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Knowledge
Knowledge management management
strategy: an organizational strategy

change prospective
Muhammad Kashif Imran, Ahmad Raza Bilal, Usman Aslam and 335
Ubaid-Ur-Rahman Received 15 October 2015
Department of Management Sciences, Superior University, Lahore, Pakistan Revised 21 April 2016
Accepted 22 April 2016

Abstract
Purpose – The most critical phase of a change process is change implementation and it is evident that the
masterfully originated change process fails due to its poor implementation. Therefore, the purpose of this
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paper is to profile how knowledge management (KM) strategies, personalization and codification, are helpful
in successful change implementation by reducing employee cynicism and increasing the level of readiness
for change.
Design/methodology/approach – Data were collected from 196 executives of National Bank of Pakistan at
Time 1 (pre-implementation) and Time 2 (post-implementation) with the temporal research design. Multiple
regression analysis is used to test the direct effect; Preacher and Hayes (2004) test is applied to measure the
mediating effect and guidelines of Aguinis (2004) are followed for analyzing the moderating effect.
Findings – The result of the direct effect shows that both KM strategies have significant positive effect
on successful change implementation. Further, mediation analysis proves that readiness for change partially
mediates between KM strategies and successful change implementation. In addition, partial interactive effects
of employee cynicism is observed between readiness for change and successful change implementation.
Research limitations/implications – The management should initiate steps to boost personalization and
codification strategies at their optimal levels. This would ultimately be helpful to implement a successful
change through developing readiness for change and reducing the employee cynicism regarding change.
Originality/value – The area of successful change implementation in the context of KM strategies was
untapped, and is examined in this study.
Keywords Readiness for change, Employee cynicism, Knowledge management strategies,
Successful change implementation
Paper type Research paper

Introduction
Dynamism for organizations prevails in local and global markets that ultimately become the
cause for maintaining a constant change to align organizations with market demands
and remain alive in the respective industry (Elrod and Tippett, 2002). Change is the only
phenomenon that is constant in all types of vital organizations as organizations are
continually changing their strategies, culture, structure and processes to line up with their
capabilities within the industry (Batra, 2016; Wu et al., 2011). Additionally, change becomes
an essential element of day-to-day life of the organizations in trade-free zones (Brown and
Cregan, 2008). Therefore, change gathered a considerable attention from the academia as
well; researchers theoretically and empirically tested change theories that are based on their
cultural, rational, political and technical nature (Finney and Corbett, 2007; Jones et al., 2005;
Diclemente et al., 2004; Tenkasi and Chesmore, 2003; Adil, 2016). Further, every change
faces cynicism, organization wide and employee oriented, from the planning to the
implementation phase (Eby et al., 2000). Likewise, if employee cynicism persists long time in
the transition phase of change, it will lead to failure in implementing change as employees
Journal of Enterprise Information
are performing two main functions in organizations: decision-making and information Management
sharing (Weick and Quinn, 1999). Therefore, previous literature showed a considerable Vol. 30 No. 2, 2017
pp. 335-351
thought to address the intellectual capital traits toward change (Andersson, 1996; Bommer © Emerald Publishing Limited
1741-0398
et al., 2005; Maimone and Sinclair, 2014). DOI 10.1108/JEIM-10-2015-0095
 JEIM Hence, to see the importance of change, organizations emphasized on the pre-implementation
30,2 phase of change and articulated the issues that cause failure to change implementation
(Diclemente et al., 2004; Beycioglu et al., 2014). Here, readiness for change was recognized as a
major factor that has maximum variation toward change implementation (Carlon et al.,
2012). Readiness for change can perform the key role for successful implementation of
change through addressing motivation for change, proper disclosure of change benefits
336 toward staff growth, and adequacy of resources for proper implementation of change
(Lehman et al., 2002). Additionally, readiness for change phase took its time due to its
importance toward successful implementation of change and also emphasized on effective
information sharing that is beneficial for the change process (Cunningham et al., 2002).
Likewise, through proper and timely information sharing regarding risks and benefits
associated with anticipated change, employee cynicism can be reduced and change is
implemented as anticipated (Eby et al., 2000).
For the creation of effective readiness for change, the role of change initiators and
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implementers has been utmost vital (Soriano et al., 2012). Additionally, their knowledge
level regarding the parameters of change and what knowledge management (KM) strategy
they opt to disseminate their knowledge regarding change is also important (Diclemente
et al., 2004). Either, they personally visit employee-to-employee or in group form, elaborate
material regarding change, and facilitate the employees until they used to do work in the
changed environment, which is known as personalization strategy (Hansen et al., 1999;
Scheepers et al., 2004; Ajith Kumar and Ganesh, 2011). Conversely, they communicate
the change process centrally and through handouts regarding the change by which
employees get information and implement change, which is called the codification
strategy (Hansen et al., 1999; Scheepers et al., 2004; Ajith Kumar and Ganesh, 2011).
Further, researchers theoretically found that many organizations adopted an optimal mix
of KM strategies, personalization, and codification to respond to a particular situation
(Cole et al., 2006).
In the view of the extant literature, lack of adequate knowledge at the planning phase of
change restricts its further viability and if these types of change are formed and
implemented then may lead to failure (Hansen et al., 1999). Inspite of its significance, a rare
work is done on KM in the context of change; however, some researchers found a facilitating
link of KM tools toward effective change (Burton-Jones, 2001; Pan and Scarbrough, 1999;
David and Fahey, 2000; Davenport and Guest, 2001), but no one checked the direct or
indirect effect of KM strategies on successful change implementation.
Considering this gap, this paper strives to profile the potential impact of KM strategies,
personalization and codification, on successful change implementation. Further, researchers
have examined the benefits of these two KM strategies in the change process of an
organization. This paper also tests empirically the extent of which readiness for change
mediates the relationship between KM strategies and successful change implementation.
Further, this study examines whether employee cynicism moderates the relationship
between readiness for change and successful change implementation. This research
introduces a new mantra for organizations regarding successful change implementation
through effective use of KM strategies and contributes to change without pain.

