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Knowledge management initiatives in

Indian public and private sector


organizations
Deepak Chawla and Himanshu Joshi

Abstract
Purpose There is no single way of achieving business success. The concept of knowledge
management (KM) builds on the existing management practices, integrating them into a philosophy for
improving performance. This paper aims to understand the various dimensions of KM and how they
differ in public and private sector organizations in India. It also attempts to identify the dimensions where
one sector is better than the other and areas needing improvement.
Deepak Chawla is
Professor and
Himanshu Joshi is Senior
Lecturer, both at the
International Management
Institute, New Delhi, India.

Design/methodology/approach The paper uses a sample comprising 16 private and public sector
organizations. A convenient sampling scheme was used. The extent of KM practices was evaluated with
respect to dimensions, namely process, leadership, technology, culture and measurement.
Findings The paper empirically shows that private sector organizations fare better statistically on all
dimensions compared to public sector organizations. Although the private sector is ahead of the public
sector on the raw mean scores of various dimensions, it has still a long way to go as the scores are below
four on a scale of five. The scores are just satisfactory and there is further scope for improvement.
Research limitations/implications The study uses a sample of four public sector organizations and
the findings may lack generalization. Therefore, it would be interesting to verify the findings using a
larger sample size.
Practical implications The paper can serve as a best practice document for public and private sector
organizations interested in adopting KM for improving performance.
Originality/value The paper tries to bring forth concern areas for KM in Indian public and private
sector organizations.
Keywords Knowledge management, Public sector organizations, Private sector organizations, India
Paper type Research paper

Introduction
In India, public sector organizations are those where more than 51 percent of equity in a
company rests with the central or state governments. The major objective of setting up
public enterprises was to facilitate economic growth through industrialization and
infrastructure development. It was envisioned that creation of such enterprises would
result in income redistribution, employment generation, promotion of small scale and
ancillary industries and balanced regional development. The private sector, on the other
hand, is run for private profit and not controlled by the state.
Received 21 May 2010
Accepted 21 May 2010
The paper is part of the
outcome of a research initiative
sanctioned by the Department
of Information Technology,
Ministry of Communications
and Information Technology;
Government of India, entitled
National competitiveness in
the knowledge economy to
four institutions, namely, IIT-M,
IIT-R, IMI and NPC.

DOI 10.1108/13673271011084871

Authors (Roste and Miles, 2005; Euske, 2003) argue that there are number of characteristics
that indicate differences between public and private sector. For instance, there seems to be
varying degree of executive control among the employees of these two sectors. Other
differences include organizing principles, structures, performance metrics, relationship with
end users, nature of employees, supply chain, sources of knowledge, ownership,
performance expectations, incentives, etc. In private sector organizations, the customer
exercises ultimate control over the organization and the sustainability depends on providing
better customer value than others. In public sector organizations, due to multiple levels of
control, efficiencies creep in. Where economic efficiency is core to the operations of private

VOL. 14 NO. 6 2010, pp. 811-827, Q Emerald Group Publishing Limited, ISSN 1367-3270

JOURNAL OF KNOWLEDGE MANAGEMENT

PAGE 811

sector the same may not be true for public sector. Public sector organizations focus on
enactment of public policies whereas profit, revenues and growth are the organizing
principles of private sector.
The way public sector organizations interact with their environment and stakeholders is
different from private sector companies. They are constrained in their choice of procedures
as they perform activities that are mandated by political forces. Public sector organizations
operate in an environment of control and greater external influence involving multiple
approval stages resulting in less autonomy over decision making. In public sector the driving
impetus is public policy whereas, in case of private sector its business performance and
results (McNabb, 2006).
Indian economy is a mixed economy where both public and private enterprises have played
an important role in its development. Since independence public sector has given a
momentum for industrialization and absorption of sophisticated technology. However, post
liberalization private enterprises were encouraged to play an important role to stimulate
growth in the economy. Areas that were previously controlled by the public sector, such as
heavy manufacturing, banking, civil aviation, telecommunications, power generation and
distribution, ports and roads were opened to the private sector. The impact of it is felt in the
declining contribution of the public sector in the countrys GDP.
As mentioned in the beginning of the paper, private enterprise runs for profits. Similarly KM is
aimed at enhancing efficiency, productivity etc. resulting in profitability. It is therefore natural
to expect that private sector would have gone a long way to adapt knowledge management
(KM) practices as compared with their public sector counterparts. The paper attempts to
compare the initiatives taken by the public and private enterprises in adapting KM practices
in India. This is discussed in the next part of the paper.

Literature survey
The concept of knowledge is not new and has been there for ages. There are various
definitions of knowledge that exist. According to Wikipedia, The Free Enclyopedia (2008),
knowledge is defined (Oxford English Dictionary) variously as:
B

expertise, and skills acquired by a person through experience or education; the


theoretical or practical understanding of a subject;

what is known in a particular field or in total; facts and information; or

awareness or familiarity gained by experience of a fact or situation.

