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MRR
39,10
1214
Received 21 September 2015
Revised 3 January 2016
8 February 2016
Accepted 9 February 2016
Management Research Review
Vol. 39 No. 10, 2016
pp. 1214-1238
© Emerald Group Publishing Limited
2040-8269
DOI 10.1108/MRR-09-2015-0214
The impact of knowledge
management on innovation
An empirical study on Jordanian
consultancy firms
Bader Yousef Obeidat and Mai Maher Al-Suradi
Department of Business Management, The University of Jordan,
Amman, Jordan
Ra’ed Masa’deh
MIS Department, The University of Jordan, Amman, Jordan, and
Ali Tarhini
Department of Computer Science, Brunel University London,
Uxbridge, UK
Abstract
Purpose – The paper aims to examine the effect of knowledge management processes (knowledge
acquisition, knowledge sharing and knowledge utilization) and knowledge management approaches
(social network, codification and personalization) on innovation in Jordanian consultancy firms.
Design/methodology/approach – A questionnaire that targets 266 respondents resulted in 216
usable ones with a response rate of 81.2 per cent. To test the research hypotheses, a multiple regression
analysis was conducted, in addition to descriptive statistics that provide a background about the
respondents.
Findings – The analysis showed that there is a significant and positive impact of knowledge
management processes on innovation in Jordanian consulting firms, as well as a significant and positive
effect of codification and personalization approaches on innovation, while the social network approach
has a significant negative impact with innovation.
Originality/value – This is the first study that examines the effect of knowledge management
processes (knowledge acquisition, knowledge sharing and knowledge utilization) and knowledge
management approaches (social network, codification and personalization) on innovation in Jordanian
consultancy firms.
Keywords Marketing, Innovation, Jordan, Knowledge management, Knowledge sharing,
Management, Quantitative analysis, Consultancy firms
Paper type Research paper
1. Introduction
In the presence of hypercompetitive, complex, uncertain and rapidly changing
environment, knowledge management (KM) becomes one of the most interesting
and important concepts in management. Previous research studies (Baro, 2008;
Andreeva and Kianto, 2012; Shannak et al., 2012; Obeidat and Abdallah, 2014)
showed that knowledge’s importance as part of the organizational assets is
increasing, as it has a positive effect on gaining competitive advantage and
improving innovation that lead the organization to a superior performance.
Successful companies have to gain the ability to collect, store and distribute Impact of
specialized knowledge to create and sustain competitive advantage (Pusaksrikit, knowledge
2006; Palacios et al., 2008; Alkalha et al., 2012; El-Masri et al., 2015). Further,
according to Deverell and Lassen (2006), consulting firms’ ability to leverage
management
knowledge to innovate is a critical issue. Additionally, Plessis (2007) showed that
innovation relies heavily on the availability of knowledge; so, to reduce the
complexity that results from easy access and reach of knowledge, knowledge has to 1215
be identified and managed carefully to ensure successful innovation. Thus,
innovation needs to include the firms’ specific knowledge, initiatives and
competences (Baro, 2008).
Indeed, knowledge-intensive business services (KIBS) such as consulting firms
depend heavily on KM (Pusaksrikit, 2006; Masa’deh et al., 2015). The core work of
consultancy firms involves the creation and application of knowledge, and their
capabilities depend heavily on their ability to make the expertise bodies available to
create knowledge that meets the customers’ needs (Powell and Ambrosini, 2012).
Accordingly, consulting firms are considered an appropriate context to examine the
effect of KM on the innovation, where knowledge and technological innovation have
become successful key factors (Palacios et al., 2008; Alenezi et al., 2015a, 2015b). Baro
(2008) showed that knowledge-intensive character for consulting purposes can be
interpreted in terms of both the intensive use of highly skilled and specialized human
resources and the conditions under which transactions between the supplier and the
user of such services occur. In addition, Baro (2008) clarified that consulting firms
contribute to reducing the client’s uncertainty regarding some activities; taking
decisions by allowing their specialized staff to play the role of experts; identifying the
best practices of other companies; sharing and implementing their experiences;
providing the needed information and knowledge for diagnosing and solving problems;
providing the client with the required training; and developing and organizing the most
suitable interface between the client and their environment.
The impact of KM processes and approaches on innovation has been studied by
several researchers separately. However, there are several reasons that make this
study important and distinctive. First, we are investigating the effect of KM from
two points of view: its operations and its approaches, as we found that there is a gap
in examining the effect of these two disciplines together on innovation in Jordanian
consultancies. Second, it is applied on intangible (services) industries rather than
tangible (product) industries, as the importance of services is increasing rapidly.
Third, most of the previous studies conducted in Jordan focused on applying KM
operations in the banking services sector; Sharabati et al. (2010) recommended
future research to focus on KM in Jordanian consultancies; hence, this study will
have a new contribution as it emphasizes on examining both of KM operations and
approaches in new KIBS (the consultancy sector).
Accordingly, the purpose of this study is to examine the effect of KM’s main
processes and approaches on innovation in Jordanian consultancy firms, as these firms
are considered knowledge-intensive industries that depend heavily on knowledge and
the way it is managed (Pusaksrikit, 2006; Sharabati et al., 2010; Cricelli et al., 2014). On
the other hand, these firms seek to make better decisions by searching for more accurate
information (Villasalero, 2014; Alenezi et al., 2015a, 2015b; Masa’deh et al., 2016).
Almajali et al. (2016) and Crane and Bontis (2014) showed that one of the main core
MRR competencies of consultancy firms is to provide their clients with the most recent and
39,10 latest advice as well as to implement knowledge based on practical and scientific
sources. Thus, the aim of this research is to investigate the impact of KM processes and
approaches on innovation in the Jordanian consulting sector. Moreover, this study
addressed the following main questions:
Q1. Do KM processes in terms of knowledge acquisition, sharing and utilization
1216 impact innovation?
Q2. Do KM approaches in terms of social network, codification and personalization
impact innovation?
The rest of this paper is organized as follows. It begins with the relevant literature
and previous studies about KM processes and approaches, as well as other previous
studies that link KM with innovation. Then, the methodology in which the research
theoretical model, hypotheses, population and sample, data collection and analysis
methods and the validity and reliability of the study are presented. It is then
followed by testing the proposed hypotheses in the data analysis section. The
discussion and conclusion are then provided and areas for future research are also
addressed.

