowledge
process capability to the integration of the KM
processes into the organization. Lindseys (2002)
success model is also process-oriented because it
defines KM processes by four phases: acquisition
(capturing of knowledge), conversion (making
captured knowledge available), application (degree to which knowledge is useful), and protection
(security of the knowledge). Lin (2007) uses the
same process model to study whether KM processes are changed over time in order to improve
KM effectiveness.

Knowledge Sharing
and collaboration
Knowledge grows from sharing (Sveiby, 1997).
Knowledge sharing is a process through which
knowledge is exchanged among individuals, inside
or between groups or organizations. Knowledge
transformation between individuals is an activity
where knowledge is not divided but multiplied.

However, knowledge sharing is a problematic


concept to some extent. First, although knowledge
sharing is a prerequisite for knowledge growth,
sharing knowledge is no different from other businesses valuable knowledge is not shared without compensation. Knowledge is a competitive
resource not only on the organizational level but
also on the individual level. People do not share
knowledge without a strong personal motivation,
and they would certainly not give it away without
concern for what they may gain or lose by doing
so. (Stenmark, 2001, p. 21). Thus, knowledge
is power. Secondly, a significant part of knowledge is tacit, hidden even from the holder of the
knowledge, and it is difficult if not impossible to
convert it to an explicit form. Actually, knowledge
conversion may be regarded as a process where one
form of knowledge is generated in the context of
acting with the aid of another type of knowledge
(Cook and Brown, 1999, p. 385). Specifically, the
tacit dimension of personal knowledge manifests
itself only in the knowing process. Collaboration
between individuals can be such a process where
two or more people work together toward a common goal by sharing knowledge, bargaining and
searching compensations.
Knowledge sharing and collaboration should
be fostered by organizations as knowledge created within the firm is especially valuable because
it tends to be unique, specific and tacitly held,
being therefore more difficult for competitors
to imitate, and making it strategically valuable
Zack (1999, p. 138-9). Oftentimes the internal
knowledge creation should be combined with
external information/knowledge (Fedorowicz et
al, 2008), which is found from literary sources
or is communicated through the organizations
stakeholders, e.g. network partners or customers.
For knowledge oriented organizational settings,
Kolfschoten (2007) defines collaboration as joint
effort toward a goal. When defined this way,
goal achievement, logically, is a success factor
of collaboration. Furthermore, collaboration itself
is not a goal; it is a process, instrumental to a

219

Advancing the Success of Collaboration Centered KM Strategy

goal (ibid.). Viewing collaboration as a process,


it renders itself to managerial actions, and thus,
it can be managed.
It is clear that there exists a continuum of
possible collaboration processes, from ad-hoc
traditional meetings with 2-3 people without a
preplanned agenda to large-scale meetings that
have been preplanned for weeks and are supported
with advanced technology and process facilitation. When deciding how to foster collaboration,
especially for high-value tasks, organizations
need think a range of issues, and weigh the pros
and cons of possible approaches, and make
tradeoffs e.g. between customized and off-theshelf solutions. Regarding process facilitation,
professional facilitators tend to be expensive and
scarce, while training internal facilitators takes
extensive amounts of time for them to become as
experienced and skilled as professionals. Also the
faithful appropriation of possible technology to
be employed, that is, using it as intended by the
systems designers (Dennis et al. 2001) is challenging for novices. The Collaboration Engineering
(CE) research has emerged to tackle all these
issues, and it can provide invaluable support for
significant collaborative tasks. We will describe
the approach in the next section.

collaboration engineering
(ce) approach
CE is an approach to designing collaborative
work practices for high-value recurring tasks,
and deploying those as process prescriptions for
practitioners to execute for themselves without
ongoing support from professional facilitators (de
Vreede and Briggs, 2005; Kolfschoten, 2007). The
CE approach makes thus a distinction between
the roles regarding the design and execution of
a collaboration process, both of which are traditionally on the responsibility of the facilitator. In
CE, the tasks are split up: the process design is
the collaboration engineers task, while the recurring process execution is left for the practitioner.

220

The collaboration engineer (CEer) begins the


task analysis by decomposing the process into several activities (generate, reduce, clarify, organize,
evaluate or build consensus) and mapping them
with facilitation techniques (Kolfschoten, 2007).
In this, the CEer uses standardized and codified
facilitation intervention components called thinkLets, which yield predictable, reusable patterns
of collaboration among people working together
toward a goal. The collaboration process designs
provide ready-to-apply CE recipes to be conducted
by practitioners, according to the ultimate aim of
the CE approach (de Vreede and Briggs, 2005;
Kolfschoten et al. 2006).
Before transferring the process description to
the practitioner, it is important to validate (and
adjust) the design, e.g. by pilot-sessions, expert
validations or simulations. Also during the transfer,
several learning efforts for the practitioner (in the
process training, in preparing to apply it, and in
first trials of the process execution) may uncover
problems that require refinements for the design.
When completing the transfer phase, full-scale
implementation - and eventually also sustained use
- in the organization may take place. This calls for
managerial activities, planning and organization.
For instance, the management should stimulate
the use of the CE process through incentives and
controls. As has been found in traditional facilitation, also here the success of the practitioner as a
facilitator is key to the successful implementation
of the process. (Kolfschoten, 2007).
To sum up, the CE approach is not purported
for ad-hoc one off processes, but for recurring,
high-value tasks. If the task does not recur, it
would not benefit the practitioners to learn how
to execute the process (Kolfschoten, 2007). However, the informative CE process designs are still
able to provide additional learning insights, and
ease the preparatory communications between all
stakeholders, although the CEer would execute
the process (see discussions in Bragge et al.
2005a; 2007).

Advancing the Success of Collaboration Centered KM Strategy

Figure 1. GSS research framework of Pinsonneault and Kramer (1989)

Models for evaluating the Success


of gSS-Mediated group Performance
In this section we review the research that has
dealt with the success evaluation of GSS-mediated
group meetings. According to Kline and McGrath
(1999), the process loss model (Lorge et al., 1958;
Steiner, 1972) is by far most popular approach in
examining traditional team performance, and it has
been adopted in most GSS studies also. The model
supposes that there is input (e.g. group member
expertise, personality attributes, experience),
which is followed by a process that includes the
interaction between the group members. This is
followed by an output, which may include e.g. the
number and quality of ideas generated. Regarding the process itself, the losses may occur, for
example, due to production blocking (waiting for
ones own turn to speak), evaluation apprehension,
poor coordination or motivational problems (see
Nunamaker et al. 1991). Besides the process loss
related variables (e.g. anonymity, which reduces
the reluctance to contribute information), different contextual variables have also been taken into
account when studying GSS group performance.
For instance, group size, participant proximity
(distributed or face-to-face) and cultural differ-

ences have been extensively studied. Pinsonneault


and Kraemer (1989) categorized the contextual
variables into five classes of personal factors,
situational factors, group structure, technological
support and task characteristics (see Figure 1).
The task-technology fit (TTF) model discussed
earlier has also been utilized extensively in GSS
research (see e.g. Zigurs and Khazanchi, 2008).
Already DeSanctis and Gallupe (1987), when
setting the foundations for the study and design
of GSS, suggested that also the task type confronting the group should be taken into account. Their
task dimensions were drawn from the well-known
task circumplex of McGrath (1984), which includes four main task types: generation (creativity, planning), choice (intellective, decisionmaking), negotiation (cognitive conflict,
mixed-motive) and execution (performance,
competitive) tasks. TTF theories are intended to
provide guidance for and understanding of how
best to match a tool with a problem, e.g. an appropriate set of collaboration technology capabilities with a particular group task and context
(Zigurs and Khazanchi, 2008). Besides the TTF
model of Zigurs and Buckland (1999), the media
richness theory (Daft and Lengel, 1986), the channel expansion theory (Carlson and Zmud, 1999),

221

Advancing the Success of Collaboration Centered KM Strategy

the adaptive structuration theory (DeSanctis and


Poole, 1994) and the fit-appropriation model
(Dennis et al, 2001) were listed by Zigurs and
Khazanchi (2008) as representative TTF theories
employed and tested in GSS studies.
Fjermestad (1998) has done an extensive
study and consolidated the work of previous GSS
frameworks. His integrated framework includes
as four major factors the contextual, intervening,
adaptation and outcome variables. At the input
side are the static contextual factors, which are all
the external or driving variables that comprise the
environment or conditions for the task. They are
divided under context, group, task and technology
categories. The interaction process is divided into
two parts. The first part, the intervening factors
(either static or dynamic) represent the emergent
structuring of the group interaction derived from
and adding to the set of conditions created from
the context of the group sessions. In the second
part the groups dynamic adaptation (or interaction process) factors are controlled by the group
on an individual or a collective basis. The changes
in these variables act to influence the intervening
variables, sometimes together with contextual
factors. The static outcomes are the results of the
interplay of the intervening factors and adaptation of the group with the contextual factors, and
they are divided under efficiency, effectiveness,
satisfaction, consensus and usability measures.
(Fjermestad, 1998).
Fjermestad (ibid, p. 104) has called his integrated factors model as a prototheory, which
predicts contingent relations of the form:

222

if the GSS technology (tools and embedded structures) is appropriate to the group,
tasks and environmental context;
and if intervening factors are appropriate
(such as adequate training);
and if the groups adaptive structuration of
the tools and procedures provided is faithful, so that the intended process gains are
achieved and process losses avoided;

then GSS will lead to certain desirable outcomes (such as better decisions).

