Title

Barriers to more active knowledge management in Hong Kong business sectors

Introduction
Knowledge has been identified as one of most important resources in business organizations
along with the more traditional resources such as financial capital, labor, factories, machines,
laboratories, customer base, etc. It has been considered as a more critical corporate
competence especially in this technological era.
Hong Kong, as a region so adaptive to the latest technologies and the latest business
developments, local enterprises compete as hungrily for knowledge resources as their western
counterparts. They face great challenge of the shortage of quality human resource especially
in recent years of tough economic environment. However 98% of these local enterprises are
SMEs with no more than 10 employees on average. They are reluctant to invest in staff
training or any other way of improving employee skills in the fear that their investments will
eventually be reaped by their competitors or bigger corporations since the turnover rate is
generally high in Hong Kong. The traditional knowledge management practices such as
apprenticeship are being abandoning as it cannot cope with the modern business processes
and fast growing pace. Informal internal on-job training is the most common form of practice
in the local SMEs, however it cannot be efficient enough without the involvement of
resources and good management. And the process will have to repeat again and again at each
staff turnover. In some cases the turnover is so rapid that the employees quit their jobs before
1

they can pick up the required skill set fully and even less is being transferred to their
replacement staff, knowledge lost gradually in the organization.
Therefore it seems more effective knowledge management would be the answer to this
dilemma situation. However the low implementation rate of knowledge management in Hong
Kong suggests that there may be considerable barrier to the actual process of implementation
of KM in Hong Kongs unique situation.

Focus questions
In the view that most of the Hong Kong firms are struggling with the shortage of quality
human resources which hinders their further development and may even pose risk to their
business sustainability, one may wonder what would be the solution for Hong Kong firms in
this more challenging than ever environment. Government has been actively involved in
improving general labor skills via education and post school vocational trainings. This had
certainly helped individuals as well as Hong Kong business in the transition to knowledge
economic, while the cost effectiveness of the government involvement remain to be
evaluated, it is not the total solution to the problem of quality human resources that all the
local firms are facing. It is not a substitution to for example on-job training which is
important for building up the organization specific knowledge. The focus questions for this
research topic are therefore as follows.
Is knowledge management a solution for the Hong Kong firms to the human resource
challenges they faced?
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Why the knowledge management implementation rate is low for Hong Kong firms?
What are the barriers for Hong Kong firms to implement knowledge management?
However before proceed to investigate with above focus questions, the scope and aspects of
KM must be first well defined. Organizational activities and processes that are considered
related to the context of this study will be defined and referenced to in all parts within this
study.

Context of the study and your worldview

The value of knowledge has long been recognized as an important asset for individuals and as
well as for organizations. In the era of knowledge economic, the knowledge level of
employees in an organization is directly related to the organizations productivity, innovation
capability and overall performance. The knowledge resides in individuals, teams and
organizations is a major component of human capital in the organizations. Staff retention
program may help an organization to maintain the knowledge within an organization.
However much of the knowledge will still be lost at staff turnover. The knowledge possessed
by individuals should rightfully be carried with the individuals and used on their new jobs,
but at the same time the knowledge acquired by the individuals at their paid work time,
maybe through training or other means, should also be the property of the organization. If
organizations could not foresee the positive results of investing in improving the quality of
their human resources and thus reluctant to further invest, this will not be beneficial to
employees, employers or Hong Kong industry as a whole. Knowledge Management (KM)
3

can be viewed as the ways for the organizations to build up the corporate knowledge that is
aligned with the organizations overall strategic.
Though the study of KM as an academic discipline arguably started by Nonaka in 1991
(Nonaka 1991), KM practices can be traced back to pre-industrialization ages in form of
apprenticeship which is common to the business organizations in both eastern and western
world. Apprenticeship, informal internal on-job training or other forms of knowledge
acquisition by individual for the purpose of improving ones working skills without much
active involvement of the management or company policy are considered more traditional or
the natural form of KM. In this study, it is more interested in active, organizational,
management involved and company policies specifically made to encourage, enforce and
facilitate the knowledge capturing and sharing processes.
This study will also focus on Hong Kong local firms especially the SMEs. Researches will be
conducted to find out the Hong Kong firms awareness of KM, their perceived necessity of
implementation, hindrances to proceed and the difficulties incurred during actual
implementation. Their attitude towards KM and the difficulties incurred during KM
implementation will be categorized and analyzed. In comparison a Hong Kong firm that has
completed implementation of KM will also be studied to see how it copes with the barriers.
However the main focus is still on the difficulties the general Hong Kong firms face.
Since large MNCs may share different sets of resources and may have incorporated KM
policies that have been strategized at the headquarters. Studies of those MNCs have already

