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An Examination and Critique of the Use of Knowledge Management in

Achieving Competitive Advantage in Business and Its Existence in The Middle
East Airline Industry: A Case Study of...

Conference Paper · December 2021

DOI: 10.1109/KNOTH54462.2021.9686336

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 An Examination and Critique of the Use of
Knowledge Management in Achieving Competitive
Advantage in Business and Its Existence in The
Middle East Airline Industry: A Case Study of Saudi
Airline
Waqas Ahmed Khan Afridi
Faculty of Science and
Engineering Macquarie University
Sydney, Australia
waqas.afridi@hdr.mq.edu.au
Abstract— The purpose of the study is to closely analyze
and understand the significance of knowledge management for
business firms in achieving and sustaining competitive
advantage. The paper has critical analysis on knowledge
management and its taxonomies like; tacit and explicit
knowledge and their wide applicability in businesses to achieve
and sustain the competitive advantage. Moreover, in the paper
different theoretical models and frameworks have been briefly
reviewed. The focus of the paper is towards Middle East airline
industry to closely evaluate the strategic knowledge
management implications in the region. Saudi Airline is used
as a case study company for insight analysis and to develop
better understanding how the company is using knowledge
management in their day-to-day operations for improving
customer experience and to gain competitive advantage. Lastly,
the discussion section presents insight analysis and varied
suggestions for businesses to follow the same SKM initiatives.
Whereby, the understanding from the study is reflected in the
conclusion.
Keywords— Knowledge Management, Tacit knowledge,
Explicit knowledge, Competitive advantage, Models,
Frameworks, Airline Industry, Middle East, Saudi Airline
I. INTRODUCTION
In today’s digital economy, the business environment
has been immensely competitive as well as transformative.
The organizations of relative market are competing with each
other by exploiting best possible resources to attain the
status of industry leader. Some of the new competitive
challenges that organizations compete against each other
are; economic globalization, use of information technology,
diffusion of innovation and the use of knowledge [1].
Likewise, knowledge has been considered as a significant
transformation source of success for organizations as it
creates new skills and opportunities and protects the firm
from its competitors from gaining the same knowledge [2],
[3].
Knowledge management practices typically sets the
working direction within the organization [4]. The effective
use of Knowledge management in businesses is based on the
concept that knowledge exists in the minds of its employees
which can be organized into groups or departments to
disseminate more knowledge through processes,
management models, methodologies and projects [5].
However, business firms in present trade scenario due to
remarkable use of digital technology are focusing to
reestablish their business strategies, because for market
competency innovation always plays a key role. Whereby,
organizations interpret useful information as knowledge into
their creative decision making.
It should be noted that, knowledge is typically derived from
the interpreted information of data that needs to be formally
structured in manuals, schematics, tables and other forms
[6].
Managing knowledge-based resources is vital for a
business in achieving and sustaining competitive advantage,
where knowledge within is not integral for a specific set of
employees or a team that embarked on it, besides it should
be equally shared among teams and departments [7].
Consequently, due to this collaboration and knowledge
exchange, employees altogether will be able to own and
execute the knowledge within the organization that results in
improved teamwork, innovation and seeking creative
solutions as well as decrease in learning gap, causing
efficient business environment with increased productivity
[8].
The paper is focused towards implementation of
Knowledge Management in airline industry particularly of
Middle East region, where it closely examines how
effectively the knowledge management strategies are being
utilized in the Middle East airline industry. Saudi Airline has
been selected as a case study company to analyze different
aspects of KM practices in business, that includes; internal
communication, strategic planning, business operations,
improving customer experience and more. However, the
Middle East airline industry specially giants like; Emirates,
Qatar and Etihad Airways have shown their market
dominancy over the past decades by capturing attention of
governments, media and consumers [9]. But, the industry
overall is still behind in successful execution of KM
strategies, as many airlines face various organizational issues
when striving to gain sustainable competitive advantage by
utilizing strategic knowledge resources [10]. Thus, the paper
attempts to investigate the issues that organizations face in
this regard with the help of a case study of Saudi Airlines.
II. LITERATURE REVIEW
A. Understanding Knowledge and Knowledge
Management
Knowledge is typically defined as a “justified personal
belief” [11, p. 3]. However, in business world, knowledge is
used as a key source for growing businesses on the basis of
innovation [12]. Knowledge is derived from information
which is generally stored in the form of databases.