The term knowledge is also used to mean the confident understanding of a subject with the
ability to use it for a specific purpose if appropriate. According to Davenport et al. (1998)
knowledge is information combined with experience, context, interpretation and reflection.
The concept of knowledge transfer derives from the field of innovation (Major and
Cordey-Hayes, 2000). Knowledge transfer is the conveyance of knowledge from one place,
person, ownership, etc to another. Any transfer must involve more than one party. There has
to be a source (the original holder of the knowledge) and a destination (where the knowledge
is transferred to). Generally when some is transferred one party loses and other gains. But,
knowledge being an intangible asset, it does not necessarily have to be given up by one
party to be gained by the other. Enterprises are realizing how important it is to know what
they know and be able to make maximum use of the knowledge. Both private and public
sector organizations have started appreciating the concept and the benefits it can derive for
the organization if implemented in a systematic manner.
The creation and transfer of knowledge has become a critical factor in an organizations
success and competitiveness. From this concept emerged the idea of KM, which ensures
that the right information is delivered to the right person just in time, in order to take the most
appropriate decision. The areas of applications and scope of KM have increased but the
underlying principles governing it remain the same. How we manage knowledge determines
the decisions we make and actions we take. Hence it makes sense to recognize and

PAGE 812 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 14 NO. 6 2010

understand the processes that affect our decision making and actions so that necessary
steps may be taken to improve the quality of these processes and in turn improve the quality
of the decisions and actions taken. Therefore, organizations are concentrating their efforts
towards improving knowledge transfer. According to Drucker (1995) knowledge has
become the key economic resource and the dominant, perhaps even the only, source of
competitive advantage. It has been observed that at the heart of an organizations strategy
process is a force, which has been termed as the knowledge force, which is powered by
the knowledge workers. It is this knowledge force that determines the growth strategy of the
firm and is reflected in terms of customers retained or gained, or new products/services
launched from time to time (Natarajan and Ganesh, 2008).
There is a broad range of thought on KM. Although the study of knowledge has its root in
antiquity, the field of knowledge management as a self conscious discipline is a recent
phenomenon. According to Drucker (1995) the collective knowledge residing in the minds of
its employees, customers, suppliers, etc., is the most vital resource of an organizations
growth, even more than the traditional factors of production i.e. land, labor and capital
(Grossman, 2006). KM involves the identification and analysis of available and required
knowledge, and the subsequent planning and control of actions to develop knowledge
assets so as to fulfill organizational objectives. According to Wiig (1999) KM is broad,
multi-dimensional and covers most aspects of the enterprise activities. Simply stated, the
objectives of KM are: to make the enterprise act as intelligently as possible to secure its
viability and overall success and realize the best value of its knowledge assets.
For efficient KM, it is imperative to have metrics in place to assess the state of
implementation. A number of models and toolkits have been developed by researchers to
assess the same. Rao (2005) considers five types of KM metrics necessary to estimate the
state, namely, technology, process, knowledge, employee and business. A tool developed
by the American Productivity and Quality Center (APQC) and Arthur Anderson focuses on
five KM dimensions: process, leadership, culture, technology, and measurement. Another
tool by Maier and Moseley (2003) assesses the implementation of KM in five dimensions:
identification and creation; collection and capture; storage and organization; sharing and
distribution; and application and use. Bukowitz and Williams (1999) have developed a
self-assessment tool known as Knowledge Management Diagnostic (KMD) to determine
how well the different aspects of the KM process have been realized in the company. The
questionnaire is divided into seven categories (get, use, learn, contribute, access,
build/sustain, divest).
Knowledge Audit (K-Audit) is another popular tool that focuses on evaluation of knowledge
required at certain point of time, the carriers of the knowledge, the connections between the
knowledge carriers and the need for additional connections. It also serves as an instrument
for uncovering weak points, for encouraging improvements and for controlling the existing
measures of KM. According to Liebowitz (2000), the knowledge audit is based upon the
belief that knowledge has to be seen as part of an organizations inventory. If problems occur
(e.g. a high turnover of personnel), a knowledge audit can provide an evaluation, looking at
the following aspects: what knowledge is needed; what knowledge exists and what
knowledge is lacking; and who needs this knowledge and how can it be made available.
Knowledge Management Maturity Model (KMMM) developed in the Competence Center
Knowledge Management of Siemens, AG (Langen, n.d.) comprises an analysis model and a
development model. The analysis model creates transparency in all key areas of KM and
thus demonstrates in concise form the potential for improvement. The development model
provides valuable information for reaching the next maturity level.
Indian organizations are not too far behind. Tata Steel Limited developed Knowledge
Manthan Index to measure the effectiveness of its initiative by capturing aspects like
involvement of people, sharing of ideas, quality of implementation etc. (Khanna et al., 2005).
Similarly Wipro Technologies Limited developed a KM engagement and effectiveness
(KMEE) index that gives the top management a clear view both at the organizational level as
well as at each of the business unit levels. The KMEE is calculated through a set of
parameters. For example, one of the parameters for engagement is the number of visitors to