2. Literature review
Nowadays, one of the main characteristics of this century is that it is considered a
knowledge era, where knowledge becomes an important asset that firms can use to
minimize the complexity of the innovation process and to obtain their competitive
advantage by considering what everybody in the organization knows and how they use
their knowledge (Massingham and Diment, 2009; Mas-Machuca and Costa, 2012; Powell
and Ambrosini, 2012; Wu and Chen, 2014; Tarhini et al., 2015). Swan and Newell (2000)
showed that, as a result of information age or knowledge era, the current focus of KM
recognizes a decrease in traditional manual work, while the importance of innovation,
knowledge work and knowledge workers is increasing. A shift in industrialized
economies increased the interest in KM, as the foundation of industrialized economies
moved from natural resources to intellectual assets, so firms have been forced to focus
on the knowledge underlying their business and how this knowledge is used (Swan and
Newell, 2000). On the other hand, knowledge importance has been enhanced by the rise
of networks and technological tools that facilitate the codifying, storing and sharing of
certain kinds of knowledge more cheaply and easily (Hansen et al., 1999; Del Giudice and
Maggioni, 2014; Abbasi et al., 2015).
As the importance of knowledge increases by considering it one of the main assets
that organizations need to deploy to enhance its competitive advantage, interests in KM
increases as well by considering the management of knowledge and human capital
essential elements for any type of business (Swan and Newell, 2000; Gloet and
Terziovski, 2004; Cruz-González et al., 2014). KM can be defined in various ways in
general and in the light of innovation. Palacios et al. (2008, p. 292) defined KM from two
dimensions: principles and practices as follows:
Knowledge management is a management tool characterized by a set of principles along
with a series of practices and techniques through which the principles are introduced, the
aim of which is to create, convert, disseminate and utilize knowledge.
As cited by Gloet and Terziovski (2004, p. 403), KM was defined as: Impact of
An umbrella term for a wide variety of interdependent and interlocking functions consisting knowledge
of: knowledge creation; knowledge valuation and metrics; knowledge mapping and indexing; management
knowledge transport, storage and distribution; and knowledge sharing.
Davenport and Horton (2007) showed that KM is not concerned with data, or process, or
exploiting knowledge assets; it is the manipulation and control of what gets to count as
knowledge. While Gloet and Terziovski (2004) defined KM as the formalization of and 1217
access of experience, knowledge and expertise that creates new capabilities, enables
superior performance, encourages innovation and enhances customer value.
As the importance of knowledge and KM increases, the need for a better
understanding and applying it increases as well, especially in the Arab world, as cited in
Skok and Tahir (2010), the lack of understanding the importance of KM in organizations,
the low of team spirit and sharing knowledge, the dependency of verbal and informal
approaches to transfer knowledge and the inappropriate technology used in KM
systems; all these findings enhance the need for more research in the KM field in the
Arab world; and Jordan, as suggested by Abu Khadra and Rawabdeh (2006), Mohamed
et al. (2008), Sharabati et al. (2010) and Cricelli et al. (2014).

2.1 Knowledge management processes

KM has three main processes which are: knowledge acquisition, knowledge sharing or
transfer and knowledge utilization or application (Tiwana, 1999; Ling et al., 2009; Lin
et al., 2012). Ling et al. (2009) explained that firms need to ensure that they acquire, share
and utilize the best possible knowledge in all areas of work with embedding their
knowledge in their operations to increase innovation.
Knowledge acquisition is the first step in the KM process, as for knowledge to be
managed, it must first of all be captured or acquired in some useful form, e.g. stored in an
ontology, it is a complex process which traditionally is expensive, as well as its main
limitations are cost, time and subjectivity. Tiwana (1999) defined knowledge acquisition
as the process of development and creation of insights, skills and relationships. Choo
(2003) defined knowledge generation or acquisition as the activities that increase the
stock of organizational knowledge. Knowledge acquisition refers to searching for,
identifying, selecting, collecting, organizing and mapping information/knowledge
(Pinho et al., 2012). Several methods for acquiring knowledge were identified; for
example, A.J. Rhem & Associates Inc (2001) suggested a useful framework to capture
knowledge in minimum cost, time and errors. A.J. Rhem & Associates Inc framework
addressed specific needs of the knowledge engineer during the knowledge acquisition
process; these needs include the capability to break down the knowledge acquisition
task into manageable subtasks, concentrate on a representation of expertise that is
natural to domain experts and notice the patterns in knowledge and to resolve conflict
when aspects of knowledge of a particular domain become uncertain. From Lopez and
Esteves (2013) perspective, knowledge acquisition can be enabled through
organization’s external and internal networks, which would be used to promote
innovation within the organizations, by gaining the support of top managers and the
designation of innovation champions who facilitate solving any new problems.
The power of knowledge is enhanced by sharing this knowledge through
disseminating and making what is already known available. Knowledge sharing is
MRR important to discover if the knowledge that already exists can be used and searched for
39,10 by knowledge pull (searching by the person who needs the knowledge) or knowledge
push through the feeding of knowledge to recipient who needs it (Tiwana, 1999). Lee
et al. (2004) defined knowledge sharing as the process that promotes diffusion of
knowledge and contributes to making the work process masterful and
knowledge-intensive, where knowledge workers capture the needed knowledge from
1218 multiple sources and ensure the integration of these sources in a way that lead to
improving performance and accomplishing workers’ tasks successfully. Sharing
knowledge is a key process in consultancies; Massaro et al. (2014) showed that it is
important to have the proper management control systems (such as having reportable
times for sharing knowledge plus focusing on the importance of knowledge sharing)
that encourage consultants to disseminate their knowledge in a way that will reduce
hidden and redundant knowledge, people turn over and knowledge depreciation of
firm’s relational capital. According to Hooff and Huysman (2009), the process of
knowledge sharing must be seen as a shared process of knowledge creation, where
parties make sense of certain events and construct meaning. So, it is not only a process
of transforming knowledge from one person to another. Knowledge sharing is
influenced by different factors which are:
• opportunities to share factor;
• motivation to share factor;
• nature of knowledge factor;
• culture factor;
• nature of the individual factor; and
• organizational velocity (Eaves, 2014).