Den Hengst et al. (2006) reviewed Pinsonneault


and Kraemers (1989), Fjermestad and Hiltzs
(1999, 2000) as well as some other constructs
that have been used to evaluate the success of
collaboration processes, and they formulated additional quality constructs for reusable collaboration processes designed using the Collaboration
Engineering (CE) approach. The additional constructs are reusability (portability, adaptability,
specification), predictability (difference in input,
difference in output, reliability, robustness) and
transferability (conceptual load, perceptual load,
access load), and they are recommended to be
regarded with the CE approach. Naturally, it is
impossible to measure everything and take every
single aspect into account. Thus, a selection of
all quality constructs must be made according to
the goal of the collaboration process and the goal
of the evaluation itself. (Den Hengst et al. 2006)
Kolfschoten (2007) continues the above research in distinguishing the quality of collaboration (appreciation of joint effort by relevant stakeholders measured by effectiveness, efficiency,
productivity, commitment and satisfaction) from
the quality of the collaboration process design.
She first presents the CE approach in lines with
the Business Process Change paradigm of Kettinger and Teng (1997), which uses a process
reengineering life cycle to describe the process
from envisioning to inauguration, to diagnosis, to
(re-) design, to (re-) construction and to evaluation.
The CE approach uses similar phases and steps
to analyze, design, deploy and evaluate the new
collaboration processes. It distinguishes, similar
to envisioning, an (1) initial state in which the
applicability and added value of the approach and
the investment is addressed. Next, (2) the design
team is established (inauguration) and the task is
analyzed. Then, (3) goal setting, task diagnosis
and design can begin. After these often iterative
steps, the design is finished, and (4) transfer,

Advancing the Success of Collaboration Centered KM Strategy

piloting and (5) implementation can start. Once


the process is implemented it can be (6) adopted
by the organization to eventually become a sustained work practice. (Kolfschoten, 2007, p. 22).
Based on the above phased model, Kolfschoten
(2007, p. 31) defines the quality of the collaboration process design generally as the degree to
which the CE design supports a practitioner to
support the group in achieving its goal. It can
be measured on five quality dimensions: efficaciousness, acceptance, reusability, predictability
and transferability (ibid, p. 43).
In the following discussion knowledge strategy is understood as a knowledge management
strategy. Next, the success of a potential knowledge strategy, collaboration centered strategy, is
discussed.

a fraMeworK for
adVancing tHe SucceSS
of tHe collaboration
centered KM StrategY
the framework
As discussed in the previous section the collaboration centered KM strategy is a process-oriented
strategy where the process proceeds from the
inaugural phase to the decision and evaluation
phases. Each of the phases can be performed
better or worse and the quality of those phases is
influenced by a number of input factors. The input
factors may be classified into four categories: task,
technology, group, and facilitator.
It is clear that the task in question has significant
effects on the collaboration process and the quality of its phases. Available data and information,
problem complexity, level of conflict and urgency
are just examples of the task related factors. Moreover, the available technology can place limits or
also give opportunities to the process flow. For
example, web-based collaborative technologies
(including both GSS and videoconferencing see-

you see-me capabilities) enable more fluently


geographically distributed meetings than local
meeting-room based technologies. Sometimes
there is no ICT technology (wanted) to be used.
In order to collaborate, a group of people is
needed. The members of the group have different
backgrounds, experiences, education, knowledge,
etc. that have influence on the collaboration process. Simply, the favorable or unfavorable attitudes
toward the cooperation with some members may
switch the whole collaboration process either to
success or disaster.
The collaboration process can employ a facilitator or not. Particularly, if the technology
plays a significant role in the process, supporting
facilitation may be needed. In the CE approach
the need for external, or professional facilitation, is minimized and the process execution
can transferred to the substanceoriented group
members. Generally, the education, previous
experience, personal characteristics, available
support materials, etc. shape the facilitators work,
and as a consequence, influences the quality of
the collaboration process.
As discussed earlier, the collaboration process
is not worth planning or evaluating in isolation.
There must be a goal toward which the process
aims. Primarily the goal and its sub-goals should
bet set up before the actual process is initiated,
but, of course, some goals can be adjusted during
the process. Anyway, the realization level of the
goals depends on the quality of the collaboration
process. It might be that the early phases of the
process determine the achievement of some subgoals, but the realization level of the other goals
is depending on the quality of the last phases.
Goals can be given to the task, technology, group
or facilitator related features. Naturally, there may
be hierarchical relations between the goals, some
of the goals can be more important than others,
some of the goals are expressed explicitly whereas
others are more or less implicit, etc.
In Figure 2 the structure of our framework
with illustrative examples is described.

223

Advancing the Success of Collaboration Centered KM Strategy

Figure 2. A framework for advancing the collaboration centered KM strategy

The framework is centered around the concept


of the collaboration process. In the figure the
process flow of a typical GSS-aided collaboration
process is illustrated (based on Turban et al. 2007).
The arrows depict alternative routes that may be
planned and taken. Often, after prioritizing the
key ideas, additional idea generation follows to
elaborate on the key ideas. Sometimes the process
may include only idea generation, although eventually the ideation results would be processed
further, but maybe by another group of people.
It should be noted that part of the input factors
are controllable while some are beyond control. We
may have influence on the task content or group
composition, but the technology, for example, can
be given for a certain collaboration situation and
time-frame, although at the strategic decisionmaking level even it can be altered.
The CE approach is worth considering especially in recurring high-value processes. CE relies
on design guidelines including reusable building
blocks called thinkLets, which are divided into six
collaboration pattern classes of generate, reduce,

224

clarify, organize, evaluate and build consensus


(Kolfschoten et al., 2006). The thinkLets (over 70
so far) have been codified by highly professional
facilitators to transfer their expertise and skills
on facilitating group processes to practitioners.
Referring to the tacit knowledge types of Smith
et al. (2006) discussed in the introduction, the CE
approach encompasses in a way all four types:
the transfer of expertise (in form of thinkLets), of
best practices (in form of collaboration processes
composed of thinkLets), of experiences (in form
of codified insights) and of innovation (creation
of new knowledge through collaboration processes). Detailed descriptions of CE field studies
can be found e.g. from den Hengst et al. (2004),
de Vreede et al. (2005) and Bragge et al. (2005a,
2005b, 2007, 2009). In addition, de Vreede et al.
(2009) give a brief review of several other CE
field studies in the areas of collaborative mission
analysis, crisis response training and operational
execution, project knowledge elicitation, usability
testing, and software requirements negotiation.

Advancing the Success of Collaboration Centered KM Strategy

Depending on the approach chosen in each


collaborative situation, the roles of the facilitator
can vary. In most straightforward cases, there is
no need for a facilitator, e.g. with meetings of
established small project teams. But when the
benefits of facilitation exceed its costs, there exists
several options: using professional (external or
internal) facilitators, or practitioners (internal or
external) as facilitators. The roles of the facilitator
are partially dependent on this choice. Traditionally, both the design and execution tasks belong
to professional facilitators, while in the CE approach the execution tasks are transferred to the
practitioner. Building on an extensive review of the
GSS facilitation literature, Kolfschoten (2007, p.
193) enumerates over 70 sub-tasks to be regarded
in the design phase, and over 80 sub-tasks for the
execution phase (some tasks are to be regarded
in both phases). These include, for example,
recognizing stages of a group process, enabling
participants to contribute freely, and managing
group creativity, anxiety and conflict.
Additionally, there are numerous resources
outside the GSS domain that offer insights for
facilitator roles. For example, Schwarz (2002)
builds his skilled facilitator approach on nine
ground rules that should be endorsed for effective
facilitation, e.g. sharing all relevant information,
and focusing on interests, not positions. Regarding
complex multi-organizational contexts, facilitators have been found to take on extended roles,
e.g. arbitrator, referee, or moderator (Ackermann
et al. 2005; Bragge et a., 2007). In those contexts,
it is very important for the facilitators to ensure
that the intervention provides the means for developing a common basis for shared understanding.
In our framework the process and outcome perspectives are integrated. Obviously, the framework
is context dependent and necessarily general. In
each collaboration situation we need to determine
its ultimate goal, and assess the process flow, the
input factors in each category as well as the subgoals and objectives given to each outcome type.
Because it is hard to nominate and measure the

final outcomes of the collaboration process we


need to use among others satisfaction measures,
as is common when evaluating the success of IS,
KMS and GSS.