been covered by various literatures such as the article by Bjrkman I, Barner-Rasmussen W

and Li (2004). Therefore this research should exclude those MNCs. Government departments
on the other hand are not motivated by profit making and are often driven by other directives,
study of those provide no direct value to the Hong Kong business organizations and therefore
they will also be excluded.
Hong Kongs economy is quite unique in the world, despite of its tiny landscape, there are
around seven hundred million populations and it claims to be one of the leading international
financial centers and being one of the freest economy. Hong Kong has been well developed
but it is not heavily industrialized as U.S., U.K. or many other European countries.
Geographically it is close and similar to Singapore and Taiwan, however the governments
involvement in the economy is at a much lesser extend. And its economic environment is
changing at such fast pace. Furthermore the unique culture of Hong Kong may also have
strong influence on the management decision making regarding KM and KM
implementation. All these make the study of KM of Hong Kong firms very interesting and
unique.

Initial literature review

Literature review starts off by briefly looking into the importance of knowledge and its
implication for business. Knowledge is an important organizational resource (Penrose
1995). Knowledge is a key element for innovation as knowledge can also be combined and
recombined to generate new knowledge (Grant R M 1996).
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Knowledge Management (KM) is a very broad field and may be studied from many different
angles such as organizational structure, business administration and management or
information system. And it is closely related to other concepts such as organizational learning
and organizational memory. Since it was established more recently than many of other
disciplines in the business study, there exist different definitions of the subject. Therefore it is
necessary to review the literatures and look for a definition of KM that is more applicable for
the context of this study.
KM can be defined as doing what is needed to get the most out of knowledge resources by
Becerra-Fernandez, Gonzalez and Sabherwal (2004). Peter Drucker (1994 cited in BecerraFernandez et al, 2004), as considered by many as the father of KM, best defines the need for
KM: Knowledge has become the key resources, for a nations military strength as well as for
its economic strength is fundamentally different from the traditionally key resources of the
economist land, labor, and even capital we need systematic work on the quality of
knowledge and the productivity of knowledge the performance capacity, if not the
survival, of any organization in the knowledge society will come increasingly to depend on
those two factors.
Other views on KM by relating it to organizational learning (Levitt and March, 1988; Huber,
1991) and the knowledge-based view of the firm (Spender, 1989; Nonaka, 1991, 1994)
focuses upon the acquisition and creation of organizational knowledge will also be studied.
Grant (1996) identified in his paper the primary role of the firm as integrating the specialist

knowledge resident in individuals into goods and services. The primary task of management
is establishing the coordination necessary for this knowledge integration. The main
implications of the paper stem from this analysis of coordination. While organization theory
has tended to concentrate upon the problems of achieving cooperation, the complexities of
knowledge integration, especially when tacit knowledge is involved, point to the fact that,
even in the absence of goal conflict, coordination is not a trivial issue.
The difficulties and barriers to successful implementation of KM that was studied in previous
literatures will then be reviewed. Harnessing knowledge for increasing returns, however, is
not an easy task, Leidner (2000). "knowledge management as a double edged sword"
advocated by Schultze and Leidner (2002). They encouraged researchers to put more focus
on the difficult issues of power and conflict that knowledge management might incite. Some
others have documented unsuccessful knowledge management efforts, concluding that
managing knowledge is not easy (Nidumolu et al. 2001). He compared the effectiveness of
top-down approach to KM and the situated individual efforts to acquire and deploy the
knowledge needed to perform day-to-day tasks. Nonaka and Takeuchi (1995) suggested
difficulties arise because knowledge processes have to be managed at and across different
organizational levels. They pointed out that in order to facilitate the knowledge creation
process, it requires a fresh way to think about managerial roles and responsibilities,
organizational design, and business practices. Across levels, the coupling of different
knowledge processes can give rise to unanticipated negative consequences (Senge 1990).
7