Darroch and McNaughton (2002) showed that there is a link between knowledge sharing
and innovation, as when firms encourage employees to distribute knowledge within
groups and organizations, this will enhance their ability to generate and create new
ideas and opportunities. As cited by Huang and Li (2009), the link between knowledge
sharing and innovative performance was tested by Spencer, and found that sharing
technological knowledge among competitors will lead to higher innovative performance
than those who did not share knowledge. Thus, knowledge sharing (knowledge
transfer) is necessary for all organizations, but it is especially critical for the functioning
of management consulting firms, as knowledge is the main block of the services such
firms offer their clients (Lahti and Beyerlein, 2000).
The role of knowledge utilization in consulting organizations has been recognized
since a long time. Based on Ducan (1972), one of the major functions of management
consultant is the utilization of expert knowledge for solving specific client’s problem,
and knowledge utilization reduces complex interactions throughout large number of
individuals and groups, as the interactions will be between some theoretical resource
and user within the knowledge flow system. Knowledge utilization is concerned with
using and applying knowledge to organizational functions or business processes to
perform activities that can be seen to have explicit results, such as products, services,
procedures and regulations (Pasha and Pasha, 2008). According to Azzam (2010),
knowledge utilization is the use and application of knowledge and the production of
commercial value for the customer. Pasha and Pasha (2008) showed that knowledge
utilization does not focus on one area, as it is a combination of social, technological and Impact of
operational aspects, as each of them plays its own role in knowledge utilization, while knowledge
technology can enable and facilitate access to knowledge repositories, social and
operational aspects can include the exploitation of knowledge that lead to achieve
management
business goals. Indeed, several researchers consider information technology and its
flexibility as an enabler to achieve the desired competitive advantages, considered as a
strategic weapon, and as a crucial support to operational and strategic business 1219
processes (Oliva, 2014; Masa’deh et al., 2016).

2.2 Knowledge management approaches

Consulting firms vary in the approaches they use to implement KM. These approaches
could be informal approaches such as social networks or formal approaches that are
classified to codification and personalization (Powell and Ambrosini, 2012). Swan and
Newell (2000) dealt with the approaches as models, namely, the networking model, the
community model and the cognitive model. While Hansen et al. (1999) classified the most
common and used approaches to only two: codification and personalization.
Powell and Ambrosini (2012) suggested a KM approach that is called the pluralistic
approach to KM, which resulted in knowledge searchers using KM systems for more
general knowledge, and then calling on colleagues to provide specific knowledge. While
Hansen et al. (1999) suggested that organizations should focus on either the
personalization or codification strategy, arguing that it is better to excel in one approach
than to distribute resources on both. Indeed, Powell and Ambrosini (2012) stated that
within the social network approach, knowledge is transferred by contacting a person
directly, depends on the present memory of the knowledge provider and includes
documented as well as non-documented knowledge, whereas the codification approach
requires having individuals document their knowledge, then collect this knowledge in a
central location, generally in some form of searchable electronic KM system, and it
allows the knowledge to be accessed without needing to contact the provider of the
knowledge. Also, the personalization approach is a formalization of social networks
rather than contacting someone within someone social network, as he/she would consult
the personalization tool and contact the ideal person for the desired knowledge.
By having multiple approaches of KM, a company’s strategy for KM should reflect its
competitive strategy (Hansen et al., 1999). Powell and Ambrosini (2012) proposed a link
between Porter’s (1980) generic strategies and KM approaches. As cited by Allen and
Helms (2006) and Vunjak (2012), Porter’s generic business strategies are cost leadership,
differentiation and focus strategy. Cost leadership focuses on gaining competitive
advantage by having the lowest cost in industry through mass production, economies of
scale and comparable products/services. While differentiation focuses on providing
unique products/services with high quality, and it provides high customers’ loyalty;
with this strategy, firms need to explore the needs and the behavior of its customers, so
that it can recognize what is the actual value added for them. Finally, a focus strategy
focuses on a segment or specific needs for a specific market niche, not the whole
customers (Vunjak, 2012). Powell and Ambrosini (2012) linked the personalization
strategy with Porter’s differentiation strategy and the codification strategy with
Porter’s cost leadership strategy. Also, Tiwana (1999) showed that it is better suited for
the companies to implement the personalization strategy if it faces one-off and unique
problems that rely on tacit knowledge and expertise. While companies that deal with
MRR similar problems and decisions are advised to implement the codification strategy that
39,10 depends on storing, indexing, retrieving and reusing knowledge by using technology.

2.3 Innovation
Innovation is an important aspect that organizations have to take into consideration
when developing their business strategies to build and sustain competitive advantage
1220 (Plessis, 2007). Tether (2003) showed that firms seek to innovate their services for
multiple aims such as improving service quality, opening new markets, extending
service range, improving flexibility, reducing labor cost, replacing old services and
reducing environment damage and energy and materials use, and improving service
quality was seen as the most widely recognized reason for innovation. Innovation can be
defined as the creation of new knowledge and ideas to facilitate new business outcomes,
aimed at improving internal business processes and structures and to create
market-driven products and services; innovation encompasses both radical and
incremental innovation (Plessis, 2007). Palacios et al. (2008) cited that innovation has
three capabilities that can be summarized by the following: First, product/service
innovation that refers to the provision of differentiated, improved or new products/
services in the market. This product innovation can be done by radical innovation or
incremental innovation. Second, process innovation which is a process in which a firm
can provide a better manufacturing or service process than the current operation. Third,
managerial innovation that is a capability for implementing new managerial
regulations, systems, practices, methods and so on, that increase managerial efficiency.
According to Riddle (2008), service innovation can be applied in three ways: first, to
make changes in service itself or what is being offered by applying something that did
not exist before or meeting the customer’s needs more effectively; second, to make
changes in the service delivery process or how the service is being provided. By
improving the production delivery or distribution methods or by changing the role of
staff and/or customers. The most obvious form of innovation in this field is increasing
the accessibility and the degree of self-service; third, to make changes in the
organizational and managerial structure or how service provision is supported, by
improving the managerial techniques or implementing a new corporate strategy. This
innovation is the least obvious to the customers. Furthermore, Taminiau et al. (2009)
showed that innovation is a crucial factor for the success of consultancy firms, as
consultants continuously emphasize the need to innovate in their advice to their clients.
Within the consultancy sector, one of the main core competences of consultants is to
deliver the latest advice and to implement knowledge based on practical and scientific
sources. A main difficulty in researching innovation within the consultancy sector
resides in the fact that innovation in the service sector is much more difficult to pinpoint
than, for example, the more tangible innovation process in manufacturing firms. So,
innovation resides on the re-combination of new services, which gives new insights and
enhances the co-operation with the customers.