Success of the collaboration


centered Knowledge Strategy
The framework discussed above implicitly includes a causal chain from input variables to
the final success of the strategy. In Figure 3 the
underlying sequence is explicated.
Figure 3 is the explication of the framework
but at the same time it is a research model. The
first main point of the model is that collaboration
is seen as a process and that the quality of the
process depends on the values of the controllable
and uncontrollable input variables. The relationships between input variables and the quality of
each collaboration phase are nominated as quality functions. On the other hand, the input variables
are classified into task, technology, group and
facilitator variables. Instead of the term variable
we could use construct to depict the multidimensional nature of the input factors. The model
also purports that in the beginning of the collaboration effort one or more goals are given,
explicitly or implicitly, to the process. Then according to this model, the success of the collaboration centered KM strategy is assessed through
the level of the realized goals. The level of realization is believed to depend on the quality of the
collaboration process, and the relationships are
named realization functions. Thus, the success
is multidimensional and the final success depends
on the relative importance of each dimension.
The proposed framework and the respective
model can be used to evaluate any collaborative
efforts or to design those efforts in advance, i.e. to
predict the outcomes of a particular collaboration
effort. The managerial implications of the model
may be evaluated in a form of a question: In what
circumstances will the collaboration centered
knowledge strategy succeed? The answer is in the

225

Advancing the Success of Collaboration Centered KM Strategy

Figure 3. Control span of the collaboration centered knowledge strategy (* includes both controllable
and uncontrollable variables)

form: Assign to the controllable variables such


values that the final success is maximized. Naturally, in order to detail the answer in a particular
situation we need to specify the quality, realization,
and success functions. We need to clarify how
the quality of different collaboration phases are
depending on the different input variables, how
the goal realizations are depending on the quality
of the phases, what goals are important, and the
how the goal realizations are profiling the final
success of the collaboration centered KM strategy.
Next, some initial measures to implement and
evaluate the framework are discussed.

PreliMinarY eValuation
of tHe fraMeworK
general evaluation
In this section we evaluate the merits and applicability of the framework based on our years
experience on collaboration centered KM, which
has also influenced the frameworks formation.
The framework and its integrated model may
be utilized either implicitly by using subjective
evaluations of the relations and implications of
the different constructs, or it can be utilized to its
full capacity. The latter necessitates gathering data
systematically from various kinds of collaboration
processes, and storing it into a database in order
to be able to detect the underlying relationships

226

between the constructs. This approach would enable the creation of one type of best practices for
the success of collaboration centered KM. Note
that the framework is not purported for simple
2-3 person collaborative situations but for more
complex cases that may include tens or even
hundreds of collaborators.
Although the framework requires historical
data or subjective evaluations regarding the future, the strengths of the framework are manifold.
Among others,

it can be employed both to evaluate the


past and to predict the future,
it covers logically the whole chain from
different input factors to the overall success of a knowledge strategy, and
it can be used both in theoretical research
as well as in practical management.

When planning for collaboration, a varying


mixture of questions needs to be considered, and
consequently, taken into account when applying
the framework. Among others:
Goals:

What is the general goal and subgoals for the collaboration? Is there
a need to define more specific objectives regarding the goals?
What is the level of conflict between
the individual and group goals?

Advancing the Success of Collaboration Centered KM Strategy

Task:

Group:

What is the type of the task?


(Generation, choice, negotiation, execution. McGrath, 1984).
Does the task recur regularly or is it
one-off?
Is the task of high-value for the
organization?

What is the composition of the group


of people (= collaborators) needed to
attain the goal? Are they all employees of the organization, or are partners, competitors, customers or endusers involved?

What is the size of the group? (small:


2-5, medium 6-9, large: 10 or more)

Are the collaborators geographically


distributed? Are they in different time
zones?

Are there notable cultural differences


between the collaborators?

Have the group members met before? (No, a few times, an established
group).

What is the initial understanding of


technology or the technology readiness (Parasuraman 2000) of the
collaborators?
Collaboration process

What is the level of collaboration


needed? (Collected work, coordinated
work or concerted work. Nunamaker
et al. 2001).

How much time there is to plan the


process?

What is the ideal mode of the collaboration (same-time same-place,


same-time different-place, different-time different-place)
Technology:

What type of information systems


support each collaboration level?
(word processors, spreadsheets,

workflow systems, GSS etc. Chen et


al., 2006)

What is the capability level of the


GSS tools needed? (Level 1 tools
for exchange of information; Level 2
tools to aid in decision-making, e.g.
in organizing, modeling, changing,
and ranking information. DeSanctis
and Gallupe, 1987)

Which collaboration capabilities are


needed and what technologies afford them? (Jointly authored pages,
streaming technologies, information
access tools, or aggregated systems.
Mittleman et al. 2008).

What collaborative information systems (CIS) to employ, if any? (E-mail,


teleconferencing, videoconferencing,
dataconferencing, web-based collaborative tools, proprietary groupware
tools, GSS. Bajwa et al. 2003). What
kind of CIS the organization already
has in use? (Decision-room, webbased GSS, videoconferencing systems etc.)
Facilitation:

Is there a need for process (or content) facilitation? (Hire, inhouse, CE


practitioner).

Does the problem owner have the


necessary individual characteristics
and skills needed to be a potential
facilitator?
Thus, these are the type of issues that should
be considered when managing collaboration
processes.

case example
In this section we demonstrate the application
of the framework by way of an example, based
on Bragge et al. (2007). In that study, an action
research intervention was conducted with a consor-

227

Advancing the Success of Collaboration Centered KM Strategy

tium of 13 Finnish universities that manages and


develops a common student information system.
The chairman of the consortiums working committee decided to resort on facilitation support
as it appeared that the consortiums old strategy
needed major revising. The amount of member
universities had grown from 5 to 13 in a short
period of time, and that had complicated largely
the consortiums decision-making processes based
on unanimity. Moreover, the European-wide Bologna process regarding university degree reform
required major actions for the near future. Thus,
the chairman asked the first author of this chapter
to design a collaboration process for the consortiums strategy renewal workshop to be held a
few months later in the premises of the chairing
university. The strategy development itself is a
difficult task, here complicated further by the
multi-organizational group composition, thus the
facilitator invited another researcher experienced
with strategic planning to join the intervention,
as well as to other researchers to assist her in the
facilitation (hereafter called the facilitator team).
At the outset, the facilitator team felt necessary
to lean on electronic support technology to ensure
efficient and effective collaboration during the
six hours that was given for the workshop. GSS
have been found to offer unique assistance in
strategic planning, which represents a complicated
and dynamic group process (Dennis et al. 1997).
Moreover, the same time same-place mode of
electronic collaboration has been found to be
better fitting than virtual meetings for strategic
decision-making tasks. Thus, we planned to utilize
the chairing universitys decision-room facilities:
a computer class with 25 networked computers
equipped with GSS clients (GroupSystems
MeetingRoom).
The main facilitator had at the time of the
workshop only limited experience on facilitating
GSS sessions, aside her normal university faculty
duties. Thus, when designing the collaboration
process she leaned on the valuable advice from
the CE thinkLets manuscript (Briggs and de

228

Vreede, 2001), after having heard the specific


sub-goals for the strategy workshop: (1) internal
environment analysis regarding the needs of the
universities with respect to the common IS, (2)
mission statement generation, (3) vision generation, as well as (4) generating strategic goals and
the means how to achieve them. The CE facilitation process model including all these phases is
provided in the appendix.
In this case, instead of transferring the process
execution to a practitioner, the CE approach was
exploited by a novice facilitator to improve her
facilitation skills regarding both in engineering
the process design, and when executing it. The
CE approach was inevitably able to provide invaluable aid for these tasks. The implementation
of the process proved that the selected thinkLets
provided the patterns of collaboration as predicted.
Moreover, the process recipe may now be easily
repeated by other facilitators or even practitioners.
The group members (16) from the consortiums
13 universities were very content with the collaboration process and the results according to
the anonymous session feedback survey, and two
post-session interviews with the chairman of the
working committee. Based on 16 answers on a
Likert scale 1-7, the objectives of the session were
regarded well achieved (mean 5.50, SD 0.73), the
results were very useful (mean 5.69, SD 0.70), and
the e-collaboration process helped the participants
to focus the discussion on essential matters (mean
5.63, SD 0.89). All of them recommended the use
of GroupSystems to others. The GSS benefits that
were highlighted were the anonymity, equality,
interactivity, efficiency, effectiveness, online
voting and documentation. The participants liked
the systematic, controlled way of collaborating,
and regarded GSS as an ideal tool for a large and
heterogeneous group. The ideas collected were
considered useful for the development of the
consortium strategy as well as for the common
information system. The quantity and the quality
of the results gained were regarded as superior to
those obtained using their conventional strategy