Knowledge as a whole is a combination of meaningful
interpretations and reflections that are derived through
observations and personal experiences [13]. Moreover,
knowledge is essential for business firms as it provides
clarity in operations and functional activities. In
addition, KM
XXX-X-XXXX-XXXX-X/XX/$XX.00 ©20XX IEEE
frameworks also help business firms to systematically
obtain and share tacit and explicit knowledge among
employees [14]. It helps in transforming knowledge from
individuals to the whole organization.
On the contrary, there are some contradictions made by
researchers that criticize the false association of knowledge
management with business success. They consider
knowledge management as a hype that creates more
confusion within organizations rather helping to achieve set
objectives [15]. In other words, the efforts made in
managing knowledge to attain competitive advantage are
limited that degrade with time and become a mere
information for businesses [16]. Besides, several researchers
have come up with studies to prove that Knowledge
Management helps firms to be innovative [17]. Whereas,
KM is basically the planning, organizing or controlling of
process activities and employees within the organization to
ensure that knowledge related assets are effectively utilized.
In addition to creating new knowledge, KM strategies
allow businesses to maintain and utilize old knowledge in
order to handle impending market uncertainties [18].
Through KM system, organizations can increase and
achieve their economic objectives by using intellectual
capital to provide products and services according to market
requirements. There are various taxonomies that discuss
different types of knowledge, where the most distinctive
fundamental types are ‘tacit’ and ‘explicit’ knowledge [19].
B. Examining Tacit and Explicit Knowledge
Tacit knowledge represents natural abilities, personal
expertise as well as conceptual thinking. Such knowledge is
difficult to transfer or visualize because it generally occurs
in person’s mind and can only be interpreted by the actions
[20]. Most of the knowledge are initially tacit in nature and
take long time to develop and get utilized. On the other
hand, Explicit knowledge can be captured in the form of
documents, organized data, programs etc. as it is easier to
disseminate, articulate or codify that allow others to access.
It is generally represented through books, internet or other
visual means and is termed as the “knowledge of
rationality” [21], [22].
Tacit knowledge enables businesses to gain competitive
advantage when internal functional units share
unquantifiable information among each other [23].
However, to promote the use of tacit knowledge, managers
should look to create more connections and cross-functional
collaborations [24]. On the contrary, poor understanding and
identification of tacit knowledge becomes the reason for
failure of most projects or ventures. Because the client had
not expressed their requirements clearly, so the company
could never knew the demands that were existed in
customer’s mind, so eventually the final product could not
meet the client’s expectations [25]. In contrast, business firms
like; McKinsey & Company and Bain & Company utilize
people-to-people process to personalize the tacit knowledge
where they promote and reward individuals who owns the
process of knowledge creation and management [26].
Ultimately, as more projects and ventures shift to fast-paced
environments, where programs are provided with limited
documentation, perceiving the client’s tacit knowledge will
work as a vital source for business organizations.
For organizations, knowledge-based thinking is
considered as the most crucial strategic resource, as it guides
towards competitive advantages. In current business
environment, new knowledge has a greater value that
produces creativity and innovation and leads towards
success [27]. Explicit knowledge once it is codified, the
assets can then be utilized to solve various other problems of
similar nature or can be reused to connect people through
valuable knowledge. This process of knowledge sharing
generally require investments for monitoring infrastructure
and funds to support IT technology [28].
One of the world’s top (34.8 billion USD) accounting
firm “Ernst & Young” are utilizing global brains of explicit
knowledge to reflect differences in culture among
employees [29]. The company’s global practices involve
sharing and documenting knowledge [30]. Similarly,
another world’s famous (41.6 billion USD) global
management consultancy firm “Accenture” has developed
their own ways to store, codify and reuse the explicit
knowledge [31]. Their “people- to-document” process takes
the information from its developer and transforms it as
independent [32]. The information sensitive for clients is
removed while desired information can be reused and
eventually proven as a successful solution applicable for the
similar industry.
C. Knowledge Management and Competitive Advantage
In the 21st century, Knowledge Management for
organizations plays an important part in achieving long-term
success and competitive advantage [33]. Using knowledge
management, organizations can create their own values and
business strategies. Knowledge is recognized as the most
significant asset for an organization, infact, it worth more
than other traditional assets like capital, labor and land
because it perceives intangible benefits as well as improves
the overall work performance without being diminish [34].