2.4 Knowledge management and innovation

KM is not solely focused on innovation, but it creates an environment that causes the
innovation to take place (Plessis, 2007). According to Doloreux and Shearmur (2010), the
relationship between innovation and KIBS can be categorized in to two main broad
perspectives. First, KIBS such as consultancies act as intermediaries in their client’s side, as
they can be conceptualized as carriers, sources and facilitators of innovation for their Impact of
customer. So, KIBS are one of the information-gathering and knowledge-transmission knowledge
processes through collaborative work with their customers. Second, KIBS can play the role
of innovator by themselves, through combining new and old knowledge and their inputs and
management
outputs include a high degree of implicit knowledge. So, they are not an innovation supporter
for their clients, but also carriers of internal innovation activities, in other words, to innovate
in their own rights. 1221
The organization’s ability to innovate depends on its internal competencies such as
its own knowledge, organizational and technological base as well as it depends on its
skills in finding, adopting, developing and enlarging knowledge generated within it plus
its interactions with its surrounding environment. Based on that innovation is a risky,
uncertain, complex and essentially interactive process that results from many players
who directly or indirectly participate by adding their specific knowledge, initiatives and
competencies (Baro, 2008; Della Peruta et al., 2014). According to Shang et al. (2009),
knowledge is both learned and exploited for business enhancement and innovation.
Additionally, Huang and Li (2009) suggested that firms can prompt the sharing,
application and deployment of knowledge to facilitate innovation, as KM has a positive
effect and contribution to transform tacit knowledge into innovative products, services
and processes, which improve innovative performance. Some studies showed that there
is a relationship between organizational innovation and knowledge transfer as well as
reverse knowledge transfer, but its effect depends heavily on learning orientations
(Jimenéz-Jimenéz et al., 2014). Also, as innovation is an interactive process that involves
variety of factors, it will be enhanced by the increasing of the frequent and intensive
knowledge interactions as well as observations and comparison of peers (James et al.,
2012).

3. Research methodology
This section provides the methodology applied in the current study. It consists of the
research model, operational definitions of the study’s independent and dependent
variables, research hypotheses, besides data collection tool and research population and
sample.

3.1 Research model

The major elements of this research are established based on the preceding literature,
either theoretically or empirically. Indeed, this study used variables that are common in
the KM literature. Figure 1 represents a model for the study that shows the independent
variables: knowledge processes and approaches, and the dependent variable
(innovation) and the proposed relationship between them.

3.2 Operational definitions

The current research considers two independent variables (KM processes and
approaches) and one dependent variable (innovation). Further, KM processes include
knowledge acquisition, knowledge sharing and knowledge utilization, whereas KM
approaches contain social networking, codification and personalization.
Knowledge acquisition is defined as the process by which the stock of organizational
knowledge increases. This can be done by hiring new individuals, buying another
organization, renting/leasing external knowledge, creating research and development
unit that is dedicated to capturing new knowledge and having employees who can
MRR
39,10

1222

Figure 1.
Research model

acquire new knowledge quickly and have the openness to learn new skills (Choo, 2003).
Accordingly, knowledge acquisition has been measured by six questions which are
adapted from (Choo, 2003; Huang and Li, 2009; Azzam, 2010). Knowledge sharing or
knowledge transfer involves conveying, diffusing and sharing knowledge within a firm
or among different firms (Lahti and Beyerlein, 2000). Lee et al. (2004) cited that
knowledge sharing can be measured by sharing information and knowledge necessary
for the tasks, improvements in task efficiency by the sharing of knowledge, prompting
sharing of knowledge with other teams and developing information systems like
intranet to share knowledge. This variable has been measured by five questions in the
current research, which were identified from (Lee et al., 2004; Huang and Li, 2009).
Knowledge utilization is to adopt the best practice from other leading organizations,
uncover relevant knowledge and apply it. According to Lee et al. (2004), it depends on
two constructs: the first one is the degree of knowledge utilization in an organization and
the second one focuses on knowledge utilization culture. Huang and Li (2009) suggested
that there are two indicators in knowledge application, which are effective management
of different sources and types of knowledge and the utilization of knowledge into
practical use. Knowledge utilization has been measured by five questions adapted from
(Lee et al., 2004; Huang and Li, 2009).
Social network has been measured by six questions, which were developed by
intensive study of Powell and Ambrosini (2012) and Swan and Newell (2000). The
questions were developed by using the main indicators of applying KM using social
network such as the type of relation between employees, the limitations of capturing
knowledge, the relationship between the knowledge provider and receiver, the source of
knowledge and the consistency of the knowledge. Whereas codification and
personalization have been measured by 12 questions, 6 questions for each, and all Impact of
adapted from Tiwana (1999). Also, innovation has been measured by nine questions in knowledge
the current research, identified from (Oke, 2007; Huang and Li, 2009).
management

3.3 Research hypotheses

To test the research model of the impact of KM processes and approaches on innovation, 1223
the study is hypothesized as follows:
H1. There is a statistically significant impact of KM processes (acquisition, sharing
and utilization) on innovation.
H2. There is a statistically significant impact of KM approaches (social network,
codification and personalization) on innovation.

3.4 Population and sample

The population of the study includes the whole Jordanian consulting firms
(management, engineering, legal, technological, accounting, training, human resources,
financial) because KM and innovation play a major role in these types of firms to gain
and sustain their competitive advantage. In consultancy firms, the creation and
application of knowledge and consultant’s experience is the core for their work (Powell
and Ambrosini, 2012), while the innovation in these firms resides on the re-combination
of new services that brings new co-operation with customers (Taminiau et al., 2009). To
be more specific, the sustained success of a consultancy firm is driven by the knowledge
of its consultants, which is used to develop and deliver the service solutions to its clients
(Lahti and Beyerlein, 2000; Masa’deh et al., 2015; Orozco et al., 2015).
Based on an interview with the IT department in Companies Control Department
(CCD) in Jordan, the number of consulting firms is 500 firms and the majority of them are
located in the capital (Amman). Hence, a random sample was selected from this
population to reach 216 filled questionnaires out of 266 distributed questionnaires that
were distributed and collected during October 2012 to December 2012. Questionnaires
were submitted to those who provided consulting services, regardless their current
position, so, the respondents were categorized in three main groups, each of them
includes different subgroups which are:
• consultants (legal, accounting, managerial, financial, human recourse,
information technology, insurance and educational);
• engineering consultants (civil, interior design, computer, planning, projects and
architect); and
• managerial or administrative positions (general manager, executive director,
technical director and department head).