Literature review
Readiness for change
A historic study by Armenakis et al. (1993), theoretically expressed the concept of readiness
for change as the perception of employees toward change and their attitudes, behaviors and
intentions regarding prospective change. Armenakis et al. (1993) differentiated the concepts
of readiness for change and resistance to change in an organizational context and explained
the importance of readiness for change to cope up with the problems of resistance to change.
 After them, other researchers analyzed the vitality of the readiness for change in the context Knowledge
of expected and on-going change (Hunter and Timme, 1991; Cunningham and Hyman, 1995; management
Mcnabb and Sepic, 1995; Armenakis and Bedeian, 1999; Weick and Quinn, 1999; Eby et al., strategy
2000; Cunningham et al., 2002; Diclemente et al., 2004; Brown and Cregan, 2008; Latta, 2015;
Carlon et al., 2012). Readiness for change is not easy for organizations (Brown and Cregan,
2008), Likewise, it becomes a complicated task in the current dynamic era when change is
going to take place at every moment ( Jones et al., 2005). When we are concerned with 337
readiness for change, then, it is worth mentioning here that this phase is different from
business to business and from industry to industry (Adil, 2016). Volatility of business
decides the time span of readiness for change phase, more volatile a business the lesser the
time needed for readiness for change phase and vice versa. Jones et al. (2005) worked out the
ratio of successful change implementation and role of readiness for change phase and
suggested that if readiness for change phase is truly organized, it will definitely lead to
successful change implementation. Although, there is great significance of readiness for
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change toward change implementation, organizations are confused about how to maintain
proper readiness for expected change (Lehman et al., 2002).

KM strategies and readiness for change

KM is not a new subject in the business world but the current era gives this name to some
old practices, i.e. when a goldsmith gave training to his son, today we know this practice as
personalization strategy and small business plans were shared through letters, which is now
termed as codification strategy (Hansen et al., 1999). Knowledge has two broad types: tacit
knowledge, which is the intellectual one and property of the individuals; and the other one is
explicit knowledge, which is publically available in published form. There are two main
strategies of KM discipline i.e. personalization and codification (Ajith Kumar and Ganesh,
2011; Earl, 2001; Scheepers et al., 2004). KM strategies, personalization and codification,
revolve between these two types of knowledge (Ajith Kumar and Ganesh, 2011).
Personalization strategy used people-to-people method for exchange of knowledge and it is
a very old method (Davenport and Guest, 2001; Hansen et al., 1999). On the other hand,
codification strategy used people-to-document and document-to-people strategy.
In codification strategy, a central repository is used to collect all relevant information
and all authorized is free to access this repository any time (Hansen et al., 1999; Scheepers
et al., 2004). Different studies have explained KM strategies as of two types; codification and
personalization (Hansen et al., 1999; Scheepers et al., 2004). Moreover, Earl (2001) and
Desouza and Evaristo (2004) explained a hybrid approach for managing knowledge in
organizations instead of relying on a single strategy. Scheepers et al. (2004) have developed
a model of organizational capabilities through KM strategies. Readiness for change is a form
of organizational capabilities that gives a platform to the management to implement change
with less resistance (Elrod and Tippett, 2002).