Other studies that unveil the potential downside of KM will also be reviewed including the
work from Fahey and Prusak (1998) as well as Soo et al. (2002). In their article The Eleven
Deadliest Sins of Knowledge Management, Fahey and Prusak (1998) listed out the eleven
most common errors in KM implementation.
1. Not developing a working definition of knowledge
2. Emphasizing knowledge stock to the detriment of knowledge flow
3. Viewing knowledge as existing predominantly outside the heads of individuals
4. Not understanding that a fundamental intermediate purpose of managing knowledge is to
create shared context
5. Paying little heed to the role and importance of tacit knowledge
6. Disentangling knowledge from its uses
7. Downplaying thinking and reasoning
8. Focusing on the past and the present and not the future
9. Failing to recognize the importance of experimentation
10. Substituting technological contact for human interface
11. Seeking to develop direct measures of knowledge
These errors they identified are particularly useful for comparison to Hong Kong context.
Soo et al. (2002) identified the "knowledge traps" which are the managerial pitfalls when the
management failed to recognize that knowledge management is a philosophy about business
operations, not a simple process that can be bolted onto business models.
However during the literature review, little was found directly related to the Hong Kong
context. There was not much study has been specifically done on the barriers to KM Hong
8

Kong firms face. Due to the unique environment of the Hong Kong economy, Hong Kong
local firms may have quite different attitude towards KM and may have different set of
barriers as comparing to other parts of the world.

Research approach and proposed methodology

Knowledge can be an entity in both social science and natural science. Explicit knowledge
can be hard facts while the tacit knowledge can be more subjective. In this research the
ontological assumption for reality will largely be based on the objective quantitative studies,
however subjective qualitative studies will help to have deeper understanding the true nature
of what the data really represents. The role of researcher should remain as neutral as possible
and independent of the collected data, however some personal interpretation of the quality
data by the researcher would be inevitable. Since the researcher has been working in the
information system industry for many years, strong personal interest has been developed in
the subject of KM.
Therefore, in exploring the barriers to KM implementation in Hong Kong, the pluralistic or
pragmatism approach will be employed. Both survey and case study will be used as the
research methodology. Primary date will be collected via descriptive survey while secondary
date such as published information will be used for case study.
Three hypotheses will be established in this study, hypothesis 1, the KM implementation rate
in Hong Kong private sector is low; hypothesis 2, there are significant barriers to the KM
implementation in Hong Kong firms; hypothesis 3, the perceived relevancies of different
9

barriers to the KM implementation in Hong Kong may be different from other well developed
western countries such as U.S. or U.K.

Research methods Issues of ethics and access

Survey will be conducted in the form of both on-line questionnaire and face to face
questionnaire. Same set of questions will be used for on-line poll and face to face interview.
The on-line questionnaire is targeted to employees of all levels in Hong Kong, while the face
to face interview will be conducted with around 20 middle to senior management. The
questions will be constructed into 4 main sections. First section will consist of closed
questions and focus on the awareness of KM. The second section will consist of closed
question as well as questions with scales of measurements to find out Hong Kong firms
intension towards KM. Then there will be a section with mainly questions with scales of
measurements to measure Hong Kong firms level of involvement in KM. The final section
will consist of closed questions, multiple choices and a few open questions to find out the
barriers and their relevancies to KM implementation in Hong Kong context.
The questionnaire is intended to be distributed on-line via web download. It will be posted on
the most popular public forum (http://www.discuss.com.hk/forumdisplay.php?fid=39) for
general career discussion. The forum users are mostly Hong Kong employees who are
interested in discussion with their career development and other job related issues. It is a
good match for the target audience of the questionnaire. However it is noted that the forum
users are not the entire representative to the Hong Kong employees, they are merely
10