As a matter of fact, competition among businesses typically
relies on the basis of knowledge managment. Maintaining
more advanced knowledge will manifest the business from
competitors [35]. Correspondingly, many studies have
revealed the significance of knowledge management within
the organizations in achieving competitive advantages.
Ultimately, businesses are no longer competing for their
capital value, besides knowledge has surfaced as a new
competitive advantage to lead in the market [36]. One of the
pioneers in management consulting services, Peter Drucker,
said “knowledge is the only meaningful economic
resource”[37, p. 2]. Thus, business firms should look to
speed up their new knowledge seeking ability because the
effective implementation of KM strategies within an
organization can be challenging, as the developments in this
regard is improving rapidly and consistently [38].
D. Strategic Knowledge Management and Middle East
Airline Industry
The Middle East (ME) region is strategically located
between East and West, thereby allowing regional airlines to
operate as a perfect option for long haul travel destinations
[9]. ME countries include; Saudi Arabia, UAE, Qatar,
Bahrain, Oman, Kuwait and few other. Due to the limited air
flight fuel capacity of early aircrafts, ME countries have
become a demanding stopover point between Asia and
Europe, so their airports mainly work as a connecting hub
for regional airlines [39]. Many of the legacy airlines like;
Saudi
Airline, Turkish Airline, Gulf Air and few others have
established in the midst of 20th century that still operates to
date. However, liberalization has allowed new airlines like;
Emirates, Qatar and Etihad Airways to dominate in the
region and put a threat to global operators [40]. These
emerging ME airlines have adopted the low-cost business
model to penetrate the already established airline market.
Moreover, the ME airline industry also enjoys favorable tax
and labor conditions than European airlines, which allowed
ME airlines to offer lower fares and capture more market
share [41].
KM strategies were first originated in western airline
industry, but now has gathered interest and realization
towards the Middle East airline industry as well [9].
Nowadays, in Middle East, most of the airlines have seen to
be investing more in knowledge management practices, as it
is known to be a very useful resource for bringing financial
rewards [42]. Practicing KM is all about formulating and
guiding the process activities to actively communicate the
useful knowledge to the right people at the right time and
deriving ways for its wide implementation to improve
organizational performance [43]. Despite 9/11, two Gulf
wars and escalating fuel costs, Middle East airline industry
specially the emerging carriers have enjoyed a significant
growth rate and market share since their emergence and
have not faced a loss in recent decades. The reason being the
timely and appropriate implementation of KM strategies in
their business processes [44]. However, there is a mixed
perception of practicing KM strategies for various other
Middle East airlines as they still lack experience in
managing and utilizing knowledge resources effectively.
Thereby, except for the few top Middle East airlines, many
other regional airlines have not utilized Knowledge
Management practices for establishing strategic alliance and
strengthening relationship with external partners [43].
E. Brief Review of Models and Frameworks
The review of literature so far have presented clear
definitions, critical analysis and detailed understanding of
knowledge management and its involvement in attaining
success for businesses. This section will briefly highlight the
existence and significance of different models and
frameworks which are required for the implementation of
KM in business organizations.
Various researchers have reviewed different KM models
that varies in perspectives and are generally classified into
four categories i.e. descriptive, broad, detailed and analytic
[45]. Boisot (1987) suggested a “Knowledge Category
Model” in which knowledge can be codified or uncodified
within an organization and the flow of knowledge is
considered as mechanistic [46]. Nonaka and Takeuchi
(1995) presented a “Knowledge Conversion Model” which
discusses tacit and explicit information transfer scenarios
that promotes innovation and organizational learning [47].
A Swedish firm “Skandia” in 1997, developed an
“Intellectual Capital Model” that puts strong emphasis on
controlling elements like; human, customer and structure.
The model suggests IC elements as vital assets for
organization and should be managed efficiently [48]. Wiig
(1993) proposed “Degrees of Internalization Model” that
explains different levels of knowledge internalization from
beginner to master where knowledge is based on facts and
concepts and is organized in the form of semantic network
[49]. Demerest
(1997) established a “KM Process Model” that assumes
knowledge can be constructed within the organization based
on social interactions and organizational learning processes
[50]. Choo (1998) proposed a “Sense-Making Model” for
managing knowledge and to create new senses for optimized
decision making based on elements. It defines how these
elements can be used during organizational actions through
decision making, sense creation and knowledge
management [51].