Advancing the Success of Collaboration Centered KM Strategy

development method. Also, huge amounts of time


(even months) were saved. Finally, the facilitator
teams situational sensitivity, flexibility as well
as expertise on GSS and the substance were appreciated. (Bragge et al. 2007)
Besides the CE approach, also the multiorganizational collaborative team (MCT)
framework of Ackermann et al. (2005) offered
the facilitator team a lot of insights for handling
the teamwork dynamics during the session. For
example, the main facilitator was once asked to
take the role of a legitimate and knowledgeable
arbitrator, that is, to give an opinion during the
discussions. Moreover, GSS was found to be an
excellent instrument for mitigating many of the
impediments for MCT co-operation summed up
by Ackermann et al. (2005). For example, the
novelty of the GSS-aided way of collaborating
alleviated the lack of a common history for the
group, and guided the participants to look at the
strategy neutrally and focusing on the future, not
on the past. The anonymity feature of GSS was
also extremely valuable. It mitigated the rise of
conflicts, complex politics, and power relations,
although there were many diverging opinions
among the participants and their organizations.
Also, the long-term effects related to the strategy
making challenges of this kind of a procedurally
just and fair process should be positive (Eden
and Ackermann 2001).
Regarding improvements suggested for the
process, one participant pointed out that the utilization of electronic communication does not eliminate the need for deep face-to-face discussions
and deliberation of the ideas. Thus, the process
should be continued with conventional meetings,
as was also agreed in the workshop conclusion.
Secondly, in all voting-based methods there is a
risk that an average option wins, and the wildest
options may be automatically discarded, although
they may sometimes turn out to be real jewels.
However, the facilitator attempted to mitigate
this problem through discussions by sorting the
results again by the standard deviation showing the

sources for largest disagreements (the Crowbar


thinkLet). Third, there were divergent opinions of
the workshop schedule. Some thought it was too
tight while some regarded it as too slow.
Our case represents knowledge sharing and
creation both at the individual and organizational
levels, but also at the inter-organizational level.
Besides the electronic idea generation and prioritization, also the opportunity to verbally discuss
matters that came up during the collaboration
process was regarded very important. The key issues that were discussed were the lack of common
terminology in the consortium and the need for
common business processes. The workshop also
proved to be extremely useful for the newcomers
in the consortium in the sense that it allowed them
to efficiently gain new knowledge regarding the
consortium and its other member universities.

concluSion
Knowledge is the capability to make decisions
and the primary resource for all organizational
transformations. Knowledge exists at various
levels, not only at the personal level but also at
group and organizational levels. Although the
means to share information, communicate and
express ourselves have been broadened considerably during the last decades, a lot of relevant
knowledge in organizations remains unmined,
unshared, and underutilized.
Knowledge strategy is a type of resource-based
strategy and it is a scheme to do epistemic work in
organizational context, that is, to create, convert,
share, storage, secure, use, and evaluate knowledge
resources in organizational context. In this chapter,
we have proposed a framework to advance the
success of collaboration centered knowledge management strategy. We have elaborated on previous
research on knowledge management, the closely
related success models, and on the theories of the
collaboration processes. Our framework helps in
understanding the variations of the collaboration

229

Advancing the Success of Collaboration Centered KM Strategy

processes, quality ingredients of the phases during


the process, and subsequent impacts of the process
quality on the goal achievements, and further, on
the final success.
Since the collaboration centered KM strategy
is a process-oriented strategy, the proposed framework needs to be process-oriented, too. In addition
to the process, the framework focuses on the four
categories of controllable (manageable) and uncontrollable inputs and the respective outcomes.
The dynamic process perspective with controllable inputs makes it possible to advance, that is,
to manage the collaboration strategy towards the
intended goals and final success.
From the research point of view the next step is
to develop and validate a measurement instrument,
collect data and search for the underlying relationships between constructs. This way it is possible
to make the most out of the framework and the
collaboration centered knowledge management
strategy at scientific as well as practical levels.

Barney, J. B. (1986). Organizational culture: Can


it be a source of sustained competitive advantage?
Academy of Management Review, 11(3), 656665.
doi:10.2307/258317

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KeY terMS and definitionS


Collaboration Engineer: Collaboration
Engineer designs and documents collaboration
processes that can be readily transferred to a
practitioner. (Kolfschoten et al. 2006)
Collaboration Engineering (CE): Collaboration Engineering is an approach that designs, models and deploys repeatable collaboration processes
for recurring collaborative tasks that are executed
by practitioners using facilitation techniques and
technology. (Kolfschoten et al. 2006)
Collaboration Process: Collaboration process
is built as a sequence of facilitation interventions
that create patterns of collaboration; predictable
group behavior with respect to a goal. (Kolfschoten
et al. 2006)
Facilitator: Facilitator both designs and conducts a dynamic process that involves managing
relationships, tasks and technology, as well as
structuring tasks and contributing to the effective accomplishment of the meetings outcome.
(Kolfschoten et al. 2006)
Group Support Systems (GSS): Group Support Systems is a suite of collaborative software
tools that can be used to focus and structure a
teams deliberation while reducing cognitive
costs of communication and information access
and minimizing distraction among teams working
collaboratively toward a goal. (Briggs et al. 2003)
Knowledge Sharing: Knowledge sharing is a
process through which knowledge is exchanged
among individuals, inside or between groups or
organizations.
Knowledge: Individual or organizational ability to make decisions.

235

Advancing the Success of Collaboration Centered KM Strategy

Tacit Knowledge: Tacit knowledge is the


hidden capability of a person and is difficult to
articulate or to transform to another person.

236

ThinkLet: ThinkLet is a named, packaged


facilitation technique that creates a predictable,
repeatable pattern of collaboration among people
working toward a goal. (Kolfschoten et al. 2006)

Advancing the Success of Collaboration Centered KM Strategy

aPPendix:
Figure 4. CE Facilitation Process Model for a multi-organizational strategy development process (modified from Bragge et al. 2007)

237

238

Chapter 13

The Relevance of
Integration for Knowledge
Management Success:
Towards Conceptual and
Empirical Evidence
Alexander Orth
Accenture, Germany
Stefan Smolnik
EBS University of Business and Law, Germany
Murray E. Jennex
San Diego State University, USA

abStract
Many organizations pursue knowledge management (KM) initiatives with different degrees of success.
One key aspect of KM often neglected in practice is following an integrated and holistic approach.
Complementary, KM researchers have increasingly focused on factors that determine KM success and
examined whether the metrics used to measure KM initiatives are reasonable. In this article, the importance of integration issues for successful KM is analyzed by means of a case study of a KM initiative at
an international consulting company. The investigations demonstrate the importance of an integrated
KM approach an integrated view of KM strategy, KM processes, KM technology, and company culture to ensure KM success.
DOI: 10.4018/978-1-60566-709-6.ch013

Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

The Relevance of Integration for Knowledge Management Success

introduction and oVerView


Subject and Purpose of the chapter
Knowledge management (KM) has progressed
from an emergent concept to an increasingly common function in business organizations over the
past 20 years. Intense competition, fickle consumers, shorter product life cycles, and globalization
are some of the driving forces that have led to
increased inspection of the usage, application,
and leveraging of knowledge in organizations.
Successful KM is expected to have a positive
influence on a companys performance and effectiveness. It consists of critical enablers, such
as employee training, teamwork, and performance
measurement. This leads to the first observation:
KM is crucial for a company to succeed. Successful
KM depends on the achievement of critical success factors that based on supporting conditions.
Although KM systems (KMS) are shown to
provide benefits to organizations, they have a
high chance of failure due to both technical and
IT-related factors, as well as KM-related cultural,
behavioral, and strategic factors similar to many
other types of information systems (IS).
Problems experienced in KM initiatives are
assumed to be the result of one or more of the
following three factors:
1.

2.

A focus on the technological dimension


of KM (i.e. KMS), together with a lack
of attention to the social dimension (e.g.,
organizational culture).
The absence of a clearly defined purpose
and value for the business. In this context,
a key requirement for realizing the business
value of KM is the institutionalization of KM
practices and systems into peoples natural
work flow.

3.

KM frameworks, concepts and systems


lacking adoption to the specific requirements of corporate contexts. Given its focus
on people and their interactions, KM is
intrinsically highly context specific. Each
organizational setting poses its own challenges for successful KM.
These aspects lead to the second observation:

An integrated and holistic KM initiative, as well


as the complete embedding of KM in organizations
will be essential for KM success.
Based on both observations, the overall goal of
this article is to analyze and investigate coherences,
connections, and interdependencies between KM
success and an integrated and holistic view of the
subject area. The corresponding research question
can be formulated as follows: To what extent do
KM success factors that are accepted in literature
support an integrative perspective and does such
a perspective account for KM success?

research approach and Structure


Qualitative case study research was employed for
this study. Section 2 introduces Riempps architecture for integrated KMS and its performance
measurement system. Section 3 is an overview
of KM and KMS success. It also discusses the
success assessment framework of Jennex and
Olfman. Section 4 compares the key performance
indicators of Riempps architecture for integrated
KMS and the critical success factors of Jennex and
Olfmans success assessment framework, using
the case study findings. Section 5 concludes the
article by outlining the findings, limitations, and
further research areas.