The first two categories include individuals who get involved directly or indirectly with
clients and those have the needed knowledge and experience which can be improved and
take advantage of. While the last category includes managers at different levels who
provide consulting services besides playing an important role in encouraging
innovation and new ideas creation as well as applying and support KM processes and
approaches.
MRR 4. Data analysis and results
39,10 To explore the relationship between two independent variables (KM processes and
approaches) and one dependent variable (innovation), in which these variables have
been measured using the five-points Likert scale that varies between not applied at
all ⫽ 1 to totally applied ⫽ 5; reliability and validity analyses was conducted;
descriptive analysis was used to describe the characteristic of sample and the
1224 respondent to the questionnaires besides the independent and dependent variables.
Also, multiple regression analysis was used to test the research hypotheses.

4.1 Reliability and validity

Reliability analysis is related to the assessment of the degree of consistency between
multiple measurements of a variable, whereas validity analysis refers to the degree to
which a scale or set of measures accurately represents the construct (Hair et al., 1998),
whereas validity refers to which an instrument measures is expected to measure or what
the researcher wishes to measure (Blumberg et al., 2005). Indeed, the reliability of the
instrument was measured by the Cronbach’s alpha coefficient. Further, some scholars
(Bagozzi and Yi, 1988) suggested that the values of all indicators or dimensional scales
should be above the recommended value of 0.60. Table I represents the results of
Cronbach’s alpha for the independent and dependent variables.
Cronbach’s alpha coefficients of all the tested variables are above 0.60, which suggest
that the composite measure is reliable. In addition, the items selected to measure the
independent and dependent variables were validated and reused from previous
researches. Therefore, the researchers relied upon in enhancing the validity of the scale
was to benefit from a pre-used scale that is developed from other researchers. Also, the
questionnaire items were reviewed by four instructors of the Business Faculty at the
University of Jordan. The feedback from the chosen group for the pre-test contributed to
enhanced content validity of the instrument. Furthermore, to enhance the content
validity of the instrument, seven knowledge workers at Jordanian consultancy firms
were asked to give their feedback about the questionnaire, thus confirming that the
knowledge presented in the content of each question was relevant to the studied topic.

4.2 Respondents demographic profile

As indicated in Table II, the demographic profile of the respondents for this study
showed that they are typically males, consulting engineers, hold bachelor degrees and
about 47 per cent of them have experience more than 15 years.

Variables No. of items Cronbach alpha

Knowledge acquisition 6 0.862

Knowledge sharing 5 0.894
Knowledge utilization 5 0.893
Table I. Social network 6 0.753
Cronbach alpha for Codification 6 0.784
the KM processes Personalization 6 0.851
and approaches Innovation 9 0.927
Category Frequency (%)
Impact of
knowledge
Gender management
Male 142 65.7
Female 74 34.3
Total 216 100
Job position 1225
Consultant 74 34.2
Administration 60 27.8
Consulting engineer 82 38.0
Total 216 100
Qualification
Diploma 4 1.9
Bachelor 170 78.7
Graduate studies 42 19.4
Total 216 100
Experience
Less than 5 years 38 17.6
5 to less than 10 years 58 26.9 Table II.
10 to less than 15 years 18 8.3 Description of the
More than 15 years 102 47.2 respondents
Total 216 100 demographic profiles

4.3 Descriptive analysis

To describe the responses and thus the attitude of the respondents toward each
question, they were asked in the survey, the mean and the standard deviation were
estimated. While the mean shows the central tendency of the data, the standard
deviation measures the dispersion which offers an index of the spread or
variability in the data (Sekaran, 2003). In other words, a small standard deviation for
a set of values reveals that these values are clustered closely about the mean or
located close to it; a large standard deviation indicates the opposite. The level of
each item was determined by the following formula: (highest point in Likert
scale-lowest point in Likert scale)/the number of the levels used ⫽ (5 ⫺ 1)/3 ⫽ 1.33,
where 1-2.33 reflected “low”, 2.34-3.67 reflected “moderate” and 3.68-5 reflected
“high”. Then, the items were being ordered based on their means. Tables III and IV
show the results.
As presented in Table III, data analysis results have shown that KM processes
are applied to a great extent in the Jordanian consultancy sector in which the mean
score is 3.78. This indicates an indicator of the importance of KM processes, and
such high level of presentation denotes a positive attitude regarding the processes of
KM. However, KM approaches and innovation are found to be moderate. This
advocates that Jordanian consultancy firms are currently engaging in KM activities
and focus on innovation to maintain competitive advantages. Table IV
demonstrates the mean scores for KM processes, approaches and innovation
items.
MRR Type of variable Mean SD Level Order
39,10
Independent variables
KM processes 3.78 0.77 High
Knowledge acquisition 3.83 0.77 High 2
Knowledge sharing 3.95 0.86 High 1
1226 Knowledge utilization 3.56 0.96 Moderate 3
KM approaches 3.20 0.54 Moderate
Social network 2.55 0.79 Moderate 3
Codification 3.51 0.77 Moderate 2
Table III. Personalization 3.55 0.83 Moderate 1
Overall mean and
standard deviation of Dependent variable
the study’s variables Innovation 3.66 0.93 Moderate