representing the younger generation with internet access. But at the same time they are likely
the group change their jobs more frequently and eager to develop their careers.
Another 20 participants for the questionnaire are selected from personal acquaintances, they
should represent the middle to senior management of Hong Kong local firms. The
questionnaire will be filled in a face to face interview.
The results of the survey will help to analyze the barriers of KM implementation in the view
from Hong Kong firms who had some involvement in KM and compare with those firms
reluctant to put effort to implement KM. Also the barriers arose during the different stages of
knowledge creation, capture, organization and sharing and their relevancy. From the answers
of the open questions, patterns and trends will be observed and analyzed.
A case study on a typical Hong Kong firm that has implemented KM based on published
data, document or literatures will also be conducted in order to see in what situation KM
implementation may be more favorable or the obstacles can be overcomes.
The findings will be analyzed and verified against existing literature and theories. Descriptive
statistics through quantitative data collection will be used to determine the perceived KM
barriers and their importance. Thematic analysis will be applied to the results from the open
questions in order to identify any underlying pattern.
All participants of the on-line questionnaire and interview will remain anonymous. No
information of any commercial value will be unveiled, the name and address of participants
organization will not be retrieved in the questionnaire. The results from the research will not
be involved in any commercial or public use. Data collected and analysis conducted in this
11

study will not be disclosed to any party other than HUBS. Therefore throughout the whole
process of research, it should not pose any risk or harm to the participants, their
organizations, the general public or the researcher. However constant reflection on the
consequences of process and decision made during the research is still necessary.

Action plan
(please see next page)

word count: 3,117

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Bibliography

Becerra-Fernandez, Gonzalez and Sabherwal (2004) Knowledge Management Challenges,

Solutions, and Technologies
Bjrkman I, Barner-Rasmussen W and Li (2004) Managing Knowledge Transfer in MNCs:
The Impact of Headquarters Control Mechanisms, Journal of International Business Studies,
Vol. 35, No. 5, pp. 443-455
Drucker P (1994) The Age of Social Transformation, The Atlantic Monthly, Nov. 1994
Fahey L and Prusak L (1998) The Eleven Deadliest Sins of Knowledge Management,
California Management Review (40:3), 1998, pp. 265 276.
Grant R M (1996) Prospering in dynamically-competitive environments: Organizational
capability as knowledge integration, Organization Science, 7, pp. 375-387
Grant R M (1996) Toward A Knowledge-Based Theory Of The Firm, Strategic Management
Journal, Vol. 17, pp. 109-122
Penrose E (1995) The Theory of the Growth of the Firm, Oxford University Press, 1995
Leidner D (2000) Editorial, Journal of Strategic Information Systems (9), 2000, pp. 101-105
Levitt B and March J G (1988) Organizational learning, Annual Review of Sociology, 14, pp.
319-340
Nidumolu S, Subramani M, and Aldrich A (2001) Situated Learning and the Situated
Knowledge Web: Exploring the Ground Beneath Knowledge Management, Journal of
Management Information Systems (18:1), 2001, pp. 115-150.
Nonaka I (1991) The knowledge-creating company, Harvard Business Review, 69(6) pp. 96104
Nonaka I and Takeuchi H (1995) The Knowledge Creating Company
Schultze U and Leidner D (2002) Studying Knowledge Management In Information Systems
Research: Discourses and Theoretical Assumptions, MIS Quarterly (26:3), 2002, pp. 213-242
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Senge P M (1990) The Fifth Discipline

Soo C, Devinney T, Midgley D and Deering A (2002) Knowledge Management: Philosophy,
Processes and Pitfalls, California Management Review (44:4), 2002, pp. 129-150

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Appendix
A PROFORMA FOR
STAFF AND STUDENTS BEGINNING A RESEARCH PROJECT
HULL UNIVERSITY BUSINESS SCHOOL
This proforma should be completed by all staff and research students undertaking a
research project and by taught students undertaking a research project as part of a taught
module.
Part A (compulsory)

Research Proposer(s): Yuen Chi Yeung Young................

Programme of StudyEMBA HK programme.
Research (Working Dissertation/Thesis) Title: Barriers to more active knowledge
management in Hong Kong business sectors...
Research (brief): ..
Barriers to knowledge management implementation in Hong Kong business sectors.....
.
.
.....
.....
.....
Proforma Completion Date: 3rd May 2011
Tick and sign by one of the following statements:
1) I confirm that human participants are not involved in my research
and no ethical considerations are envisaged.
Signature of researcher.........................................................