Successful change implementation, KM strategies, and readiness for change

Without question, the most important for organizations is to implement change in an effective
manner during the change process (Armenakis and Bedeian, 1999). Successful change
implementation refers to the state, after transition phase, at which organizations are capable of
doing routine tasks as they were doing previously before applying change (Armenakis and
Bedeian, 1999; Beycioglu et al., 2014; Jacobs et al., 2013). Implementing change depends on
various factors i.e. how employees perceive change, employees’ reaction to change, change
cynicism, intellectual capability of the change agents and organizational infrastructure
(Cunningham and Hyman, 1995; Finney and Corbett, 2007; Jones et al., 2005).Likewise,
execution of change really matters when organizational context is dynamic because
organizations have to execute this step in their routine work (Weick and Quinn, 1999).
 JEIM Additionally, the importance of expected change increases the intensity of implementation
30,2 (Finney and Corbett, 2007). On the other hand, intellectual capability of organizations is
really important for effective change implementation. Likewise, the knowledge resources
and the skills and competencies of change implementers the organization has, have a
positive association with successful change implementation (Scheepers et al., 2004).
KM strategies provide numerous tools to develop a positive change and its useful
338 implementation. KM strategies work by providing guidance to human resource either
person-to-person or person-to-document to understand the expected change and for
its rigorous implementation (Hansen et al., 1999). Jones et al. (2005) explained the worth
of readiness for change in a change process and its ultimate benefits at the time of
change implementation.
In this study, successful implementation of change was operationalized on the basis of
system usage and user satisfaction as both are the basic criteria for measuring the success
of a change process. Jones et al. (2005) defined user satisfaction as the extent to which the
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user is satisfied from the new system and system usage means how much effort is required
to interact with the new system. The complete analysis of these two, system usage and user
satisfaction, gives a clear picture of success of the current change process. On the basis of
the above discussion, the following hypotheses are drawn:
H1. Personalization strategy has a positive impact on successful change implementation.
H2. Codification strategy has a positive impact on successful change implementation.
H3. Readiness for change mediates the relationship between personalization strategy
and successful change implementation.
H4. Readiness for change mediates the relationship between codification strategy and
successful change implementation.

Employee cynicism, readiness for change and successful change implementation

Andersson (1996) in his well-validated research on employee cynicism, defined it as the
degree of resistance and dislike position resulting from hopelessness, disillusionment and
frustration from the employee side that cause harm to an organization. In the last two
decades, employee cynicism attained extensive attention of researchers (Andersson, 1996;
Hansen et al., 1999; Fui-Hoon Nah et al., 2001; Elrod and Tippett, 2002; Brown and Cregan,
2008; Chiaburu et al., 2013) due to its significance in organizational routine matters that
ultimately leads to overall success of organizations. Fundamentally, employee cynicism is
the outcome of losing a comfort zone that was the strength of a particular
employee (Brown and Cregan, 2008; Chiaburu et al., 2013; Nesterkin, 2013; Neves, 2012).
Bommer et al. (2005) argued that the effects of cynicism have detrimental reflections on
employee motivation and employee performance in a particular context. Over time,
the meaning of employee cynicism has refined and researchers bifurcated cynicism
responses with non-cynicism responses of employees (Brown and Cregan, 2008;
Mcnabb and Sepic, 1995; Li et al., 2011). Lehman et al. (2002) suggested that the maximum
part of developing readiness for change deals with removing the bottlenecks of expected
employee cynicism.
The literature regarding organizational and employee cynicism has made it
evident that cynicism can create an interactive effect (Hochwarter et al., 2004;
Neves, 2012; Li et al., 2011; Barton and Ambrosini, 2013; Shahzad and Mahmood, 2012;
Brandes et al., 2007) on different organizational variables i.e. work-deviant behavior,
job-related outcomes, organizational commitments, business strategy and employee
turnover attention. Likewise, Stanley et al. (2005) explained that employee cynicism is one
of the main resistors to organizational change. The critical discussion on employee
 cynicism, readiness for change and successful change implementation have arrived at the Knowledge
following hypothesis: management
H5. Employee cynicism moderates the relationship between readiness for change and strategy
successful change implementation.

Research methodology 339

Organizational setting
National Bank of Pakistan (NBP), a large public sector bank of Pakistan, which has
implemented a new operating system named as Core Banking Application (CBA) or profile a
year prior provided the circumstance for the current research. In this bank, the management
has categorized branches as Category I, II, III, on the basis of the number of employees.
Category I branch consists of 1-5 employees, Category II 6-15 and Category III 16 or more.
The management is planning to implement this operating system into three phases. In the first
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phase, it is implemented on Category III branches, then in the second phase on Category II, and
lastly in Category I branches. The implementation phase is prolonged due to some various
technical problems. The implementation of the new operating system would probably influence
all officers and executives of bank as they have to work with this system (Figure 1).