239

The Relevance of Integration for Knowledge Management Success

foundationS on integrated
KMS arcHitectureS

to integrate the knowledge within a system in


order to use it efficiently across the organization.

background of KMS approaches

riempps architecture
for integrated KMS

Alavi/Leidner define KM as a systemic and


organizationally specified process for acquiring,
organizing, and communicating knowledge of
employees so that other employees may make use
of it to be more effective and productive in their
work. KM systems are clarified as IT-based
systems developed to support and enhance the
organizational processes of knowledge creation,
storage/retrieval, transfer and application.
Alternatively, Jennex took a holistic view of a
KMS as a system created by combining content,
organizational processes, users and technical solutions to facilitate the capture, storage, retrieval,
transfer, and reuse of knowledge to improve organizational and individual decision-making. This
holistic view, which integrates people, process,
and technology, is a Churchman view of KM that
allows the KMS to take the form required to accomplish KM goals.
Two kinds of KMS implementations are used to
address the comparison between KM approaches:
an approach based on infrastructure or generic
systems (KM in the large) and an approach based
on processes or tasks (KM in the small). The latter
perspective mainly focuses on employeesusage of
knowledge in a task, process, or project that already
possesses a common context of understanding in
order to improve the effectiveness of that task,
process or project. On the other hand, the former
perspective assumes that users do not have a common context of understanding. It concentrates on
the construction of a KMS which supports KM
processes throughout the organization and which
captures more knowledge contexts. The integrated
KMS is designed to fit both aspects. The approach
based on processes or tasks supports specific
tasks and processes, whereas the infrastructure
or generic-system-orientated perspective helps

240

Riempps architecture for integrated KMS was


developed by combining desk research, multiple
case studies, and action research. The field research
involved a KM initiative at PricewaterhouseCoopers, as well as studies and workshops with ten
organizations in the context of the Customer
Knowledge Management competence centre at
the University of St. Gallen.
Riempps architecture for integrated KMS
consists vertically of three layers (strategy, process, and system) and horizontally of four pillars
(content, competence, collaboration, and orientation). All these elements are influenced by the
organizational culture (Figure 1).
The strategy layer is composed of the business
strategy, the KM strategy and KM goals, as well
as the measurement system. In the latter, metrics
are defined to monitor the progress of the KM
initiatives. The measurement system of the integrated KMS architecture will be discussed in more
detail in the next section.
The process layer consists of business and
support processes. KM processes constitute support processes and are subject to the KM strategy.
Employees with specific KM roles execute the
KM processes by accomplishing specific KM
activities.
The system layer describes the integrated KMS,
which is ideally accessed through a portal. The
KMS supports the KM processes and is composed
of the following four functional pillars:
1.

2.

Content relates to the management of information objects, its context, and the management of content itself.
Collaboration refers to the identification,
exchange, development, and usage of
knowledge.

The Relevance of Integration for Knowledge Management Success

Figure 1. Overview of Riempps integrated KMS architecture

3.

4.

Competence addresses all aspects of individual and collective competencies in an


organization.
Orientation is composed of all search, navigation, and administration functions required
in the areas of content, competence, and
collaboration.

The architecture for integrated KMS distinguishes between different dimensions of integration. The elements of the architecture described
above should be integrated along the four key
dimensions:
1.

2.

Integration with the culture is the central


dimension of integration. It is aligned to
norms, values, and paradigms that need to
be reflected when configuring an integrated
KMS.
Vertical integration between the three layers
firstly indicates that KM processes should be

3.

4.

in line with the KM strategy and, secondly,


that the configuration of the strategy and
process layer influences the design of the
system layer.
Horizontal integration refers to the integration between the four pillars of the architecture. It can be achieved on the system layer
as well as on the process layer level.
Integration of the KM processes and roles in
the KMS finally means that the KMS should
be designed in order to support employees in
the execution of their roles within business
and support processes as well as related KM
processes.

the Measurement System


of riempps integrated
KMS architecture
The implementation of this vision of Riempps
architecture for integrated KMS can be allego-

241

The Relevance of Integration for Knowledge Management Success

Figure 2. Detailed view on the strategy layer (modified)

rized on the basis of a basic KM process model


consisting of the following four steps:
1.

2.
3.
4.

Create knowledge transparency (about the


knowledge that already exists in an organisation, knowledge managing processes, and
respective IS).
Promote knowledge exchange.
Control knowledge development.
Ensure knowledge efficiency.

Within step 4, the target achievement of the


previous steps should be verified by taking quality
improvements as well as time and cost reductions
into consideration. In order to fulfil this requirement, the architecture provides a measurement
system on the strategy layer. The achievement of
specific KM goals can be verified by means of
key performance indicators (KPIs) and respective
index values (IVs). The KM strategy similarly
refers to the four pillars of content, collaboration,
competence and orientation, as well as to the

242

culture of the organization. The KM goals, KPIs


and IVs are subordinate to the KM strategy and
mostly only refer to single pillars or to the culture
(see Figure 2).
Riempp defines a total of 78 KPIs which, according to an integrated and holistic view, refer
to the different dimensions of integration within
the architecture (see Figure 3). This means that
Riempps KPIs verify the integrational success
or successful integration of KMS.
To conclude this section, three meaningful
examples that illustrate how well these KPIs reflect
integration and verify integration success are
briefly described:
KPI 22 (Clear competence management
goals) is an example of how a KPI verifies the
success of vertical integration with the competence
management goals formulated by the KM strategy
and the KM processes constructed accordingly.
KPI 14 (Information objects are ideally
stored in an integrated, database-based, information memory, which is applicable across all

The Relevance of Integration for Knowledge Management Success

Figure 3. Overview of Riempps 78 key success factors


Layer

System

Content

Process

Pillar

Key Performance Indicator


ID

Description

Convenient integration of information objects in task execution

Sufficient knowledge of preocess involved persons about process flows

Simple, fast, and flexible execution of content management processes exclusive of unnecessary barriers

Creation and preservation of incentives (e.g. in form of rewards)

Feedback opportunities between users and authors

Chance to extend the target group over multiple stages in order to protect confidentiality and property rights

Disassociation of active, relevant information objects from non-active, irrelevant information objects

Comfort and clarity of user interface

Agile usage of authors so that searching employees can find content easily and get motivated to become authors
themselves

10

Sufficient knowledge of users about the operation and handling of Content Management functions (e.g. by trainings)

11

Adequate selection of users in order to avoid an information overload (e.g. by taxonomy-based classification
and selection

12

Preferably rich context development (e.g by rich text formatting, grouping, linking, etc.)

13

Relevance, authenticity, timliness, and usefulness of localized information objects

14

information objects are ideally stored in an integrated, datebase-based, information memory, which is applicable
across all platforms

15

Integratibility with other applications by standardized interfaces

16

Comfortable creation and revision of information objects in the daily work environment using familiar tools
(e.g. WYSIWYG)

17

Disassociation of content, structure, presentation and application logic

18

Rendering of all possible file formats for various clients

continued on following page

platforms.) is an example for the verification of


the successful horizontal integration on the system
layer. For example, an information object can be
generated (content pillar) and used in a collaboration room (collaboration pillar) afterwards.
KPI 1 (Convenient integration of information
objects in task execution) illustrates how a KPI
verifies integration of the KM processes and roles
within the KMS.
Figure 4 gives a detailed view on the relationship of KPIs and the different integration
dimensions.

KM/KMS SucceSS and critical


SucceSS factorS
foundations
Success is basically understood as the achievement
of goals, with goals defined as prospective aspired
states. In the business management context, profit
usually constitutes the supreme goal. This single
goal does, however, not provide sufficient guidance for an organization to grow and develop. It
ultimately needs to accommodate a spectrum of
goals, including the goals of KM initiatives.

243

The Relevance of Integration for Knowledge Management Success

Figure 3. continued
Layer

System

Competence

Process

Pillar

Key Performance Indicator


ID

Description

19

Guard against fears of a glassy employee by a definite authorization system and comprehensive information

20

Sufficient knowledge of process involved persons about the process flows and the handling of competence
management functions

21

Benefit and added value is distinguishable for all involved persons (e.g. by eased contacting or improved development opportunities

22

Clear competence management goals (e.g. improvement of human resources development, creation process
flexibility, promotion of innovation)

23

Comprehensive top management support

24

Early involvement of employee representatives

25

Creation and preservation of maintenance processes (e.g. by target agreements and appraisals)

26

Securing of reliability of data information by monitoring and examination

27

Timeliness of elements contained in the competence registry

28

Easy contact opportunities between searching employees and competences

29

Comprehensive change management

30

Applicability of elements contained in the competence registry

31

Comfortable navigation, search, and analysis options as well as effective visualization

32

An active usage of the competence registry enhances the incentives for maintenance and causes more timely
and applicable entries

33

Sufficient knowledge of users about the operation and handling of competence management functions (e.g. by
trainings)

34

Back-end integration with existing human resources management systems in order to avoid inconsistencies

35

Front-end integration with systems of the daily work environment

36

Multi-level authorization system

37

Active contact between searching employees and competences

continued on following page

The achievement of objectives and the aligned


successful completion of a KM initiative result in
KM success. Jennex et al. define KM and KMS
success as a multidimensional concept. Each
includes capturing the right knowledge, getting
the right knowledge to the right user, and using
this knowledge to improve organizational and/
or individual performance. KM success is measured using the dimensions of impact on business
processes, impact on strategy, leadership, and
knowledge content.