2) Human participants are involved in my research and/or there are

other ethical considerations in my research.
15

Signature of researcher.........................................................
If statement 1 is ticked and signed, there is no need to proceed further with this proforma,
and research may proceed now.
If statement 2 is ticked and signed the researcher should complete part B of this proforma.
Part B
This proforma should be read in conjunction with the HUBS Principles for Ethics in Research
and the HUBS flow chart of ethical consideration of proposals. It should be completed by
the researchers. It should be sent on completion, together with a brief (maximum one page)
summary of the issues/problems in the research (and how they are proposed to be dealt
with), for approval to the Chair of the HUBS Research Ethics Committee (or nominated
Committee member) or in the case of research being completed as part of a taught module
to the students supervisor or module leader prior to the beginning of any research.
NOTE
If this research has a research population of those under 18 years of age it requires specific
authorisation, including that from authorities outside the University. It should not proceed
until such authorisation has been obtained.

1. Will you obtain written informed consent from the participants?

Y/N

If yes, please include a copy of the information letter requesting consent. In the case of
electronic surveys it is acceptable to advise participants that completion of the survey
constitutes consent. Please provide a printout of the survey template.
If no, the research should not proceed unless you can specifically satisfy the Research
Ethics Committee with the measures you will take to deal with this matter.
2. Has there been any withholding of disclosure of information regarding
the research/teaching to the participants?

Y/N

If yes, please describe the measures you have taken to deal with this.

3. Issues for participants. Please answer the following and state how you will manage
16

perceived risks if any answer is YES:

a)

Do any aspects of the study pose a possible risk to

participants physical well-being (e.g. use of substances

YES

NO

YES

NO

YES

NO

YES

NO

YES

NO

YES

NO

YES

NO

such as alcohol or extreme situations such as sleep

deprivation)?
b)

Are there any aspects of the study that participants

might find humiliating, embarrassing, ego-threatening, in
conflict with their values, or be otherwise emotionally
upsetting?*

c)

Are there any aspects of the study that might threaten

participants privacy (e.g. questions of a very personal
nature; observation of individuals in situations which are
not obviously public)?*

d)

Does the study require access to confidential sources of

information (e.g. medical records)?

Could the intended participants for the study be

expected to be more than usually emotionally vulnerable
(e.g. medical patients, bereaved individuals)?

Will the study take place in a setting other than the

University campus or residential buildings?

Will the intended participants of the study be individuals

who are not members of the University community?

*Note: if the intended participants are of a different social, racial, cultural, age or
sex group to the researcher(s) and there is any doubt about the possible impact of
the planned procedures, then opinion should be sought from members of the
relevant group.
4.
Might conducting the study expose the researcher to any risks
(e.g. collecting data in potentially dangerous environments)?

YES

NO

Explain your method of dealing with this.

17

5. Is

the

research

being

conducted

on

group

culturally

different

from

researcher/student/supervisors?

Y/N

If yes, are sensitivities and problems likely to arise?

Y/N?

the

If yes, please describe how you have addressed/will address them.

6.

Does the research/teaching conflict with any of the HUBSs research principles?

Y/N

If YES do not proceed, for the Research Ethics Committee describe what action you
have taken to address this?

7.

If the research/teaching requires the consent of any organisation, have you obtained it?
Y/N
If NO do not proceed, for the Research Ethics Committee describe what action you
have taken to overcome this problem.

8.

Have you needed to discuss the likelihood of ethical problems with this research with
an informed colleague?

Y/N

If yes, please name the colleague and provide the date and results of the
discussion.

Thank you for completing this proforma.

This form must be signed by you, your

supervisor/colleague and the HUBS Research Ethics Committee representative for your
area or in the case of students undertaking research as part of a taught module, by you and
your supervisor or module leader. Once signed, staff and research students should send
copies of this form, and the proposal must be sent to the Secretary of the Research Ethics
Committee, Hull University Business School (see flow chart), including where possible
18

examples of letters describing the purposes and implications of the research, and any
Consent Forms (see appendices).
Name of Researcher/Student Yuen Chi Yeung Young
Signature X Date 3rd May 2011...
Name of Supervisor/Colleague/Module leader
Signature Date ...
For proformas completed by staff and research students only:
Name of Research Ethics Committee member
Signature Date ...
For proformas relating to research funded by grants, please complete the following:
pFact no:
RAR no:
Funder/sponsor

19