Over the years, different KM frameworks have been
assorted by various researchers, such as; “Intangible Assets
Framework” that highlights the combination of
organizational knowledge (e.g. skills, experience etc.),
internal structure (e.g. patents, models, concepts etc.) and
external structure (e.g. customer and supplier relationships).
The framework also encompasses company’s reputation
such as; brand names and trademarks [52]. Furthermore,
“The KM Cycle Framework” focuses on how knowledge
assets are utilized within the organization. It is a clockwork
framework that handles internal and external processes of
the organization [53]. Similarly, “The Knowledge Flow
Framework” deals with agent elements (individual and
collective) and knowledge artifacts (cognitive and physical).
The framework reveals the process of knowledge
transformation between agents to produce tacit, explicit and
implicit artifacts which are generally referred as knowledge
creation, retention and utilization [54].
III. RESEARCH METHODOLOGY
The methodology that has been used to complete this
research study is a secondary research method i.e. collecting
information from published journal articles, conference
proceedings, organizational reports, publications,
newsletters, company websites and related case studies.
However, to achieve the study objectives, a case study
approach has been adopted in this research. Whereby, the
selected case study company is “Saudi Airlines” to discuss
and analyze the Knowledge Management efforts within the
organization. Therefore, for critical analysis of the case
study company and to evaluate the role of Knowledge
Management, an intensive academic research was carried
out throughout the research process.
A. Case Study: Saudi Airlines Transforming towards
SKM
The reason to choose ‘Saudi Airlines’ as a case study is
because the airline has recently turned direction towards
liberalization and is on the verge of business expansion to
compete with regional industry rivals like; Emirates, Qatar
and Etihad airways [55], [56]. The airline has number of
subsidiaries and branch offices located all over Saudi Arabia
that possess around 44,000 employees working on technical
and managerial positions. Despite the good business
reputation in the region, the company still facing continuous
challenges to practice KM strategies at the organizational
level due to no standard platforms. Therefore, the
organization has been going through a major transformation
initiative that aims to improve its operational capability and
to achieve economic goals by 2020 [57].
B. Company Background
Saudi Airline is a government owned organization that
was established by the Ministry of Defense in 1946. The
 airline serves over 95 local and international destinations
including Middle East, Europe and other world regions with
a fleet size of 184 aircrafts [58]. The airline is headquartered
in Jeddah and possesses Nine subsidiaries and many branch
offices throughout the kingdom acquiring about 44,000
employees. Since its inception, up till the end of the first
decade of 21st century, the airline is regarded as the largest
in Middle East region considering; number of flights, seats
and passenger capacity as well as the fleet structure [9].
However, in recent times, the government of Saudi Arabia
has been actively making efforts for liberalization and to
modernize the company structure by taking strategic
initiatives that involves; overhauling of IT system,
improving in-flight passenger experience and remodeling
fleet aviation structure [59]. All such efforts were made not
only to achieve high market reputation but also to obtain
membership in the Middle East SkyTeam alliance.
IV. DISCUSSION AND SUGGESTIONS
The purpose of the study is to critically analyze and
synthesize the value of Knowledge and Knowledge
Management strategies required for business organizations
to sustain competitive advantage and stay ahead in the
market. The focus of the study is towards the airline
industry of Middle East. This section will discuss how
“Saudi Airline” has used knowledge management in their
internal and external business operations. For study purpose,
Saudi Airline will be termed as ‘SA’.
SA as a government owned airline, majority of its
employees are local and are prone to global customers
which creates an impending challenge for the company to
sustain continuous knowledge management practices in
their day-to- day operations [60]. To overcome, SA has
initiated a transformation program to enhance its operational
excellence and achieve the strategic objectives.
On the contrary, SA as a second largest revenue
generating company in Middle East region acquires a large
organizational structure that has good understanding of
knowledge management but at the same time it lacks in
effective implementation of strategies at multiple levels.
One of the main initiatives of the company’s transformation
program is the establishment of project management office
(PMO) based on knowledge creation which is used and
supported by industry stakeholders for strategic decision
making and monitoring progress [61]. This initiative has
improved the perception of knowledge among employees and
the top management as it contributes significantly in setting
strategies and achieving project objectives.