Research design
Depending on the nature of the study, temporal research design is used as defined by
Ancona et al. (2001) in which predicting variables (KM strategies and readiness for change)
are measured at Time1 (T1) before implementation and outcome and moderating variables
(employee cynicism and successful change implementation) were measured at Time2 (T2)
during and after change implementation. The employees are using CBA at T2 and can
better elaborate their satisfaction level and system usage. The beauty of the temporal design
is that it can measure the data at different levels and can minimize the common variance
arises when we get data simultaneously at a point in time but cannot overlook the causality
inference (Zapf et al., 1996).

Research philosophy and approach

The present research is emphasized on the positivistic approach in which deductive
reasoning is used for formulation and testing of hypotheses. Robson (2002) highlighted the
importance of positivistic approach in cross-sectional explanatory and temporal studies and
further explained the procedure how hypotheses can be formulated and tested under the
given literature. In the current study, positivistic approach is used as recommended by Dubé
and Paré (2003), with the help of adequate literature on KM strategies, readiness for change,
employee cynicism and successful change implementation.

Employee
Knowledge Cynicism
Management Strategies

Personalization
Strategy
Readiness for Successful Change
Change Implementation
Codification
Strategy Figure 1.
The research model
 JEIM Sampling procedure and features
30,2 The total number of employees of NBP is 16,129, of which 13,928 employees belong to officer
and executive cadres that are directly or indirectly using the new operating system i.e. CBA.
A total sample of 386 is selected on the basis of a given population through the sample size
calculator[1] and in line with the previous studies ( Jones et al., 2005; Scheepers et al., 2004;
Ajith Kumar and Ganesh, 2011). The questionnaires are distributed to 386 randomly
340 selected employees of branches where the new operating system is about to implement
through internal courier arrangements at T1, which are fast and accurate with the request to
send these back after incorporating their views. After engaging all means (phone call and
e-mail) to increase the response rate, only 243 employees responded their views at T1.
At this stage, the response rate was 63 percent, which was better to measure the given
variables. After implementation of change at T2 (six weeks after T1), 243 employees are
recontacted through another questionnaire to obtain their views regarding employee cynicism
and user satisfaction. Using the suggestions of Jones et al. (2005) and actual timeframe given by
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the management of NBP to employees for completely implementing change; a six-week time
period is selected for the second response. Then 196 employees returned their questionnaires
that reflect 81 percent response rate at T2. The overall response rate is 51 percent at both T1
and T2 and these 196 questionnaires are used for the analysis.

Data analysis strategies

Different types of analysis are used in this study to elaborate the exposition. First of all,
reliability and exploratory factor analysis is used to see the authenticity of the data.
The descriptive analysis is used to describe the demographic position of the given
population. Moreover, regression and correlation tests are applied to check the hypotheses.
Preacher and Hayes (2004) test is applied to check the mediation effect of readiness for
change. Aguinis (2004) test is used to explain the moderating effect of employee cynicism
between readiness for change and successful change implementation.

Measures
Multi-item scales that are already developed and tested are used to measure the constructs.
The reliability of the scales is tested using Cronbach’s (1951) coefficient value and is shown
in Table I, which reflects the internal consistency of the constructs.

Codification strategy
Codification strategy is the first KM strategy (expert-to-document) that is measured on the
basis of scale developed by Ajith Kumar and Ganesh (2011). The five-item scale is adopted
and then adapted to measure the codification strategy. After first 50 responses, exploratory
factor analysis (EFA) is done and from five items, only three items are loaded at Factor 1 as
elaborated in Table II. The reliability of the remaining three items are 0.645 (α value), which
is adequate according to Hair et al. (2006).

Scale descriptions Total items α

Personalization strategy 4 0.690

Codification strategy 3 0.645
Readiness for change 3 0.639
Table I. Employee cynicism 4 0.691
Reliability coefficient Successful change Implementation 8 0.789
Cronbach’s (1951) Notes: George and Mallery (2003) highlighted the ranges of reliability. e.g. ⩾ 0.9excellent; ⩾ 0.8 ⩾ Good;
α value ⩾ 0.7 acceptable; ⩾ 0.6 questionable; ⩾ 0.5 poor; o 0.5 unacceptable
 Factor 1 Factor 2 Factor 3 Factor 4 Factor 5
Knowledge
management
Review meetings for work and new ideas 0.765 strategy
Sharing (by an experts) his learning and experiences 0.677
Forming groups to share knowledge and ideas 0.612
People directory for employees with a given expertise 0.734
Writing and documenting that are gained during work 0.628
Writing/audio/video the experiences narrated by experts 0.811 341
Recording data, drawings and happenings 0.654
Noticed people mentally withdrawing in my group 0.591
There is a cynical atmosphere in my work group 0.788
The communication in my group not positive 0.661
People work in isolation from one another 0.764
Openness to work more because of the change 0.823
Openness to find ways to make the change fail 0.698
My willingness or openness to support change 0.634
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Are you satisfied with the system? 0.658