244

This paper takes the position that KMS success has a direct effect on KM success, making
the terms interchangeable in the rest of the article.
Success factor research explicitly focuses on
analyzing factors that influence success by defining performance metrics to make the influence of
these factors measurable and comparable. The
term success factor traces back to Daniel, who
used the perception for the first time in the IS
context. It was afterwards broadened by Rockert
to business-related aspects:
Critical success factors thus are, for any business, the limited number of areas in which results,

The Relevance of Integration for Knowledge Management Success

Figure 3. continued
Layer

System

Collaboration

Process

Pillar

Key Performance Indicator


ID

Description

38

Continuous engagement of role models (e.g. moderators, team officers, sponsors, etc.)

39

Acceptance and encouragement of the top management

40

Community goals are clearly formulated and consistent with organizational goals

41

Support of influential sponsors

42

Active attendance of popular experts acting as role models and precursors

43

Optional attendance and high intrinsic motivation of employees

44

Free spaces for formation, collaboration, documentation, and reflection

45

Securing the transmission and reutilization of results

46

Continuous virtual and physical meetings

47

Convenient support of information and communication systems

48

Intuitive and comfortable handling of user interface

49

Active usage by role models and antetypes (e.g. executive managers) in order to have a multiplication effect

50

Seamless integration of community management functions into the daily work environment

51

Sufficient knowledge about the operation and handling of community management functions (e.g. by trainings)

52

Continuous engagement of role models (e.g. moderators, team officers, sponsors, etc.)

53

High network capacity

54

An integrated user interface

55

Users are as possible always online in virtual rooms

56

Automatic adaption of available functions to connected hardware and differing network capacities

continued on following page

if they are satisfactory, will ensure successful


competitive performance for the organization.
They are the few key areas where things must
go right for the business to flourish. If results in
these areas are not adequate, the organizations
efforts for the period will be less than desired.

the Jennex/olfman KM Success


assessment framework
KM/KMS success measurement is crucial from an
organizational as well as an academic perspective,
as the evaluation of KM initiatives is essential to
understand how KMS should be built and implemented. Several KM/KMS success/ effectiveness
models have been proposed in order to support

the successful execution of KM initiatives and


ensure KM/KMS success.
Jennex and Olfman developed a model assessment framework based on comparing existing
KM/KMS success models to KM/KMS success
factors. It determined the degree to which the
models have a theoretical foundation, as well as
whether the models could be applied to both approaches (the one based on process and tasks, as
well as the one based on infrastructure and generic
systems) in order to implement a KMS.
In the following two sections, the main results of Jennex and Olfmans research will be
highlighted.

245

The Relevance of Integration for Knowledge Management Success

Figure 3. continued
Layer

System

Orientation

Process

Pillar

Key Performance Indicator


ID

Description

57

Adequate compromise between simplicity and clarity of navigation and search vs. depth and breadth orientation
guides

58

Unerring illustration of the established language use including sufficient terminological accuracy

59

Consistent use of taxonomy according to classification, navigation, and creation of search indices

60

Involvement of all user groups in order to define targets

61

Glossary and taxonomy are closely restricted to central terms (in order to avoid a technological overload)

62

Convenient integration into information systems

63

Periodically passing maintenance processes for adopting the dynamical development of language use

64

Integration of standardized terminologies (e.g. for specific industries)

65

Continuous and well arranged configuration of layout and navigation

66

Speed of screen composition and performance of functions

67

Continous examination and actualization of layout and navigation

68

Convenient preparation of search results

69

Comfortable classification of information objects (as a basis for a attribute-based inducing and search)

70

Appropriate pull-personalization for all users and push-personalization options for advanced users

71

Adequate usage of search engines for dynamically generated navigation structures, topic maps, taxonomy
extracts and taxonomy maintenance

72

Automatic link control for the correction of broken links

73

Navigation and search consider multiple languages

74

Integrated search for content, competences, and collaboration rooms

75

Centralization of different search indices in order to perform comprehensive search processes

76

Search engines search in connected sources

77

Marksmanship and speed of search functions

78

Singular authentication for all integrated applications (single sign on)

KM/KMS Success factors


The current KM literature contains reams of
studies and research work that address and deal
with KM/KMS success factors. Jennex and Olfman constructed a critical success factor (CSF)
framework by reviewing the existing literature.
Several studies that focus on KM/KMS success
were found and a total of 78 KM initiatives or
organizations were investigated. They identified success factors that were mentioned in the
literature, combined them into composite CSFs.
and ranked the composite CSFs according to the
number of authors mentioning the factors.

246

The outcome was a set of 12 KM/KMS CSFs.


CSFs SF1 to SF4 are considered the key CSFs,
as they were mentioned in more than 50% of the
investigated success factor studies. Figure 5 lists
the set of CSFs in their rank order (SF1 to SF4
are highlighted by the red frame).

KM/KMS Success Models


Theoretical or process-orientated success models
classify success in a broader context in order to
also encompass causal connections, indirect impacts, and back coupling. Current KM literature
mentions several success models, for example,

The Relevance of Integration for Knowledge Management Success

Figure 4. Relationship between KPIs and the dimensions of integration

247

The Relevance of Integration for Knowledge Management Success

Figure 5. The 12 success factors of Jennex and Olfman

the KM Value Chain of Bots/De Bruijn, the KM


Success Model of Massey, Montoya-Weiss and
ODriscoll, the Lindsey KM Effectiveness Model,
the KMS Success Model of Maier, and Coopers
Evolutionary Model for KM Success.
Additionally, Jennex and Olfman themselves
present a KMS Success Model that is based on
the DeLone/McLean IS Success Model. The 12
CSFs of Jennex and Olfman can be applied to
the various success models to a greater or lesser
extent. Referring to the top four success criteria,
the KM Value Chain, Lindseys KM effectiveness
model, Maiers KMS Success Model as well as the
Evolutionary Model for KM Success of Cooper
are not as good reflecting the observed data as
the KM Success Model of Massey et al. and the
KMS success model of Jennex/Olfman. The only
difference between the model of Jennex/Olfman
and the model of Massey et al. is SF5 culture.
Because SF5 would be the next most important
success factor, the Jennex Olfman KM success
model is considered the best fit and will be used in

248

the rest of this paper. The results of the comparison


of KM/KMS success factors and KM/KMS success models are stated through Figure 6.

tHe releVance of integration


for KM/KMS SucceSS
a comparison of Success factors
and Key Performance indicators
The Jennex/Olfmann KM success model meets
the requirements of both the KM approach based
on tasks and processes and the one based on
infrastructure and generic systems, which is the
crucial and vital principle of an integrated KMS.
The success model also has a theoretical basis
the DeLone/McLean IS Success Model. Finally,
the Jennex/Olfman success model allegorizes
the KMS CSFs the best. It is suggested that one
reason for the close fit between the CSFs and
the Jennex/Olfman success model is that both

The Relevance of Integration for Knowledge Management Success

Figure 6. KM/KMS Success Models versus KM/KMS Success Factors

KM approaches are addressed. In other words,


it supports the integration of both perspectives.
This again suggests that integration aspects and
KM/KMS success are interlocked.
The extent to which the 12 CSFs and the Jennex/Olfman model account for integration aspects
will be examined by comparing the 78 KPIs of
Riempps measurement model to the 12 CSFs.
Riempp has further classified his KPIs into one
of the eight architecture interfaces (Figure 7).
Each KPI of Riempps architecture was verified as to whether it could be allocated to none,
one, or more than one of the Jennex and Olfman
CSFs. A total of 76 of 78 critical KPIs could be
assigned to one, and frequently to two or three of
the Jennex and Olfman CSFs. Figure 8 illustrates
this mapping graphically.

discussion of conceptual findings


Based on this comparison of CSFs to KPIs, the
following main findings can be derived:
1.

There are definite interdependencies between


the Riempp KPIs and the Jennex and Olfman
CSFs. A more detailed analysis of the assignment results indicates that certain measures
have to be executed in order to achieve the
12 Jennex and Olfman CSFs. These actions
are in turn reflected in the 76 Riempp KPIs.

On the one hand this means the 12 Jennex and


Olfman CSFs can be broken down into 76 smaller
KPI elements that represent the measures that have
to be introduced. On the other hand, the 76 KPIs

249

The Relevance of Integration for Knowledge Management Success

Figure 7. Classification of KPIs into the architecture for integrated KMS

Figure 8. Graphical illustration of the key performance indicator assignment

of Riempps architecture for integrated KMS can


be accounted for by the 12 CSFs.