In addition, SA has recently implemented various
tools and applications for practicing knowledge
management at organizational level to achieve project
relevant objectives, but eventually could not fully address
the prioritized goals due to lack of internal cross-functional
capabilities [43]. Similarly, SA also faced hard times in
executing knowledge management in their cross-functional
operational activities, while, the storing and retrieving of
such process activities can be effectively utilized for
communicating the knowledge to newly hired employees
and minimize the knowledge gap.
In 2007, the company has implemented an effective
business collaboration tool which is used as a web-based
intranet portal of “Microsoft SharePoint” provided by
Microsoft Consulting Services for storing and sharing cross-
departmental information such as project objectives,
company vision, regulations and more. The intranet portal is
also used in day-to-day process activities, such as; printing
and sharing documents locally, downloading statistical
reports, cash flow charts etc. and is accessed through local
network file explorer, which is updated timely by the
department planners to keep the managers and directors
informed with the department progress and employee
performance. During the implementation process throughout
the project, SA IT department has observed significant
knowledge transfer in the form of close collaboration and
sharing of technical expertise between the two parties [62].
On top of that, SA has recently adopted a
prominent and a very effective knowledge management tool
called “Tawasol”, a Microsoft Yammer enterprise local
social networking platform, where SA employees can
communicate with each other from anywhere in the world.
The access to local social network is based on company
domain email addresses so that only SA employees are able
to join. The introduction of “Tawasol” has allowed the
company staff like; cabin crew, boarding team members and
others to directly communicate with engineers, flight
attendants and pilots to share their experiences, expertise
and active problems. Besides, Microsoft Yammer also
provides various knowledge management features, such as;
profile viewing, group discussion activities, document
exchanging etc. Through the platform employees receives
useful information on company’s various involvements, such
as; ongoing project insights, crisis management practices,
policy changes, regulations, newspapers, discounted offers
for staff, skill development and talent programs, aviation
news and much more [63]. Eventually, the launch of a local
social network had shown tremendous results in serving
knowledge management within the organization . For
instance, SA sales department has recently launched an
internal campaign asking employees to provide their
suggestions in adding ancillary revenue items for the newly
added flight destination to Maldives. In response, many
employees have collaborated from different departments and
made interesting suggestions for the competition where one
employee with his outstanding idea got the prize. Another
instance is where employee can post on social platform ask
his colleagues about the work issue, learn from the provided
advise and get it done.
In the end, it is important to realize that SA despite
being one of the most preferred and promising airline in the
region has not implemented a comprehensive knowledge
management strategy, even though its core principles, values
and strategical actions are still clear and can be seen in their
corporate business plan [64]. However, to enhance the
effectiveness of the initiatives and to efficiently address the
cross-functional collaboration issues, SA should look to
carefully identify the knowledge gap, develop
implementation models and create new sources for
knowledge creation and sharing within the organization.
Therefore, it can be deduced that SA needs to be further
championed in prioritizing knowledge management
strategies to obtain its maximum support in business
operations, to surpass the existing dominant regional rivals
and to sustain competitive advantage in the Middle East
airline industry. Additionally, the highlighted insights in the
study about the SA business approach towards practicing
knowledge management presents a great example and a
guideline for other regional progressive industry players to
 follow the same business procedures and designed structure
in order to survive and compete in the industry. Following
the similar designed transformation initiatives by SA, other
airlines may also develop better ways and resources to
create new knowledge which can be used to achieve their
business economic objectives.
V. CONCLUSION
This paper presents a factual representation of strategic
knowledge management and its implications in the Middle
East airline industry. From the study we have concluded
that, by implementing knowledge management strategies
organizations are able to achieve and sustain competitive
advantage in the challenging business environment.
However, companies should always look for innovation to
better execute the new obtained knowledge. Moreover,
implementation of knowledge management in business
organizations promotes a culture of creating and sharing
new knowledge, while companies should develop better
ways for an effective implementation process. Besides,
knowledge management helps firms in reducing business
cost, creates productive business environments, allows
efficient and appropriate decision making and provides
faster solutions to uncertainties. Thus, every business
organization should start executing knowledge management
strategies in their business operations as it has now
established as the main source of achieving and sustaining
competitive advantage over other industry players.
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