Does the system address the information you need? 0.732
Does the system just about exactly what you need? 0.734
Does the system provide sufficient information? 0.768
Are you satisfied with the accuracy of the system? 0.659
Is the system user friendly? 0.729 Table II.
Do you get the information you need in time? 0.762 Exploratory factor
Does the system provide up-to-date information? 0.586 analysis

Personalization strategy
The second KM strategy is personalization strategy (expert-to-employee) that is also
measured on the basis of scale developed by Ajith Kumar and Ganesh (2011). The scale is
adapted according to the context of the current study and with the collaboration of the
banking experts. Initially, the five-item scale is adopted and after conducting EFA, four items
are selected for the final questionnaire as per factor loading (see Table II). The reliability of the
finally selected four statements was 0.690, which is also adequate (see Table I).

Readiness for change

Readiness for change that is the mediating variable of the current study is measured on the
basis of impressive scale developed by Madsen et al. (2005). After conducting EFA, it is
found that all three items are loaded and used for the final questionnaire. The scale
comprises two direct and one reverse statement to measure the readiness for change.
The internal consistency is also sufficient as the α value is 0.639 (see Table I).

Employee Cynicism
The level of employee cynicism is measured on the basis of scale developed by Cole et al.
(2006). Basically, it is a five-item scale to measure the intensity of employee cynicism
prevailed in an organization during change. After conducting EFA, these items reduced to
four statements that are adequately loaded at Factor 1. The reliability analysis is conducted
before the data analysis and it is found adequate, i.e. 0.691.

Successful change implementation

Successful change implementation is measured on the basis of user satisfaction scale
developed by Doll et al. (1994) with respect to change that is implemented by NBP. Presently,
NBP is implementing a new operating system, the validity and accuracy of the system is
measured by users and how much they are satisfied from the current system. The user
 JEIM satisfaction scale developed by Doll et al. (1994) has accurately measured the success of the
30,2 new operating system. A 12-item scale is adopted and the initial screening is done through
EFA and only eight items are loaded that become part of the final questionnaire and used to
get responses from employees and executives of NBP. The final reliability of the scale is
0.789, which is also adequate.

342 Results and analysis

This case study is conducted on NBP. The main characteristics of the selected sample consists
of 167 men and 29 women having percentages of 85.2 and 14.8 percent, respectively,
which clearly indicate that NBP is a male-dominant financial institution. This sample
characteristic also verifies the overall gender position of NBP. The key respondents of the
current study are officers and executives who are directly affected by the new operating
system. The representative sample consists of 111 executives and 85 officer cadre employees
having 56.6 and 43.4 percent representation, respectively, which is approximately an equal
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mixture of both the stakeholders. The experience really matters while change is planned and
implemented and it is observed that employees having more experience have more resistance
level. The current sample includes 41 respondents with 1-5 years of experience, 126 with
6-10 years, 22 with 11-15 years and seven with 16-20 years of experience. The experience
profile of the respondents is positive because most of the respondents are below the experience
level of 10 years. With respect to age, maximum respondents lie between 20 and 30 years and
having a master’s or an equivalent degree.

Reliability analysis
The foremost preliminary analysis is reliability analysis that is performed on the received
structured questionnaires by extracting Cronbach’s α values. Previous studies have
suggested that for a healthy data analysis these α values of constructs should have good
internal consistency (Hair et al., 2006). In the perspective of acceptable internal consistency,
George and Mallery (2003) explained that Cronbach’s α value of more than 0.6 is acceptable
and reliable for data analysis. It is found that the internal consistency of all the constructs
lies within 0.6 to 0.8 which meet the acceptable standards.

Validity analysis
As earlier, in the methodology portion of the study, it is discussed that all the measurement
scales are adopted and then adapted as per the real context of this study with the
collaboration of banking experts. Here, factor analysis test becomes mandatory to examine the
construct and convergent validity of the scales (Cudeck, 2000). In the initial stage, factor
analysis is done at 50 responses (both at T1 and T2) and the results have shown that Factor 1
regarding personalization KM strategy has five items but four items are loaded. Also,
codification KM strategy has initially five items but three items are loaded at Factor 2, while
employee cynicism has five items and four items are loaded at Factor 3. However, Factor 4 is
reflecting that all the statements of readiness for change are retained successfully. Successful
change implementation is measured on the basis of user satisfaction toward the CBA (profile)
software and eight items are load out of 12 items. Kaiser-Meyer-Olkin and Bartlett’s test were
also significant which show the sample adequacy for factor analysis.