VOL. 14 NO. 6 2010 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 813

a repository as a ratio of the total number of users. Similarly, one of the parameters for
effectiveness is the number of hours saved by reusing components as a ratio of total number
of hours spent on coding (Chatzkel, 2004).
Another Indian IT giant, Infosys Technologies Limited has created an internal metric known
as the Knowledge Maturity Model (KMM) for tracking its progression on KM initiatives. The
KMM is a series of steps and aspirations that Infosys would like to accomplish. According to
Mehta et al. (2007) and Garud and Kumaraswamy (2003) KMM incorporates various levels
to determine the state of KM implementation. The starting point is where the organization
does not have a KM system in place, followed by firms ability to be reactive, aware (data
driven decision making), convinced (ability to sense and respond proactively to changes in
technology and business environment) and ready to share (shape technology and business
environment). This KM framework encompasses business strategy, people, processes and
technology and follows a principle of incremental change and not forcing employees to use
the system (Suresh and Mahesh, 2008). Tata Consultancy Services Limited has developed a
Knowledge Management Maturity Model known as 5iKM3 to access and harness the
organizations ability to manage knowledge. According to Mohanty and Chand (2005) the
states of knowledge maturity can be achieved by systematically addressing the three pillars
of KM, i.e. people (people mindset and culture); process (process, policy and strategy) and
technology (technology and infrastructure).
Other Indian organizations like Patni Computer Systems Limited (Kapada, 2006) and Bharti
Cellular Limited (Hariharan, 2005) have made significant investment towards knowledge
driven exploration, exploitation and competency development. Today, India is among the
few Asian countries that have adopted a national KM roadmap or policy towards a
knowledge based economy. As a result, a number of knowledge intensive service
organizations in India have won the prestigious Most Admired Knowledge Enterprise
(MAKE) award (Talisayon, 2008).
A survey of KM practices in Indian manufacturing industries found that the main reasons why
these organizations are focusing on KM are gaining competitive advantage, creating new
knowledge and managing resources effectively. The competitive priorities for which Indian
organizations are using KM include quality, cost reduction, improved efficiency, improved
delivery, flexibility and innovation (Singh et al., 2006). Although companies acknowledge the
benefits of KM, very few actually implement it consistently due to existing barriers. A study
by Chadha and Kapoor (2010) on KM practices of small and medium auto component
manufacturing companies in Ludhiana city of India, found that the existing culture in
organizations did not encourage participation of employees with 53 percent of the
executives saying that knowledge sharing is not part of daily routine work.
KM practices in public and private sector companies differ due to the underlying differences
in goals and objectives, organizational environment and processes. A study by Cong and
Pandya (2003) suggests that public sector is behind the private sector in KM practices.
There is a lack of awareness of KM in the public sector. They have proposed important
issues and initial stages for the development of a conceptual KM framework for the public
sector which highlights the importance of building a trust while sharing knowledge,
establishment of reward and recognition system, development of leaders and issues relating
to processes and technology. Another study by Eskildsen et al. (2004) on Denmark mention
that private companies emphasized more on systems and dimensions whereas public
organization put higher emphasize on peoples dimension. Further, the importance assigned
by private enterprises is on leadership and policy and strategy as compared to the public
enterprises. They also state that most of the public organizations do not have the same
strategic freedom that private companies have. This is because many of the goals of the
public enterprises are decided by politicians, which in turn affects the availability of
resources to public organization in order to meet demand.
A study by Pillania (2005) covering Indian software, pharmaceutical and petroleum
industries found that KM strategy of Indian organizations is lacking more in the public sector
than the private sector. A very high majority of respondents (82 percent) from software

PAGE 814 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 14 NO. 6 2010

companies, which were primarily from private sector, had KM strategy in place. Only 55
percent respondents from petroleum companies, primarily from public sector felt the
presence of KM strategy. Also the percentage of respondents recognizing knowledge as an
asset which delivers higher value is higher for private sector than public sector.
A large number of private sector organizations in India like Wipro Technologies Ltd, Infosys
Technologies Ltd, etc. to name a new, have successfully adopted and implemented the
concept of KM. On the contrary, there is not much literature available on KM initiatives in
Indian public sector organizations. Rigid organizational structure and hierarchy, lack of
formal information sharing mechanism etc. are major factors that inhibit KM in this sector. It is
also found that in organizations where the implementation is done or in process, either the
process or results are not fully documented or if documented are not shared. Therefore, not
much is known or available in the public domain related to its implementation.
There are some common attributes that make a KM initiative a success or a failure.
Therefore, it is important to discuss these attributes and how it has contributed in developing
best practices for knowledge creation and dissemination in public and private sector
organizations. This KM implementation is discussed from various perspectives like process,
leadership, technology, culture and measurement.
Wipro Technologies Limited
It is a global services provider delivering technology-driven business solutions for various
industries. It is the largest independent research and development (R&D) services provider
in the world with over half billion revenue from it. The Wipro story is remarkable in that it
shows that having a sound, KM effort is no longer merely an option but rather a core
necessity for any organization anywhere in the world if it has to compete successfully and
survive globally. The statistics speak for themselves: in November 2002, shortly after the
two-year KM program was completed, Business Week ranked Wipro as seventh best
software services company in the world. The company serves more than 300 global leading
firms across North America, Europe and Asia. (Chatzkel, 2004). It also won the 2003 Asian
Most Admired Knowledge Enterprise (MAKE) award for creating a corporate-wide
knowledge-driven culture and delivering knowledge-based solutions.
In the mid-1990s, Wipro was the first Indian company to begin exploring the potential of Six
Sigma to drive its quality improvement efforts. The KM initiative at Wipro, which began in
2000, has its roots in continuous quality improvement program. Unprecedented growth,
complex projects, and increasing customer demands were some of the factors for adopting
KM at the organizational level:
B

The KM process. Wipros KM framework is divided into three stages. The first stage
assesses the competencies of people, establishes the desired competency levels and
current gaps and designs relevant training to bridge the gap. The second stage attempts,
through the use of technology, to retain the knowledge within the organization in a manner
that can be accessed by people on demand. The last stage involves people continuously
using the existing knowledge base, augmented with research to deliver higher value to
the customer.