250

In order to achieve, for instance, SF4 of Jennex/


Olfmans model (Motivation and commitment of
users, including incentives and training), several

The Relevance of Integration for Knowledge Management Success

Figure 9. Quantitative illustration of the key findings of the assignment

of Riempps KPIs need to be embraced. Incentive


systems have to be implemented (KPI 4), a simple
transfer of knowledge between competences and
searching employees needs to be ensured (KPIs
2, 5, 9, 28, 37), experts and KM roles have to
engage themselves (KPIs 42, 49, 52, 55), training
and further education need to conducted (KPIs
10, 20, 33, 51), and so forth.
Going a step further, the comparison implies
that the achievement of the 12 Jennex/Olfman
CSFs results from the achievement of the 76
Riempp KPIs. Consequently, the 76 KPIs incorporating integration success need to be attained
to achieve KMS success.
2.

An extensive amount of Riempps KPIs can


be clearly assigned to either SF1, SF2, SF3,
SF4, SF5, SF8, or SF10. The KPIs that can
be allocated to SF1 and SF10 (technical success factors) refer to horizontal integration,
while those that can be assigned to SF2, SF3

and SF8 (strategic success factors) refer to


vertical integration.
Finally, the KPIs allotted to SF4 and SF5
(cultural and personal success factors) apply
comparably to horizontal integration, integration
of KM processes and roles in the KMS, as well as
to cultural integration. The other Riempp KPIs,
those which could be assigned to SF6, SF7, SF9,
SF11, and SF12, could not be grouped as precisely.
However, all of the remaining KPIs also refer to
the different dimensions of integration.
Based on these results, it can be stated that the
12 Jennex/Olfman CSFs correspond more or less
equally to the different integration dimensions of
Riempps architecture for integrated KMS.
Figure 9 provides a more detailed view of the
assignment of the relevant success factors to the
different dimensions of integration. The first three
columns of the table refer to the 12 Jennex and
Olfman CSFs. Column 1 shows the ID of each
success factor, column 3 describes each factor

251

The Relevance of Integration for Knowledge Management Success

roughly, and column 2 illustrates how the Jennex/


Olfman CSFs were grouped based on the outcome
of the comparison (compare main finding 2).
The following columns of the table refer to
Riempps architecture of integrated KMS. Column
4 shows which Riempp KPIs were assigned to
which Jennex/Olfman CSFs and column 5 outlines
the number of assigned factors. Finally, columns
6 to 9 indicate to which specific dimension of
integration the single Jennex/Olfman CSFs and,
hence, the assigned Riempp KPIs refer. The columns 6, 7, 8, and 9 basically legitimate the grouping of CSFs in column 2.
The results of the comparison show that
achievement of the 12 Jennex/Olfman CSFs
results from an achievement of the 76 Riempp
KPIs. The logical conclusion is that organizations
need to cope with Riempps KPIs in order to attain KM/KMS success. The fact that the KPIs of
Riempps architecture for integrated KMS largely
indicates integration success leads to the following basic assumption: Integrated KM determines
KM/KMS success.

observations from an international


consulting company case
This case study was conducted in the context of
a merger between two international consulting
firms. A KM initiative was launched within the
scope of the post-merger integration activities at
the acquired company. The primary focus of the
initiative was the introduction and announcement
of new KMS functionalities and tools, as well as
the integration and adjustment of existing KM
structures.
The measurement and evaluation of the success of the initiatives are ideally suited to verify
the assumption that integrated KM determines
KM/KMS success. The verification process consists of two consecutive steps:
Firstly, the achievement of Riempps KPIs was
verified by means of a structured survey and a
structured interview. The survey consisted of 41

252

questions, mainly focused on cultural, personal,


and strategic success factors. The questionnaire
was distributed to 50 employees directly involved
in the KM initiative and 17 analyzable questionnaires were returned (a return rate of 34%). Both
survey and questionnaire can be viewed in the
appendix (Table 1 and Table 2).
The structured interview was conducted with
the chief technology architect of the acquired company. It consisted of 25 questions and focused on
technical success factors. The survey as well as the
interview dealt with those of Riempps KPIs that
can be assigned to CSFs SF1, SF2, SF3, SF4, SF5,
SF8 and SF10 the ones that can be described as
being either a technical, strategic or cultural and
personal success factor. The main results of the
first step are summarized in Figure 10.
The results lead to three assumptions:
1. The technical success factors were
achieved due to horizontal integration
on the system layer.
2. The cultural and personal success factors were achieved due to horizontal
and cultural integration, as well as to
the integration of the KM processes
and roles in the KMS.
3. The strategic success factors were
not achieved due to a lack of vertical
integration across the three layers.
These three assumptions were validated by
five semi-structured interviews with the initiators and key managers of the KM initiative (the
interview guide can be examined through table
3 in the appendix). This constitutes the second
step of the case study. The results and insights
of the first step were investigated and discussed
in more detail.
All questions focused more or less equally on the
following factors:

The Relevance of Integration for Knowledge Management Success

Figure 10. Attainment degree of the success factors of Jennex/Olfmans model

(1) Technical aspects (especially regarding


the integration of the KMS into the
corporate portal).
(2) Personal and cultural aspects (especially regarding the horizontal integration of KM processes, the integration
of the KM processes with the KMS,
and the operational and organizational
structure).
(3) Strategic aspects (especially regarding
the transparency and communication
of the KM strategy and KM goals, as
well as the knowledge structure).
The elementary and most meaningful results
of the verification of the three assumptions are
discussed below:
1.

Horizontal integration on the system layer


was achieved by integrating the IT infra-

structure along the four horizontal pillars


(content, collaboration, competence, and
orientation) of Riempps architecture. Data
storages are integrated with each other per
pillar, thus allowing the standardization of
diverse applications. On the application
level, integration basically appears in the
complexity of internal and external applications. An integrated regulation framework
can be ensured by a standardized and continuously used taxonomy, which also forms the
basis for a pillar of comprehensive indexing
in order to allocate an overall search function.
A complex portal solution is available and
KM functions and applications, as well as the
corresponding content are deeply integrated.
The integration of portal applications mainly
refers to an integrated search for content,
competences and collaboration rooms, as
well as the aligned use of search engines.

253

The Relevance of Integration for Knowledge Management Success

2.

3.

254

The presentation level of KMS is realized


by the use of the graphical user interface
of the companys portal, whose uniform
configuration ensures an integrated working
environment for its users.
The cultural and personal success factors
refer to the motivation and commitment of
users, as well as a companys predominant
organizational culture. These factors were
achieved due to horizontal integration on the
process level, cultural integration, as well as
the integration of KM processes and roles in
the KMS. In respect of motivation and commitment, it is noteworthy that all employees
participate in KM activities voluntarily,
but show a high intrinsic motivation. The
companys knowledge competencies and
KM experts are also highly motivated and
engaged. They regularly present themselves
as role models in diverse communities. In
this context, the enormous freedom of scope
for creation, collaboration, documentation,
and reflection needs to be mentioned. All of
these points can be ascribed to the processes
and roles successful integration with the
KMS and companys culture. Various training and further education measures (physical
training, as well as audio and web cast sessions) were introduced in the beginning of
the post-merger integration phase to support
these developments. Another positive aspect
was the active usage of content management functions and competence directories
by authors, competencies, and searching
employees, as well as the satisfactory assessment of the feedback opportunities between
these employees. This was ensured through
a satisfactory horizontal integration on the
process level.
The strategic success factors focus on the
overall knowledge strategy, the knowledge
structure in an organization, and the aligned
articulation of KM goals. The achievement
of these success factors failed due to the

lack of vertical integration across the three


layers (strategy, process and system layer)
of the architecture. The KM topic was not
tightly integrated into the overall change
management process of the post-merger
integration activities. No comprehensive
information policy, concrete authorization
system, or employee incentive system have
been introduced. There was also no clear
and definite objective for the KM areas
content, competence and community management. The KM goals are not consistent
with the overall organizational goals and
the understanding of the KM and KMS
meaning, aims, and objectives needs to be
communicated more clearly throughout the
company.
Summarizing the investigation, it can be stated
that the attainment or failure of the success factors
depends on the degree of integration. The basic
assumption has therefore been strengthened.
The necessity for an integrated and holistic
view is outlined by the case study horizontal
integration, cultural integration, and the integration of KM processes and KM roles into the KMS
support the usage and frequency of use of the
KMS, but do not ensure that the KMS is used in
the most effective and efficient way.
In order to control the usage of KMS to
strengthen the organizations performance and
the achievement of strategic goals, a companys
overall strategy and goals need to be aligned to
KM strategy and KM goals. In terms of vertical
integration, KM strategy and goals need to be
transparent and clearly communicated so that all
employees act in concert and walk into the same
direction. Hence, the described KM initiative
can be evaluated as unsuccessful. The technical
and cultural conditions required for success were
established, but the strategic aspects were largely
disregarded.