Descriptive statistics analysis

In Table III, descriptive statistics and correlation analysis are applied to extract the
general tendency of the data and strength of relationship among variables. The mean value
shows an overall positive trend and reflects a curve that might be positively
skewed. Further the standard deviation of the data showed a deviation of approximately
 1.00 from the mean which is normal in social sciences data. By using Pearson’s correlation Knowledge
analysis it is found that there were medium and strong relationships among variables management
(Cohen et al., 2013) (Table IV). strategy
Hypothesis testing
Multiple regression analysis is done to examine H1 and H2 acceptance/rejection; it is
found that there is a positive relationship between KM strategies and successful 343
change implementation. Also, the model significance value is p o 0.01 at 99 percent
confidence value and the R2 value shows that there was 51 percent variation
found in successful change implementation due to the KM strategies. Furthermore,
ANOVA test is also significant having an F-value of 98.44. The in-depth analysis showed
that personalization strategy is more effective to implement a change successfully
( β ¼ 0.62, t ¼ 10.87, p o 0.001) in comparison with codification strategy ( β ¼ 0.17, t ¼ 2.90,
p o 0.01) (Table V).
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Variable Description Mean SD 1 2 3 4 5

(1) Personalization strategy 3.37 1.09

(2) Codification strategy 3.37 1.14 0.458
(3) Readiness for change 3.47 1.08 0.690 0.378
(4) Employee cynicism 2.65 0.97 −0.416 −0.315 −0.466 Table III.
(5) Successful change implementation 3.45 0.98 0.695 0.449 0.637 −0.432 − Descriptive statistical
Notes: All the values of correlation from 1 to 5 variables are significant at 0.01 level analysis

Description PS-CS and CI

R2 0.51
Adjusted R2 0.50
Model significance 0.000
F-value 98.44
PS and CI CS and CI
Standardized β 0.62 0.17
t-value 10.87 2.90
Significance value 0.000 0.004 Table IV.
Notes: PS, personalization strategies; CS, codification strategies; CI, change implementation. Significance Multiple regression
level po 0.01 analysis

Statistical descriptions A-Path1 X-M B-Path1 M(X)Y C-Path1 X-Y C’-Path1 X(M)-Y

Unstandardized β 0.686 0.251 0.578 0.406

p-value 0.000 0.000 0.000 0.000
t-value 13.27 4.40 13.47 7.18
R2 0.530
Table V.
Adjusted R2 0.526
Mediation test
Significance value 0.000 (personalization
F-value 108.99 strategy, readiness for
Notes: X, personalization strategy; M, readiness for change; Y, change implementation. 5,000 times change, change
bootstrapping for mediation test on 95 percent confidence level. *p o0.05; **po 0.01; ***po 0.001 implementation)
 JEIM Mediation analysis
30,2 To test the mediation of readiness for change in between personalization strategy and
change implementation, Preacher and Hayes (2004) test is applied as it is preferable to test
mediation in one go. The results of A-Path1 have shown that there is a positive relationship
between personalization strategy and readiness for change ( β ¼ 0.686, t ¼ 13.27, p o0.001).
Further, B-Path1 confirms a positive relationship between readiness for change and change
344 implementation with ( β ¼ 0.251, t ¼ 4.40, p o0.001). Similarly, C-Path1 confirmed a positive
impact of personalization strategy on change implementation (β ¼ 0.578, t ¼ 13.47,
p o0.001) and C’-Path1 also confirms the mediation effect of readiness for change
(β ¼ 0.406, t ¼ 7.18, po 0.001). While comparing C&C’-Path1 it is found that the β value has
slightly decreased when the mediation effect is tested, which is evidence of partial
mediation. Moreover, the overall results are also significant with an R2 value of 53 percent
and ANOVA value of 108.99 (Table VI).
All the assumptions of mediation were tested and found significant in A-, B- and
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C-Paths2 as per the standard defined by Preacher and Hayes (2004) in their study.
The results of indirect effect of codification strategy on readiness for change and successful
change implementation also suggested partial mediation as β and t values of C’-Path2 are
less than the β value of C-Path2 ( β ¼ 0.190, t ¼ 4.24, p o0.001 ( β ¼ 0.358, t ¼ 7.00,
p o0.001)). The overall model analysis is also significant with an R2 value of 46 percent and
having ANOVA statistic value of 80.84 (Figure 2 and Table VII).