4.4 Hypotheses testing results

The current research is mainly seeking to investigate the impact of KM processes
(knowledge acquisition, sharing and utilization) and KM approaches (social network,
codification and personalization) on innovation in Jordanian consulting firms.
Therefore, to test the hypotheses developed for this study, the multiple regression
technique was used. Further, the level of significance (␣-level) was chosen to be 0.05 and
the probability value (p-value) obtained from the statistical hypotheses test is
considered to be the decision rule for rejecting the null hypotheses (Creswell, 2009). If the
p-value is less than or equal to the ␣ level, the null hypothesis will be rejected and the
alternative hypothesis will be supported. However, if the p-value is greater than the ␣
level, the null hypothesis cannot be rejected and the alternative hypothesis will not be
supported. In addition, normality of the independent variables and the absence of
multicolinearity problem (a case of multiple regression in which the independent
variables are themselves highly correlated) were checked. According to Pallant (2005),
most of the values should be inside the adequate ranges for normality (i.e. ⫺1.0 to ⫹1.0).
For this purpose, skewness and variance inflation factor (VIF) were investigated;
Table V includes the results.
As can be figured out from Table V, the skewness values were within the normal
values (⫺1.0 to ⫹1.0), suggesting that the data of the independent variables is
normal. The VIF values were less than the critical value (10) which is most common
among most studies, suggesting no multicolinearity problem among the
independent variables.
4.4.1 Hypothesis 1. The results of testing H1 are demonstrated in Table VI.
Table VI indicates that there is a positive correlation between KM processes and
innovation in Jordanian consultancy firms (r ⫽ 0.829), which means that the
independent variables and dependent variable change in the same direction. The value
of R2 reflects the proportion of variation in innovation variable that could be referred to
(or explained) by the three processes of KM. This is to say that 68.8 per cent of the
variability of innovation has been explained by the variables of KM processes. F-ratio
for the data was 155.48, which is significant at p ⬍ 0.05 (sig ⫽ 0.000). Therefore, there
was a statistically significant impact of KM processes on innovation, and thus the
alternative hypothesis is accepted. Specifically, the t value for knowledge acquisition
was (3.56) with a level of significance of (0.000), (4.64) with a level of significance of
Item Mean SD Level Order
Impact of
knowledge
Knowledge acquisition management
We hire new employees as a source for
acquiring new knowledge 3.19 1.14 Moderate 6
We provide an open environment to help our
employees acquire new knowledge 3.89 1.05 High 4
We actively observe and adopt the best practice
1227
in our sector 4.06 0.91 High 2
We continually gather information that is
relevant to our operations and activities 4.10 0.91 High 1
We clearly list and define the knowledge we
possess as well as any unavailable knowledge 3.72 0.97 High 5
Knowledge is obtained from different sources:
customers, partners and employees 4.02 0.96 High 3
Knowledge sharing
We share information and knowledge
necessary for the tasks 4.09 0.95 High 1
We exchange knowledge between employees to
achieve our goals with little time and effort 4.00 0.98 High 2
We developed information systems, like
intranet and electronic bulletin boards (EBB), to
share information and knowledge 3.90 1.19 High 4
We promote sharing of information and
knowledge between team members and the
various units 3.82 1.00 High 5
Knowledge is shared between supervisors and
subordinates 3.92 1.01 High 3
Knowledge utilization
There are incentive and benefit policies for new
idea suggestions in utilizing existing
knowledge 2.98 1.34 Moderate 5
Work flow diagrams are required and used in
performing tasks 3.31 1.31 Moderate 4
The firm effectively manages different sources
and types of knowledge 3.78 1.01 High 3
The firm utilizes available knowledge in
improving services provided to its customers 3.88 1.00 High 1
The firm applies available knowledge to
improve its performance 3.85 1.04 High 2
Social network
Capturing knowledge depends only on informal
relations within team members 3.15 1.15 Moderate 2
Knowledge is limited in reach as you have to
contact the knowledge provider directly 2.63 1.21 Moderate 3 Table IV.
The source of knowledge is only the memory of Mean and standard
present employees 1.81 1.14 Low 6 deviation of the
(continued) study’s variables
MRR Item Mean SD Level Order
39,10
Knowledge is dependent upon directly
contacting the knowledge provider and his/her
responsiveness 2.50 1.19 Moderate 4
Knowledge is not protected from wearing down
1228 or away 1.89 1.21 Low 5
To ensure better knowledge acquisition and
sharing, we need to develop social communities 3.35 1.19 Moderate 1
Codification
We provide similar basic consulting services
for all our customers 3.74 1.11 High 2
In providing new consulting services, we
depend on previous advices and solutions
provided for former customers 3.40 1.09 Moderate 4
We aim to provide all our customers with
similar services, but with competitive prices 3.37 1.04 Moderate 5
The firm stores its knowledge in the form of
reports and documents, so it is easily accessed
and reused 4.16 0.84 High 1
Employees are rewarded for using and
contributing to databases 2.92 1.27 Moderate 6
The firm uses databases to store and distribute
best practices among employees to use them to
effectively perform their tasks 3.47 1.25 Moderate 3
Personalization
We provide creative, rigorous and highly
customized services 3.55 1.13 Moderate 4
Every problem has a high chance of being a
“one-off” and unique problem that requires
customized consulting services and solutions 3.44 1.09 Moderate 5
Highly creative solutions are often called for
when providing each consulting service 3.58 0.96 Moderate 3
We focus on competition through providing
distinctive and customized services 3.87 0.87 High 2
The firm depends primarily on information
technologies (such as electronic messages,
teleconferencing and chatting) to facilitate
communication among employees to exchange
tacit knowledge 3.99 1.09 High 1
Employees are rewarded for directly sharing
knowledge with their colleagues and for
assisting colleagues in other locations/offices
with their problems 2.85 1.37 Moderate 6
Table IV. (continued)
 Mean SD Level Order
Impact of
knowledge
Innovation management
Our firm responds to environmental changes
flexibly 3.92 0.95 High 1
The firm incorporates technologies into new
products/services 3.82 1.06 High 4
We adapt existing product/service to meet
1229
specific customer requirements 3.85 1.10 High 2
We are one of the first to market with
innovating new products/services 3.41 1.24 Moderate 7
We take existing services and turn them into
better and more effective ones 3.84 1.08 High 3
We are perceived by our customers to be more
innovative than our competitors 3.79 1.08 High 5
We introduce innovation as a fundamental part
of our company’s vision and goals 3.66 1.17 Moderate 6
Innovation is effectively communicated among
employees and highly encouraged through
incentives 3.26 1.35 Moderate 9
Our top management is fully committed to
support innovation activities and programs 3.39 1.37 Moderate 8 Table IV.