Leadership in KM. At the centre of your vision has to be the customer, his/her changing
expectations and demands, Azim H Premji, Chairman and Managing Director, Wipro
Limited once said. Wipro aims to offer its customers innovative products services to meet
their ever-changing needs. To its employees it aims to offer an environment of knowledge
creation, sharing and learning for business excellence. This vision was taken up at the top
most management level and percolated to all levels of the organization. Top management
commitment, with the CEO driving the initiative is a critical success factor for ensuring the
success of this movement in Wipro (Kamalavijayan, 2005).

Building a collaborative learning environment and culture for KM. Developing a KM


culture was a significant challenge as an appreciation for the concept needed to be
developed among employees. It all started with an objective of providing a collaborative
and learning environment where employees could share and learn from one another. It

VOL. 14 NO. 6 2010 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 815

was felt that unless right culture and reward and recognition system is not in place,
collaboration and knowledge sharing is a distant dream. According to Rajakannu (n.d.), a
core team of employees was identified and given the task of focusing organizational
efforts on four business drivers: competitive responsiveness; collaborative work culture;
shorter time to market; and capturing tacit knowledge.
B

Infrastructure for KM technology. A robust and reliable infrastructure is a must for


capturing, storing and sharing of knowledge across the enterprise. Wipro leveraged its
existing IT infrastructure to capture, store and share knowledge across the enterprise.
With the infrastructure in place, applications were developed to address problems in
various departments of the organization. The focus was to learn from the experience of
others through tapping tacit knowledge.

Developing metrics for measurement of continuous improvement. At the start of the


knowledge initiative, as each project at Wipro was completed; a review board helped the
project team step back and evaluates its performance and outcomes. A very detailed
template was used to capture project data, including what went right or wrong, risks that
were identified at the beginning of the project and whether they were avoided, and
changes in direction that took place along the way. That process resulted in a draft
document that became part of the companys document repository (Lamont, 2008).

Bharat Heavy Electricals Limited (BHEL)


Established over 40 years ago, its one of the largest public sector engineering company in
India manufacturing over 180 products related to power generation and transmission,
transportation, telecommunication etc.
Since not much was known about KM implementation at BHEL in the public domain, a
qualitative research in form of unstructured informal interview was conducted with top and
middle level executives at BHEL. The objective was to understand issues related to KM
implementation in public sector that could be verified while analyzing the primary data.
According to a senior executive:
BHEL had a Project Engineering Management (PEM) division which executes mega projects. The
stakeholders involved were the internal BHEL units and external groups like customer,
consultants and vendors and during these years considerable amount of documentation was
generated. Also, BHEL had amassed a huge amount of intellectual property and knowledge while
working on projects. The knowledge, acquired by virtue of project experience and sustained
interaction, was earlier stored partly on paper and partly in digital format, and was available within
the teams for reference. At times it could be found stored in employees desk drawers. However,
such information often got buried in the maze of computers, hard disks, and directories of the
people, who have written these documents. Further, multiple copies of the documents existed,
thereby making it impossible to track the original documents or the latest versions. Also, mistakes
were repeated as non-standardized procedures and systems were being adopted in different
units. A lot of effort was wasted in searching for information or reinventing the wheel. Employee
experiences were rarely captured and success stories were not shared.

BHEL realized that to effectively manage the knowledge within the division, it required a
central repository for structured as well as unstructured data. This knowledge database
would act as a handy reference to project teams with a control mechanism for access by
authorized personnel only.
When asked how KM has helped in terms of competiveness and innovation, an executive
explains:
With documents residing in a central repository, BHEL has reduced the dependency on a
particular employee, who might possess a desired document, being available in the office. Now,
at any time documents can be searched and referred to by any staff member with relevant access
rights. Also, the search facility provided in SharePoint Portal Server creates an index of all
information such as files, Web sites, and e-mail messages. This index is easily searched using
both keywords and full text, thus, making it effortless to access any information. Now, in case of
employee resignation or retirement, the time spent on searching past data has been significantly
reduced.

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The KM process. BHEL have developed a robust and flexible document management
system which provides role-based access to documents. By creating appropriate roles,
the administrator prevents users from adding additional documents to the intranet site in
an ad-hoc manner. All documents detached from e-mail messages, for example, are first
sent to a designated administrator for approval before being published on the intranet.

Leadership in KM. Top management has given it utmost importance by creating team for
the implementation of the KM framework. It is compulsory to follow the framework in all
projects. The top management leadership has played an important role in providing equal
career development opportunities. This includes continuous training and retraining,
career planning, conducive work culture and participative style of management.

Building a collaborative learning environment and culture for KM. The key issue is not
about the latest information technologies, but whether these technologies are used within,
and for facilitating, a culture of information sharing, relationship building and trust. BHEL
being an engineering organization has created a knowledge bank through its efficient
document management system. All the designs, drawings, reports and other technical
information were stored in hard copies or digital format wherever possible.

Infrastructure for KM technology. A web portal is in place that not only organizes the
data and documents, but also helps the BHEL teams to provide a single window interface
to all users for various intranet applications that were already developed and deployed in
the organization. All the drawings are stored in a central server to enable the users to fetch
the required information in no time. The portal is a hierarchy of sub-sites that enables the
administrator to add lists, images, and documents to their respective categories.
Team-based web sites foster flexible collaboration between different departments, thus
enhancing corporate knowledge.

Developing metrics for measurement of continuous improvement. BHEL has developed


an internal metric to track how its central repository is being used by individuals and
teams across departments.

The above examples demonstrate successful KM initiatives by private and public sector
organization in India. Therefore, it becomes important to investigate the factors that
determine successful implementation in both these sectors. This idea has been formulated
as objectives in the following part of the paper.