Statistical descriptions A-Path2 X-M B-Path2 M(X)Y C-Path2 X-Y C’-Path2 X(M)-Y

Unstandardized β 0.361 0.460 0.358 0.190

p-value 0.000 0.000 0.000 0.000
t-value 5.69 9.49 7.00 4.24
R2 0.46
Table VI. 2
Adjusted R 0.45
Mediation test
(codification strategy, Significance value 0.000
readiness for F-value 80.84
change, change Notes: X, codification strategy; M: readiness for change; Y, change implementation. 5,000 times boot-
implementation) strapping for mediation test on 95 percent confidence level. *p o 0.05; **p o0.01; ***p o0.001

Readiness for
Change

1
A-Path 1
=0.685 B-Path
 = 0.251

2
B-Path
 = 0.460
Personalization 1
C(C’-Path )
Strategy  = 0.460 ( =0.578)

Successful Change
A-Path
2 Implementation
=0.361
2
C(C’-Path )
Figure 2. =0.190 (=0.358)
The revised Codification
mediation model Strategy
 Model 1 RC, EC and CI
Knowledge
R2 0.428 management
Adjusted R2 0.423 strategy
F-value 72.35
RC EC
β coefficient 0.56 −0.173
SE 0.05 0.058
t-value 9.05 −2.81 345
Significant value 0.000 0.005
Model 2 RC, EC, RC × EC and CI
R2 0.438
Adjusted R2 0.429
F-value 49.75
RC EC RC × EC
β coefficient 0.28 −0.47 0.315 Table VII.
Moderation test
SE 0.14 0.17 0.047
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(readiness for change,

t-value 1.07 −2.61 1.76 employee cynicism,
Significant value 0.01 0.01 0.04 successful change
Notes: RC, readiness for change; EC, employee cynicism; CI, change implementation. Significance level po0.05 implementation)

Moderation analysis
The moderating effect of employee cynicism is tested between readiness for change and
successful change implementation by using an interaction term and moderated multiple
regression (MMR) analysis (Aguinis, 2004). According to Aguinis (2004), two consecutive
models are formed to check the interactive effect of employee cynicism. In Model 1, the
assumptions of the moderator are tested; these assumptions are found accurate, then Model
2 of the interaction term is run. In Model 1, the direct effects of readiness for change and
employee cynicism are tested simultaneously on successful change implementation and are
found to be significant (β ¼ 0.56 and −0.173, t ¼ 9.05 and −2.81, p o0.001 and 0.01,
respectively). In-depth analysis showed a positive effect of readiness for change on
successful change implementation and negative effect of employee cynicism on successful
change implementation. The significant value of Model 1 sets the foundation for applying
the interaction term for MMR. After comparing the results of Models 1 and 2, the results
reflect a partial moderation effect of employee cynicism in between readiness for change and
successful change implementation and employee cynicism weaken the relationship between
readiness for change and successful change implementation ( β ¼ 0.28, −0.47 and 0.315,
t ¼ 1.07, −2.61 and 1.76 po 0.05). The overall model is significant with an R2 value of
43.8 percent and an F-value of 49.75 (Figure 3).

Results and discussion

The findings of this paper are based on three types of mechanisms: direct effect, mediating
effect, and moderating effect. The direct effect of KM strategies on successful change
implementation comprised H1 and H2, which describes how personalization and
codification strategies are helpful to implement the change successfully. The results have
shown that personalization, experts-to-employee, was more effective compared to
codification strategy (expert-to-document and document-to-user). In previous studies, it is
observed that the personalization strategy of KM has a greater impact as tacit knowledge
and can be understand more quickly in the socialization process (Hansen et al., 1999;
Pan and Scarbrough, 1999; Ajith Kumar and Ganesh, 2011). The significant positive results
of H2 provide evidence that codification strategy is also helpful to implement change
successfully, more specially, the nature of change has less magnitude of tacit knowledge and
 JEIM
30,2 Employee
Cynicism

346
 = 0.56  = 0.28, –0.47
and –0.17 and 0.32

Model1=R 2 = 0.428 Model1= R 2 = 0.438

Successful
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Readiness for Change

Figure 3. Change
The moderation model Implementation

emphasizes on explicit knowledge. Particularly, in the current scenario, when at once

experts implement a new operating system and run it at the branch level, the employees
are satisfied, but when experts have left and the branch user faces any difficulty, at that
time the codified knowledge provides them the solution. The importance of codified
knowledge has been discussed in various studies (Finney and Corbett, 2007; Desouza and
Evaristo, 2004; Scheepers et al., 2004; Earl, 2001).
The second mechanism is about the mediating role of readiness for change in between
KM strategies and successful change implementation that is measured through Preacher
and Hayes (2004) mediation test. Readiness for change sets a partial mediation role as
strategies, personalization and codification, developed an environment in which the
pre-implementation phase of change is emphasized. Readiness for change is a dominant
phenomenon used to implement change successfully (Fui-Hoon Nah et al., 2001;
Cunningham et al., 2002; Lehman et al., 2002; Jones et al., 2005). A comparison of H3 and
H4 has shown that the mediation role of readiness for change is more responsive to
personalization strategy while compared with codification strategy.
The third mechanism explained how employee cynicism moderates the relationship
between readiness for change and successful change implementation through Aguinis
(2004) analysis using the interaction term explained by Aiken et al. (1991). This critical
finding proved H5 and showed that employee cynicism is weakening the relationship
between readiness for change and successful change implementation. If the management
emphasized on employee cynicism during the change process and reduces it to the minimum
point, it will ultimately increase the chances of change implementation success. The current
finding elaborates on the view point of Andersson (1996), who indicated that if
organizations want to implement any change successfully, they have to restrict employee
cynicism to the minimum level.