Variables Skewness VIF

Knowledge acquisition ⫺0.66 2.47

Knowledge sharing ⫺1.00 2.41
Knowledge utilization ⫺0.41 2.96 Table V.
Social network 0.73 1.05 Skewness and VIF
Codification ⫺0.36 1.70 for the independent
Personalization ⫺0.30 2.67 variables

Variable r R2 F Significance (f) b t Significance (t)

Acquisition 0.829 0.688 155.48 0.000a 0.255 3.56 0.000

Sharing 0.281 4.64 0.000
Utilization 0.435 7.83 0.000
Table VI.
Notes: a Predictors: (constant), knowledge acquisition, sharing and utilization; b
dependent variable: Result for the study
innovation modelb

(0.000) for knowledge sharing, and a value of (7.83) with a level of significance of (0.000)
for knowledge utilization. Also, the value of ␤ was 0.255, 0.281, and 0.435, respectively,
indicating that knowledge utilization is the strongest predictor for innovation at the
studied Jordanian consultancy firms, followed by knowledge sharing and knowledge
acquisition.
MRR 4.4.2 Hypothesis 2. The results of testing H2 are demonstrated in Table VII.
39,10 Table VII shows that there is a positive correlation between KM approaches and
innovation in Jordanian consultancy firms (r ⫽ 0.885). R2 ⫽ 0.783, indicating that 78.3
per cent of the variability of innovation has been explained by the variables of KM
approaches. F-ratio for the data was 254.71, which is significant at p ⬍ 0.05 (sig ⫽ 0.000).
Therefore, there was a statistically significant impact of KM approaches on innovation,
1230 and thus the alternative hypothesis is accepted. In particular, the t value for social
network was (⫺4.32) with a level of significance of (0.000), (2.68) with a level of
significance of (0.008) for codification and a value of (20.47) with a level of significance of
(0.000) for personalization. The negative sign in the t value of social network indicates
that this approach causes innovation to decrease its value. The amount of decrease is
expressed by the ␤ coefficients (0.162); this means an increase in innovation by one unit
is related to a decrease of 0.162 in social network.

5. Discussion and conclusions

The aim of the current study was to explore the impact of KM processes (knowledge
acquisition, knowledge sharing and knowledge utilization) and KM approaches (social
network, codification and personalization) on innovation in Jordanian consulting firms.
Starting with KM processes, the results showed that the three processes have a positive
significant impact on innovation. This result is consistent with Plessis (2007), who
showed that knowledge creation or acquisition, knowledge sharing and knowledge
leverage or utilization build employees’ skills that are relevant to the process of
innovation. Plessis (2007) also showed that facilitating collaboration between employees
and sectors will enhance the knowledge sharing and utilization, which will, in turn,
increase innovation.
Knowledge acquisition’s effect on innovation was demonstrated by the continuous
internally and externally gathering of information and knowledge (explicit and implicit)
that is relevant to the company’s operations. This has also been supported by Plessis’s
results such as gathering of information and knowledge from an effective source for
re-combining this knowledge to come up with new and innovative ideas. In addition,
Lopez and Esteves (2013) showed that improving the organizations’ internal and
external networks acts as an enabler of knowledge acquisition that would be used to
promote innovation within the organization. Their results showed that having
employees with good expertise within the company was a better source for acquiring
knowledge than hiring new employees for that purpose. The experience of existing
employees with the company’s processes, types of consulting cases and the way the
things are handled can contribute to creating innovation opportunities within a
company more than hiring a new employee who is unfamiliar with the company’s

Variable r R2 F Significance (f) b t Significance (t)