Objectives
The objective of the study is to compare the KM initiatives by public and private sector
organizations in India. It is generally believed that private sector organizations are more
adaptive to the KM exercise as compared to the public sector organizations. Therefore, it is
expected that private sector organizations would score higher than public sector
organization on each of the dimensions of KM.

Methodology
In this study, the Knowledge Management Assessment Tool (KMAT) developed by the
American Productivity and Quality Center and Arthur Anderson Consulting (1995) has been
used. The KMAT is divided into five sections, namely, process, leadership, culture,
technology and measurement. Although, KMAT is an old model, it places all the major KM
activities and enablers together in a dynamic system. The intention of the KMAT is to follow a
qualitative approach to measure knowledge capital using benchmarking. Benchmarking is
used to identify best practice on the enablers given by KMAT. According to Jager (1999),
three types of comparisons reports can be generated using KMAT:
1. External benchmarking (compares an organization with overall KMAT database).
2. Internal benchmarking (compares an individual or division within an organization with
peers).

VOL. 14 NO. 6 2010 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 817

3. Average benchmarking (average of group or individual within an organization with overall


KMAT database).
The overall KMAT database could be multi-industry or sectors. Also, since the study involves
comparison across public and private sector organizations, the tool has an advantage as it
provides for such sectoral comparison. Other reasons for choosing the tool are:
B

It can be used for inter-organizational as well as intra-organizational comparison on


dimensions given by KMAT.

The comparison can also be made at an individual, group, organization, industry or any
other sectoral level.

The dimensions of KMATare generic in nature and make it suitable to be used irrespective
of the organization type and industry.

A reliability test using Cronbachs alpha was carried out which gave very satisfactory
results indicating consistency of the scale.

A confirmatory factor analysis was also carried out and it was found that the questions
belonged to only those dimensions given by KMAT thereby confirming its suitability to
Indian context.

Each of the above mentioned five dimensions have various items in it. For example, the
knowledge management process (KMP) is divided into five items labeled P1 to P5,
leadership in knowledge management (LKM) is divided into four items labeled L1 to L4,
knowledge management culture (KMC) is divided in five items labeled C1 to C5, knowledge
management technology (KMT) is divided into six items labeled as T1 to T6 and knowledge
management measurement (KMM) is divided into four items labeled M1 to M4. Each of the
items under the five dimension is measured on a five-point interval scale defined as 1 no,
2 poor, 3 fair, 4 good and 5 excellent. The scores of each of the items of various
dimension is added to give a total score for each dimension. For example, the total score for
KMP is obtained by adding the score of the item P1 to P5 and is represented by the variable
KMP. Similarly the total score for other four is computed. However for purpose of
comparison, the average score is considered.
A number of private sector and public sector companies were contacted for getting the
responses using the KMAT tool. Regular mail, e-mail, personal visits and, telephonic
conversations were used to make the respondents aware of the objectives of the study and
to seek their cooperation and participation in providing the information. A convenient
sampling scheme was used. About 100 organizations operating in India were contacted. A
number of public sector organizations in spite of our best efforts and their promise to mail the
questionnaires did not participate. A follow-up with these organizations resulted in 16
companies finally participating in the research study giving the primary data on the KMAT
instrument. Some companies also shared their literature on KM implementation.
Four public sector and 12 private sector organizations participated in the study. The private
sector companies which participated in the study are Satyam Computer Services Limited,
Mahindra & Mahindra Limited, Tinplate Company of India Limited, Tata Motors Limited,
Samtel Color Limited, Aricent Inc., Infosys Technologies Limited, North Delhi Private Limited,
International Business Machines Corporation Limited, Tata Steel Limited, Powerlink
Corporation Limited and Patni Computer Systems Limited. The public sector companies
that participated were Hindustan Aeronautics Limited, Bharat Electronics Limited, National
Thermal Power Corporation Limited and Bharat Heavy Electricals Limited. A total of 57
respondents participated in the survey.
Before conducting the analysis a reliability test was conducted on each of the five
dimensions and the entire 24 items in the KMAT instrument. The value of Cronbachs alpha
varied from 0.755 to 0.940 indicating a high degree of reliability. A confirmatory factor
analysis was conducted for each of the dimensions of KMAT instrument separately. The
results indicated that each of the dimension resulted in only one factors with variation being

PAGE 818 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 14 NO. 6 2010

explained ranging from 51.95 percent to 70.99 percent. This shows that the variables
chosen in any dimension belong to that particular factor only.
Next, we compare the dimensions of KMAT, namely, KMP, LKM, KMC, KMT and KMM across
public versus private sector organizations. To compare, for example, the KMP score for
public and private sector organizations, a two sample independent t-test is conducted
which is outlined below:
H0.

m1 m2.

H1.

m1 . m2.

where:

m1

Population mean of KMP for public sector companies.

m2

Population mean of KMP for private sector companies.

The test statistic used is:



X 1 2 X 2 2 m1 2 m2
t
n1 n2 22
s^
X 1 2X 2

where:
X 1

the sample mean of KMP score for public sector companies.

X 2
the sample mean of KMP score for private sector companies.
s^
the estimated standard error of the difference between X 1 and X 2 .
X 1 2 X 2
the size of first sample (public sector).
n1
n2

the size of second sample (private sector).