The Relevance of Integration for Knowledge Management Success

concluSion, liMitationS,
and furtHer reSearcH
The overall goal of this paper to analyze and
investigate the coherences, connections, and
interdependencies between KM success and an
integrated and holistic perspective on KM has
been achieved. The CSFs of Jennex/Olfmans
model were identified as widely accepted factors
as they are, firstly, based on the cognitions of accredited and valued KM publications and studies
referring to a total of 78 KM initiatives. Secondly,
they can be applied to all elemental KM success
models. The 78 KPIs of Riempps model focus on
different dimensions of integration and evaluate
successful KM in terms of integration success.
In summary, the literature review and comparison of CSFs and KPIs show that it is feasible to
focus on achieving Riempps KPIs, hence concentrating on integration. In the end, this approach
will lead to an achievement of the 12 Jennex/
Olfman CSFs and ensure KM initiatives success.
The results support that in order to achieve KM
success, understood as a multidimensional concept
as defined by Jennex, Smolnik and Croasdell
(section 3.1), all elements of the integrated KMS
architecture need to be addressed in a structured
and integrated approach.
The case study supports these findings. The
KMS are indeed used intensively by the employees. However, due to a lack of transparency
regarding the KM strategy and goals and a lack of
vertical integration, the KMS are not used in the
most efficient way in terms of an improvement of
the companys performance. A broad consideration
of all the integration dimensions is necessary to
execute KM initiatives successfully.
It would be tempting to conclude and not
only to assume that integrated KM determines
KM success. In order to do so, more real-life cases
need to be conducted. This can be regarded as a
limitation of the findings in this article, as well
as an area for further research work.

Additionally, effort should be made to develop


an integrated KM success model. The framework can either focus fully on Riempps architecture for integrated KMS or on selected aspects.
In respect of the frameworks configuration, an
absolutely new model could be developed, or an
existing model for example, the Jennex/Olfman
success model could be extended appropriately.

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KeY terMS and definitionS


Holistic KM View: An holistic KM view
integrates people, processes, and technology. The
KMS is created by combining content, organizational processes, users and technical solutions to
facilitate the capture, storage, retrieval, transfer,
and reuse of knowledge to improve organizational
and individual decision-making.

Integrated KMS Perspective: An integrated


KMS is design to fit an infrastructure and generic
KM perspective (KM in the large) as well as process or task based KM approach (KM in the small).
An Architecture for Integrated KMS: An
architecture for integrated KMS consists vertically
of three layers (strategy, process, and system) and
horizontally of four pillars (content, competence,
collaboration, and orientation). All these elements
are influenced by the organizational culture.
An Integrated Measurement System: The
integrated measurement system verifies the target achievement of (1) knowledge transparency
creation, (2) knowledge exchange promotion,
(3) knowledge development control, and (4)
knowledge efficiency ensurance by taking quality
improvements as well as time and cost reductions
into consideration.
Knowledge Management (System) Success: KM and KMS success are a multidimensional concept. Each includes capturing the right
knowledge, getting the right knowledge to the
right user, and using this knowledge to improve
organizational and/or individual performance. It
is measured using the dimensions of impact on
business processes, impact on strategy, leadership,
and knowledge content.
Critical Success Factors: Critical success
factors thus are the limited number of areas in
which results, if they are satisfactory, will ensure successful competitive performance for the
organization. They are the few key areas where
things must go right for the business to flourish.

257

The Relevance of Integration for Knowledge Management Success

aPPendix
Table 1. Employee survey
Answer
style

Process Layer

1) Have introdutory courses, measures for further education or other trainings, which addressed content
management process flows, been performed within the last 6 months?

Yes/No

2) Briefly think of how long it usually takes in order to gather an information within the portal. Can you
assess a performance increases compared to the initial situation prior to the merger?

Yes/No

3) Is your content management performance assessed on the basis of target agreements or savored by
means of honors?

Yes/No
Numberbased

4) Assess the feedback opportunities of users on active authors within the portal.
5) Have introdutory courses, measures for further education or other trainings, which addressed the handling of content management functions, been performed within the last 6 months?
System Layer

Content Management

Question

6) Assess the possibilities of a comprehensive content creation in the content management area. Examples
for comprehensive content creation are rich-text formatting, grouping and linking of information objects,
etc.
7) Have you ever been motivated by other employees input in such a way, that yourself became an
author?

Process Layer
System Layer

Numberbased
Yes/No
Numberbased

8) Asses comfort and usability of the portal user interface.

Competence Management

Yes/No

9) Have introdutory courses, measures for further education or other trainings, which addressed competence management process flows, been performed within the last 6 months?

Yes/No

10) Assess the success of integrating the topic area knowledge management into the overall change management process activated by the merger

Numberbased

11) Have you been adverted to in how far the functionalities of a competence management system (e.g.
expert functions) can deliver a surplus to your work? Assess the quality and degree of communication with
regards to that topic accordant to your satisfaction.

Numberbased

12) Does a definite goal with regards to competence management exist and is this goal clearly communicated by means of appropriate media (e.g. newsletter)?

Yes/No

13) Does a guard against fear of the glassy employee exist by means of a definite authorization system
and comprehensive information?

Numberbased

14) Have introdutory courses, measures for further education or other trainings, which addressed the handling of competence management functions, been performed within the last 6 months?

Yes/No

15) Assess the possibility of contacting and the establishment of contact to important competences accordant to your satisfaction.

Numberbased

16) Assess the usage of the competence directory within the portal. Self-criticaly assess the quality and
quantitiy of your own entries as well as the frequency of use.

Numberbased

17) Assess the comfortability of navigation-, search- and analysis options as well as the effectiveness of
visualization of competence management functions.

Numberbased

continued on following page

258

The Relevance of Integration for Knowledge Management Success

Table 1. continued
Answer
style

Question
18) Assess the application of information and communication systems in support of existing collaboration
and community functions (e.g. Communities of Practice, virtual team rooms, etc.)

Process Layer
System Layer
Process Layer
System Layer

Management of orientation

Collaboration Management

19) Do definite and clearly communicated goals for Communities and virtual team rooms exist?

Numberbased
Yes/No

20) Assess the proportion of community members and members of virtual team rooms who are experts
accordant to your satisfaction.

Numberbased

21) Assess the IT-solution which is applied for realization and the support of communities and virtual team
rooms.

Numberbased

22) Assess the engagement and the collaboration frequency of role models (e.g. moderator, team officer,
project officer, etc.) in communities and virtual team rooms.

Numberbased

23) Assess the intrinsic motivation of group memebers with regards to the advancement of a community
or virtual team room.

Numberbased

24) Have introdutory courses, measures for further education or other trainings, which addressed the handling of collaboration management functions, been performed within the last 6 months?

Yes/No

25) Is your effort in communities or virtual team rooms pushed through the motivating behaviour of supervisors?

Yes/No

26) Assess the integration of community functions and virtual team room environments into the daily
work environment accordant to your satisfaction.
27) Are you always online while your PC is on power?

Numberbased
Yes/No

28) Assess convenience and comfortability of the operability of collaboration functions.

Numberbased

29) Assess the integration of orientation functions (search and retrieval, navigation, etc.) into existing
information systems.

Numberbased

30) Assess the adequacy of the compromise between convenience articulateness of navigation and search
versus depth and breadth of orientation functions.

Numberbased

31) Assess the illustration of the established language use in combination with adequate terminological
percision accordant to your satisfaction.

Numberbased

32) Assess the patency of the application of taxonomies in classfication, navigation and building of search
indices.

Numberbased

33) Assess the appropriateness of push- and pull-personalization in knowledge management systems.

Numberbased

34) Assess the composition of layout and navigation with accordance to patency and clearness.

Numberbased

35) Assess the quality of conditioning of search results according to your satisfaction.

Numberbased

36) Assess the speed and accuracy of search functions accordant to your satisfaction.

Numberbased

259

The Relevance of Integration for Knowledge Management Success

Table 2. Guidelines of structured interview


Question

Answer
style

1) Convenient integration of information objects in task execution.

Given?

Yes/No

2) Integrability with other applications by standardized interfaces.

Given?

Yes/No

3) Comfortable creation and revision of information objects in the daily work


environment using familiar tools (e.g. WYSIWYG)

Given?

Yes/No

4) Disassocation of content, structure, presentation, and application logic.

Given?

Yes/No

5) Information objects are ideally stored in an integrated, database-based


information memory, which is applicable across all platforms.

Given?

Yes/No

6) Rendering for all possible file formats for various clients.

Given?

Yes/No

7) Creation and preservation of maintenance processes.

Given?

Yes/No

8) Back-end integration with existing human resources management systems


in order to avoid inconsistencies.

Given?

Yes/No

9) Front-end integration with systems of the daily work environment.

Given?

Yes/No

10) High network capacity

Given?

Yes/No

11) Automatic adoption of available functions to connected hardware and


different network capacities.

Given?

Yes/No

Discussed Critical Success Factor


Process
Layer

Content
Management

Competence
Management
Collaboration
Management

System
Layer

Process
Layer
System
Layer

System
Layer

Process
Layer

Management of
orientation

260

System
Layer

12) An integrated user-interface.

Given?

Yes/No

13) Glossary and taxonomy are closely restricted to central terms.

Given?

Yes/No

14) Periodically passing maint