Social network 0.885 0.783 254.71 0.000a ⫺0.162 ⫺4.32 0.000

Codification 0.127 2.68 0.008
Personalization 0.898 20.47 0.000
Table VII.
Result for the Notes: a Predictors: (Constant), social network, codification and personalization; b
dependent
study modelb variable: innovation
environment and its consulting processes. However, hiring new employees for acquiring Impact of
new knowledge has undoubtedly a fruitful benefit for innovation, as new employees knowledge
might bring new ways of thinking and can stimulate the creation of new ideas that will
encourage innovation, so firms can benefit from these newly hired, at some point (Lopez
management
and Esteves, 2013).
Based on the previous studies and the current research respondents’ point of view,
knowledge sharing plays an important role in innovation. This research showed that 1231
knowledge sharing was ranked the first of these processes with the highest mean (3.95).
This finding is consistent with what has been evidenced in the literature. Azzam (2010)
showed that the knowledge dissemination or sharing affects innovation the most.
Mas-Machuca and Costa (2012) supported these results by showing that encouraging
knowledge sharing between employees and incorporating KM into strategies will lead
to gaining competitive advantage, customer focus and innovation. The reason why
knowledge sharing was seen as the most-applied process in consultancies might be
attributed to the advantages that consultants gain from the mutual sharing of
knowledge, as it can reduce the time needed for each case, enhance brainstorming,
contribute to bringing out new ideas and benefit of others’ experiences. Furthermore, by
applying knowledge sharing, companies can protect themselves from the risks
associated to the unexpected leaving of their well-experienced and most knowledgeable
parties who might open his/her own consulting company or join a competitor (Taminiau
et al., 2009). On the other hand, the main limitation to knowledge sharing can be the fear
of losing control, as the consultant’s power is his/her knowledge; therefore, sharing this
knowledge with others will decrease the level of his/her power, that is why consultants
are unwilling to share a huge amount of their knowledge.
Knowledge utilization is concerned with applying the existing knowledge. The
respondents showed that they seek to fully utilize the available knowledge in improving
their consulting services. However, providing incentives for suggesting any new idea
that is related to utilizing the existing knowledge did not get a high mean, because
consultants are more concerned with real improvements and applicable solutions rather
than suggestions. Some respondents commented on this question that if a consultant
solves a case by applying available knowledge in a new creative way and the solution
worked out properly, incentives may take place; otherwise they do not apply.
Knowledge utilization is important for consultancies as they can put knowledge in
process.
According to the current study, KM approaches (social network, codification and
personalization) also affect innovation; and R2 ⫽ 0.78.3, which means that 78.3 per cent
of the variation in innovation, can be explained by these three approaches. The results
showed that the highest impact on innovation resulted from the personalization
approach, which is a formal way of social network by which employees exchange their
knowledge and experience directly with the most knowledgeable ones.
Powell and Ambrosini (2012) also showed the importance of personalization in
innovation. Their results indicated that personalization allows generating new ideas
and improving the quality provided to the clients. It also helps in identifying the most
knowledgeable colleagues quickly, getting over limited access and misappropriation
that are caused by social network. Taminiau et al. (2009) showed that direct knowledge
sharing through the personalization approach can lead to generating more creative
ideas and more innovation. The current study found that consulting firms depend on
MRR information technologies to exchange tacit knowledge has the highest mean from the
39,10 personalization measurement items. This result was also supported by Plessis (2007)
who showed that using technologies to facilitate communication, interaction and flow of
knowledge between different parties will increase and enhance innovation. The role of
personalization approach in innovation is also clear and proved by the linkage between
KM approaches and Porter’s generic strategies (as seen in the literature review part), as
1232 linking personalization with differentiation supports the linkage between
personalization and innovation. As both differentiation and personalization seek to
improve quality, provide customized services and increase the uniqueness that depends
on tacit knowledge and sharing this knowledge, they will both increase innovation.
Previous results showed that the codification approach does not increase innovation,
as it is only a recycling of knowledge and standardization of the processes (Swan and
Newell, 2000). Taminiau et al. (2009) showed that the codification approach has pitfalls
such as information overload, work overload and the way a specific case is generalized
to a more general level that others can learn from. All of these obstacles limit innovation.
The current study showed a high mean for firms that store their knowledge in forms and
reports, so it is easily accessed and reused. This reflects the main purpose and benefit of
using codification that are to facilitate access and reach standard and documented
information rather than to facilitate and generate new ideas. Taminiau et al. (2009) also
showed that the amount of codification depends on the institutional settings in which
the consultancy firm operates. For example, firms specializing in law rely more on
codifying their knowledge base than management consulting firms. This result was also
observed while taking an overview on how the processes go in Jordanian consultancies.
Incentives and rewards for both sharing ideas directly through the personalization
approach or the codification of knowledge in databases, documents and reports got the
lowest mean in the current research results, reflecting that rewards and incentives are
not major items for innovation in Jordanian consultancies. This was also supported by
Taminiau et al. (2009) and Yadav et al. (2016) who explained that the incentive and
reward system is not linked to knowledge-sharing activities and does not stimulate
innovation. On the other hand, social networks showed a negative effect on innovation
in the current research, which can be explained by the pitfalls of this approach, which
include limited access to only people already known by the consultant, regardless of
their knowledge level and their appropriateness to the knowledge that the consultant is
asking for; and this was supported by Powell and Ambrosini (2012).
The consulting services sector is an important sector that has a good possibility to
grow and expand; however, it needs more specialized and detailed research studies to be
conducted to improve it and increase its maturity in the Jordanian market, covering
more firms form the population, in addition to including elements that reflect customer’s
point of view. KM with its different disciplines, including its processes, approaches,
practices, tools and systems, is a rich field to explore and study to get the most benefits
from it. Its main steps are considered as important variables that need to be clearly
defined and understood in the Jordanian consulting sector where most of its companies
embed these operations within their processes without putting a clear definition for each
of them. Therefore, setting these steps clear will help in making many improvements.
On other hand, the use of KM approaches relates to the nature of the consulting services
provided. Companies can take advantage of the best benefits of each approach by using
codification in standard cases and using personalization where innovation is needed. In
addition, a clear classification of consulting services needs to take place to have the Impact of
effect of KM processes and approaches on innovation in each type of consultancies knowledge
rather than merging different types within one firm. Also, it is recommended to use
different measurement methods, although survey questionnaire has a major advantage
management
of being able to thoroughly address the subject of analysis, its major disadvantage
appears in being affected by the subjectivity of the person who completes it. So, the use
of multiple methods will help in reducing such subjectivity. 1233
5.1 Limitations and future directions
In conducting this study, multiple limitations were faced. The first limitation is related
to time and effort. According to the CCD (2012), the total number of consulting firms in
Jordan is 500 firms (at the point of conducting this research); therefore, the researchers
did not have the ability to distribute the study questionnaire to the whole population and
collect more responses. Furthermore, the usage of e-mail to facilitate gaining responses
was not effective, as most of these firms preferred to take their copies using the
drop-and-collect method. The second limitation was the poor responsiveness of a
number of firms due to privacy issues. Some firms refused to take copies of the
questionnaire even before reading it, although it included general questions that did not
affect the firms’ privacy. Other firms, however, allowed a specific number of copies to be
distributed to specific employees. To overcome these limitations, the researchers
selected a sample to represent the whole population to enhance the respondent’s trust
and ensure privacy; visits and quick interviews to explain the aim of the questionnaire
and the study were conducted; by-hand copies were distributed and collected for having
an overall background of consulting firms that have given copies of the questionnaire.
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antecedents and outcomes of knowledge sharing capability in Jordanian telecommunication
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pp. 2284-2296.
Massingham, P. (2014), “An evaluation of knowledge management tools Part 1: managing
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About the authors

Dr Bader Yousef Obeidat is an Assistant Professor of Information Systems and Information
Technology at the University of Jordan. His research interests include but are not limited to
MRR electronic commerce, internet banking, information systems, electronic markets and auctions. Dr
Obeidat has published more than 30 papers in information systems and business.
39,10 Miss Mai Maher Al-Suradi holds a master’s degree in management information systems from
the University of Jordan. Her research interests include but are not limited to knowledge sharing,
technology adoption and IT-business strategic alignment.
Dr Ra’ed Mas’deh is an Associate Professor of Management Information Systems at the
University of Jordan. His work focuses on IT-business strategic alignment, strategic use of
1238 technology in the public sectors, knowledge management capabilities, sustainable innovation and
IT-based competitive advantage, quantitative methods and structural equation modeling.
Dr Ali Tarhini is an Assistant Professor at the College of Economics and Political Science,
Information Systems Department, Sultan Qaboos University. He holds a PhD in Information
Systems from Brunel University London, UK, and MSc in E-commerce from University of Essex,
UK. His research interests include knowledge management, social media, ICT in information
systems (technology adoption and diffusion), cross-cultural issues in IS (at individual and national
culture, cross-cultural studies). Ali has published more than 45 articles in leading academic
journals including Computers in Human Behavior, Information Technology & People,
Information Systems Management, Journal of Enterprise Information Management, Journal of
Management Development, Management Research Review, British Journal of Educational
Technology, Interactive Learning Environments. Ali Tarhini is the corresponding author and can
be contacted at: ali.tarhini@hotmail.co.uk

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