The test is conducted under the assumption that the variance of the two populations from
where samples are drawn is unknown but equal and both the samples are drawn from
population having a normal distribution. A significance level of 5 percent is used. A rejection
of null hypothesis would lead us to probe further to identify the cause of the difference
between the two sectors. For this, a t-test on the lines mentioned above is carried out for
each of the items of KMP. The same procedure is repeated for other dimensions namely
LKM, KMC, KMT and KMM. The findings of the study are discussed in the following part of
the paper.

Results and analysis


A comparative picture of the mean scores of the five dimensions is calculated and shown in
Figure 1.
It can be seen from Figure 1 that the mean score for the private sector is higher than that of
public sector in each of the five dimensions of KMAT instrument. In what follows is the
statistical analysis of the difference between the mean scores of each of the five dimensions
for public and private sector companies. Wherever a difference is found between mean
scores of public and private sector companies, further analysis is carried out to understand
the cause of the difference by comparing the mean scores of various items that constitute
the dimension.
The difference in the mean scores of each of the five dimensions was carried out by using a
t-test to test the hypothesis that whether public sector companies are lagging behind the
private sector companies in each of the dimensions. The results of the t-test are summarized
in Table I.
The results in Table I indicate that private sector companies are ahead of the public sector
companies in each of the five dimensions as indicated by the one tailed t-test at 5 percent

VOL. 14 NO. 6 2010 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 819

Figure 1 Comparison of mean score for public and private sector organizations for various
dimensions of KMAT

Mean Score on dimensions of KMAT

5.000

4.000

3.872

3.912

3.753

3.657
3.357

3.214

3.366

3.274

3.089

3.000

2.750

2.000

1.000

Knowledge
Management
Process (KMP)

Leadership in
Knowledge
Management (LKM)

Knowledge
Management Culture
(KMC)

Knowledge
Management
Technology (KMT)

Knowledge
Management
Measurement (KMM)

Public Sector

3.214

3.089

3.357

3.274

2.750

Private Sector

3.753

3.657

3.912

3.872

3.366

Dimensions of Knowledge Management Assessment Tool (KMAT)

Table I Results of independent sample t-test for comparing the means of various
dimensions of the Knowledge Management Assessment Tool (KMAT) for public
and private sector companies
S. no.

Items

1.
2.
3.
4.
5.

Knowledge management process


Leadership in knowledge management
Knowledge management culture
Knowledge management technology
Knowledge management measurement

t-statistic

Significance at 5 percent

22.946
22.559
23.695
23.050
22.370

*
*
*
*
*

Note: *Indicates significance as indicated by one-tailed t-statistic at 5 percent level

level of significance. The reason could be due to competitive pressure to compete with
world-class companies. Other reason could be a well-defined strategy for integrating KM in
the corporate strategy for private sector companies as compared with public sector
companies, which reflect the leadership and the culture in an organization.
To understand the reason for better performance of private sector over public sector
organizations, a comparison of each of the items that constitute each dimension is made
using independent sample t-test. The results for the five items of the dimension KMP labeled
as P1 to P5 are summarized in Table II.
It is evident from Table II that the mean score of various items (P2-P5) is statistically higher for
the private sector companies than for the public sector. It is only the item P1 where no statistical
difference between the private and public sector companies is found. The reason for the
difference could be that employees in the private sector are empowered to bring in fresh ideas
to improve workplace processes. Also, private sector companies are ahead in formalizing the
process of transferring best practices, documents and lessons learned among their
employees. They also emphasize on the importance of tacit knowledge in employees and
efforts are made to transfer and share the valuable knowledge across the organization.
In order to understand the causes of difference in the dimension LKM, a t-test for comparing
the mean scores of various items for private and public sector was carried out and the results
are summarized in Table III.

PAGE 820 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 14 NO. 6 2010

Table II Results of Independent sample t-test for comparing means of various items of
knowledge management process (KMP) for public and private sector companies
S. no.

Items

1.

Knowledge gaps are systematically identified


and well-defined processes are used to close
them (P1)
A sophisticated and ethical intelligence
gathering mechanism has been developed (P2)
All members of the organization are involved in
looking for ideas in traditional and nontraditional
places (P3)
The organization has formalized the process of
transferring best practices, including
documentation and lessons learned (P4)
Tacit knowledge (what employees know how to
do, but cannot express) is valued and transferred
across the organization (P5)

2.
3.

4.

5.

t-statistic

Significance at 5 percent

20.905

Not significant

22.294

22.730

22.351

22.190

Note: *Indicates significance as indicated by one-tailed t-statistic at 5 percent level

Table III Results of independent sample t-test for comparing means of various items of
leadership in knowledge management (LKM) for public and private sector
companies
S. no.

Items

1.

Managing organizational knowledge is central to


the organizations strategy (L1)
The organization understands the
revenue-generating potential of its knowledge
assets and develops strategies for marketing
and selling them (L2)
The organization uses learning to support
existing core competencies and create new ones
(L3)
Individuals are hired, evaluated and
compensated for their contributions to the
development of organizational knowledge (L4)

2.

3.

4.

t-statistic

Significance at 5 percent

22.671

21.086

Not significant

21.403

Not significant

22.689

Note: *Indicates significance as indicated by one-tailed t-statistic at 5 percent level

It can be observed from Table III that except for item L2 and L3, the other two items namely
L1 and L4 are statistically significant. This means that private sector organizations treat
knowledge as central to their organizations strategy better in comparison to their public
sector counterparts. In such organizations, individuals are hired, evaluated and
compensated for their contributions to the development of organizational knowledge. This
further illustrates the importance of leadership process applied in managing organizational
knowledge and the relevance of compensation, reward and recognition for the employees
involved in the knowledge creation and dissemination.
To identify the source of difference in the mean scores of the dimension KMC for public and
private sector organizations, an independent sample t-test for comparing the mean scores
of the various items that constitute KMC was carried out and the results are summarized in
Table IV.
It is evident from Table IV that except for item C5, the mean score for the private sector is
statistically higher than that of public sector organizations. Therefore, public sector
organizations need to focus on creating a climate of trust and openness which facilitates
knowledge sharing. It is also important that customer value creation should drive KM
initiative and employees should be given flexibility to innovate and think of new ideas.