Conclusion
Change is the only element in organizations that is constant and the reason to remain alive in
the uncertain global business environment. Organizations are continuously changing with
respect to their infrastructure, processes, people, management and technology. Likewise,
external adoption and internal integration of operating systems have become a necessity for
organizations to deal with the changing organizational conditions i.e. merger, acquisition,
 organizational renewal and transformation, and technological breakthroughs. The banking Knowledge
sector, all over the world, is continuously adopting new systems to meet the general management
and customized requirements of their consumers and business industry i.e. online service, strategy
real-time gross settlement, branchless banking, internet banking and ATM operations.
The management of financial institutions is facing resistance while planning and implementing
a new change because employees are not willing to shift from known to unknown. Not only
financial institutions but most of the MNCs are adopting new operating systems to mobilize 347
their trade nationally and internationally. This study explored a new vision to implement these
types of organizational changes successfully and get their early benefits using personalization
and codification KM strategies and also uncover the mediating effect of readiness for change.
KM strategies have a positive and direct impact on successful change implementation and
prepare for readiness to change as well. These are equally beneficial for reducing employee
cynicism regarding organizational change that will ultimately increase the chances of
successful change implementation. The results are equally valuable for other financial and
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non-financial organizations that are currently changing their ERP system.

Implications
This research has two types of major implications: first, it contributes to the theory of KM
and organizational change and described that personalization strategy has more promising
results as compared to codification strategy in the context of change. However, in past, rare
studies have so far been conducted to explore the impact of KM strategies on successful
change implementation with the interactive effect of employees’ cynicism. However,
different researchers have measured readiness for change and change implementation with
organizational culture, organizational commitment, reshaping capabilities, HRM practices
and social networks (Mcnabb and Sepic, 1995; Jones et al., 2005; Madsen et al., 2005; Tenkasi
and Chesmore, 2003). Therefore, this study extends the existing literature on KM strategies,
employee cynicism, readiness for change and successful change implementation.
Second, this study has practical orientation in the existing scenario of the organization
under study because this study can be helpful to implement change successfully in the
remaining branches. From the perspective of successful change implementation, change
leaders of organizations (financial or non-financial) have to develop trainers, who can give
personalized services to their employees and executives. Personalization KM strategy has
more influence on change implementation than the traditional codification strategy.
Codification strategy is more paper-based rather than understanding the nature of problem
and the level of their employees. The recommendation of this study is equally beneficial for
this type of change in other financial and non-financial organizations.

Limitations and future directions

The results of this study provided informative findings to the management of financial
institutions, practitioners and researchers that are working on the integration of change and
KM. However, a caution must be marked before generalization. Particularly, a low response
rate of 51 percent (196 officers and executives) has restricted the generalizability of this
study in other sectors. In future, all means can be utilized to raise the response rate to
examine the same type of conceptual research models. Second, the respondents have not
participated at T2 and their participation can change the results. Furthermore, the results of
this case study may not be generalized to other financial and non-financial institutions on an
equal basis. In future, more than one organization should be included, more importantly, a
mix of public and private sector organizations is preferable.
The final limitation of this study is the extensive time span i.e. a six-week gap between
T1 and T2. This is comparatively a short span of time in temporal studies that focus on the
implementation of a new operating system. Baronas and Louis (1988) have conducted a
 JEIM longitudinal study comprising an eight-week time period during the implementation of the
30,2 new operating system and Venkatesh and Davis (2000) have conducted a longitudinal study
of the technological acceptance model at four point in time that was composed of one to
five months. In future, it is recommended to increase the time span between T1 and T2 to
find the concrete evidences in the context of organizational change.

348 Note
1. The sample size calculator is used in the following statistical formula for sample
size calculation: x ¼ Z ðc=100Þ2 r ð100r Þ; n ¼ N x=ððN 1ÞE 2 þxÞ; E ¼ Sqrt½ðNnÞx=nðN 1Þ
where N is the population size; r is the fraction of responses that you are interested in; and Z(c/100)
is the critical value for the confidence level c.

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Corresponding author
Muhammad Kashif Imran can be contacted at: kkaasshhii@gmail.com

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