VOL. 14 NO. 6 2010 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 821

Table IV Results of independent sample t-test for comparing means of various items of
knowledge management culture (KMC) for public and private sector companies
S. no.

Items

1.

The organization encourages and facilitates


knowledge sharing (C1)
A climate of openness and trust permeates the
organization (C2)
Customer value creation is acknowledged as
major objective of knowledge management (C3)
Flexibility and a desire to innovate drive the
learning process (C4)
Employees take responsibility for their own
learning (C5)

2.
3.
4.
5.

t-statistic

Significance at 5 percent

24.487

21.878

23.137

22.858

20.731

Not significant

Note: *Indicates significance as indicated by one-tailed t-statistic at 5 percent level

With respect to dimension KMT, the mean score for private sector organization is statistically
higher than their public sector counterparts. To identify the source of difference, an
independent sample t-test was carried out its various items. The result is summarized in
Table V.
From Table V, it is clear that except T1, significant difference exists for the remaining
components, i.e. (T2-T6) for private and public sector organizations. The mean score for
private sector organizations is statistically higher as compared to the public sector for these
items. Technology helps in capturing, storing, analyzing and dissemination of information. It
creates an institutional memory accessible to all employees. Technology helps in linking the
organization to its customers in a better way. With the organization, it fosters workplace
collaboration and teamwork. Information technology drives the organizations information
systems which are real-time, integrated and fast. In all, the private sector leverages
technology better than the public sector to achieve flexibility, efficiency, effectiveness and
growth. Technology enables knowledge dissemination among customers, employees and
other stakeholders. The focus on HR processes further supplements technology and people
issues, thus enabling the information systems for KM among private sector companies
better as compared to the public sector companies.
For the last dimension, i.e. KMM the mean score for the private sector organizations is
statistically higher for the private sector than for the public sector organizations. Therefore, a

Table V Results of independent sample t-test for comparing means of various items of
knowledge management technology (KMT) for public and private sector
companies
S. no.

Items

1.

Technology links all members of the enterprise to


one another and to all relevant external publics
(T1)
Technology creates an institutional memory that
is accessible to the entire enterprise (T2)
Technology brings the organization closer to its
customers (T3)
The organization fosters development of human
centered information technology (T4)
Technology that supports collaboration is rapidly
placed in the hands of employees (T5)
Information systems are real-time, integrated,
and smart (T6)

2.
3.
4.
5.
6.

t-statistic

Significance at 5 percent

21.197

Not significant

22.770

23.531

22.608

22.713

21.762

Note: *Indicates significance as indicated by one-tailed t-statistic at 5 percent level

PAGE 822 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 14 NO. 6 2010

comparison between the mean score of four items that constitute the dimension KMM is
carried out for the two sectors. The results are summarized in Table VI.
An analysis of Table VI reveals that only the item M2 is statistically significantly higher for
private sector than for public sector. Private sector organizations have developed set of
specific indicators to manage knowledge that is not prevalent in the public sector
organizations.

Conclusion
The study attempts to understand how public and private organizations implement KM
differently. Data on various dimensions of KMAT were collected and analyzed and it was
found that private sector organizations scored higher as compared to public sector on all the
dimensions. Further, wherever significant difference was found, an analysis was carried out
on all the items constituting the dimensions for public and private sector companies, to
identify the causes for the differences.
For the dimension KMP, existence of ethical gathering mechanism, involvement of
stakeholders for ideas, mechanism of transferring best practices and knowledge and
importance of tacit knowledge came out to be significantly higher for private sector than for
public sector organizations. A plausible reason could be that public sector organizations are
traditionally characterized by hierarchies, with few incentives for innovation and team work.
Often the incentives to share best practices does not exist or not very clear. On the other
hand private sector organizations make use of internal benchmarking effectively to identify
improvement opportunities. This involves identifying employee knowledge gaps, take action
to bridge gaps and create reusable repositories. Private sector organizations also
demonstrate better external scanning abilities in terms of industry trends, customers,
suppliers, investors and competitors. This in turn results in better linkages and partnership
opportunities. Private sector organizations also encourage job rotation, apprenticeship,
mentorship, etc. to maximize the sharing of tacit knowledge and its conversion into explicit
form.
Similarly for LKM, considering organizational knowledge central to organizational strategy
and individuals evaluation and compensation turned out to be significantly higher. A study
by KPMG Consulting (2000) confirmed that KM is an acknowledged part of the business
agenda and organizations with a KM program are demonstrably better off than those
without. Private sector organizations believe that there is a strong linkage between KM and
improved business performance. Majority of them have a designated authority to promote
and foresee knowledge creation and sharing. This chief knowledge officer (CKO) uses
promotions, salary increments, perks, allowances, bonuses and other forms of rewards and
recognitions to encourage knowledge sharing. Feedback from other stakeholders like
Table VI Results of independent sample t-test for comparing means of various items of
knowledge management measurement (KMM) for public and private sector
companies
S. no.

Items

1.

The organization has invented ways to link


knowledge to financial results (M1)
The organization has developed a specific set of
indicators to manage knowledge (M2)
The organizations set of measures balances
hard and soft as well as financial and
non-financial indicators (M3)
The organization allocates resources toward
efforts that measurably increase its knowledge
base (M4)

2.
3.

4.

t-statistic

Significance at 5 percent

21.034

Not significant

24.491

21.589

Not significant

21.378

Not significant

Note: *Indicates significance as indicated by one-tailed t-statistic at 5 percent level

VOL. 14 NO. 6 2010 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 823

suppliers, customers, investors, etc. is sought to improve the corporate knowledge base.
The management of such organizations provides time, resources and relevant training to
achieve goals. In the entire process, the top management plays the role of a guide and
mentor.
With respect to the dimension KMC, existence of a culture that fosters knowledge sharing,
openness and trust, customer value creation, flexibility and innovation came out to be
significant. A study by Singh and Soltani (2010) in ten Indian ITcompanies, found that culture
mediates knowledge distribution at individual and organizational level thereby indicating the
need to document experiences gained from earlier projects. It was also clearly evident that
individuals are not visibly rewarded for knowledge sharing. Since, private sector
organizations have relatively flat organization structure it enables cross-functional
teamwork across divisions, plants and department. This in turn enhances information flow
and allows employees to update with external market place changes. Private sector
organizations also demonstrate greater tolerance for uncertainty and ambiguity that
encourages employee ability to experiment, innovate and create new ideas. Definitely there
is a greater degree of accountability although failures are not punished.
For KMT, usage of technology for improving accessibility, bringing customers close to
organization, collaboration and integration were found significant. In private sector
organizations technology is available to all employees and they are trained on its usage. The
technology infrastructure includes formal knowledge capture systems that update
knowledge repositories. Availability of experiences associated with projects, day-to-day
activities, etc. allow employees to spend more time on innovation rather than reinventing the
wheel. These repositories are available across functions and employee levels. Technology
also improves communication, allows customer to participate in product development,
which in turns makes it possible to align the product features with emerging customer needs.
In the last dimension KMM, developing specific set of indicators to manage knowledge
turned out to be significantly higher for private than for public sector organizations. Private
sector organizations have developed strong metrics and knowledge audit systems to
determine the return of its knowledge investments. These returns are most often published in
company reports. In addition, other indicators like customer retention, employee retention,
new product/service launched, process improvements like cycle time reduction, cost
reduction, quality improvement etc. are used which goes beyond the traditional accounting
system.
In India, KM in public sector is still in its infancy and has a long way to go in order to keep
pace with private sector counterparts. Similar results are found in a study carried out by
Cong et al. (2007) in the Chinese context. They found that there is a lack of clear strategy to
implement KM practices in the public sector as compared to the private sector. Also junior
staff such as clerks, support staff, etc. in public sector organizations are not recognized as
knowledge worker. Another study by McAdam and Reid (2000) obtained just the opposite
results in favor of public sector. According to them KM was more developed as a
management philosophy in the public sector. They also emphasized that the public sector
encourages more formal discussion, facilitates systematically knowledge sharing as
compared with the private sector. Employees take responsibility for their own learning and
discussions are encouraged through out the organizations as compared with the private
sector. It was found that public sector organizations have a more coherent strategy for KM
and they are more advanced in areas of knowledge sharing than the private sector.
Some of the research studies corroborated our findings; however there are others whose
findings are altogether different. There is one thing common that both public and private
sector organizations in India need to improve on various dimensions of KM like process,
leadership, culture, technology and measurement. This is because the mean scores on all
the five dimensions of KMAT tools are below four for both private and public sectors. Similar
results were obtained in a study by KPMG Consulting (2000), which indicated that
organizations with a KM program have a long way to go on the knowledge journey.

PAGE 824 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 14 NO. 6 2010

It is recommended that public sector organizations should look out for new opportunities
with customers, suppliers and even competitor. This may involve learning from market
leaders who may be a competitor. To develop this attitude of benchmarking, top
management will have to play an important role. Better training and education opportunities
will help employees to identify knowledge gaps and reduce resistance to change.
Documentation of experiences should be made compulsory and made accessible for others
to understand and apply. Another important dimension on which public sector needs
attention is human resource planning. Its important as part of succession planning that
juniors in consultation with seniors should jointly set learning goals and management should
provide the means to meet the same. The management should also be consistent with
evaluating the efforts and rewarding deserving candidates for their contributing towards
knowledge creation and sharing. It is also important to minimize hierarchies and functional
silos by promoting joint projects and cross-functional teams. Authority with accountability
should be practiced. Similarly, although private sector is ahead of the public sector in the KM
initiative and its dimensions, it has still a long way to go.

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PAGE 826 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 14 NO. 6 2010

About the authors


Deepak Chawla is Professor of Quantitative Techniques and Marketing Research at the
International Management Institute, New Delhi, India. He has over three decades of
teaching, research and consulting experience. His areas of academic interest include
business statistics, marketing research, business forecasting, applied econometrics,
managerial economics and actuarial science. Deepak Chawla is the corresponding author
and can be contacted at: dchawla@imi.edu
Himanshu Joshi is Senior Lecturer of Information Technology at the International
Management Institute, New Delhi, India. He has over three years of experience in
teaching and research, as well as six years of experience in the IT industry. His areas of
interest include electronic business, enterprise resource planning, knowledge management,
etc.

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