Knowledge Management Supportive Human Resource Environment

ABSTRACT

The successful implementation of knowledge management (KM) can provide the capability to
understand the market, accurately assess the customers' needs, and turn them into products and
services by integrating organizational resources. Since organization's knowledge is personal,
building of organizational knowledge is unthinkable without employees. This study has two
objectives. One is to identify differences between the perceived importance (organizations without
KM) and the actual importance (organizations with KM) attributes for successful KM
implementation. The other is to develop and empirically examine the knowledge supportive human
resource (HR) factors affecting the success of KM From the results of statistical analysis, important
generalizations are suggested Attributes with lower degree of perceived importance were
implemented less frequently and Top Management Support is a critical factor for KM success.

1. INTRODUCTION

Knowledge Management (KM) includes the process of discovery, creation, dissemination, and
utilization of knowledge. For successful implementation of KM program, executives and managers
need to understand the various organizational aspects including organizational structure, culture,
human resource, and technology. Especially, human resource became one of the critical factors for
effective KM. Organizational knowledge must be created based on each employee's knowledge. That
is, organizational knowledge is personal and building of organizational knowledge is unthinkable
without employees. As numerous organizational studies have recommended, KM supportive human
resource (HR) environment has been a key to success factor for KM program. However, little
empirical research has been conducted on this issue. Moreover, there has been no investigation as to
how organizations that have not been engaged in KM perceive success factors of KM differently
than organizations that have implemented KM. Thus, there are two objectives of this study. First is
to identify differences between the perceived importance (organizations without KM) and the actual
importance (organizations with KM) attributes for successful KM implementation. The second
objective is to develop and empirically examine the HR factors affecting the success of KM.

2. LITERATURE REVIEW

Studies from various disciplines have identified several key HR variables for the success of KM The
findings by leading KM researchers are major sources that can be used to identify the critical success
factors of KM. Numerous studies point out the importance of training in KM. Training should
provide employees and managers the skills and information to fulfill their responsibilities. One of
the reasons for the failure in effective work behaviors would be insufficient training to support KM
principles. Well-engineered training initiatives help to retain knowledge within the organization.

Employee involvement describes how all employees can contribute effectively to meeting the
organization's objectives. Employee involvement is one of key factors in successful KM
implementation because the nature of knowledge creation and sharing is unthinkable without
employee involvement.

The transformation to a knowledge-based organization requires peer-to-peer collaboration. That is,

teamwork is an essential source of the knowledge generation process. Creating teams allows
organizations to apply diverse skills and experiences towards its processes and problem-solving An
organization's members must work together and build on each other's ideas and strengths. Anyone
who has knowledge and interest in a problem should be included on the team.

Employee empowerment is also a key factor for KM success because true empowerment can give
the employees a sense of ownership in the overall aim of the organizational KM system. Employers
can value their employees' expertise through empowerment (Martinez, 1998). Further, employers
can tape into employees' knowledge and help them communicate their knowledge by creating ways
to capture, organize, and share knowledge.

For successful KM project, the visible leadership and commitment of top management must be
sustained throughout a KM effort because effective knowledge creation is not possible unless leaders
empower employees and show a strong commitment to the organization. That is, top management
must be willing to communicate with employees to make knowledge realistic and coordinate KM
implementation process. To exert their leadership and commitment in implementing a KM project:
(1) they must have sufficient knowledge; (2) they must have realistic expectation of KM results; (3)
they must communicate with employees; and (4) they must have the ability to coordinate the
different interests of functional units involved in the KM implementation process.

3. RESEARCH DESIGN

The sampling frame for this research consisted of the U.S. firms listed in the Gallup Organization's
client database. A total of 1000 questionnaires were distributed. The number of returned
questionnaires was 220. Among the returned questionnaires, three responses were unusable because
too many values were missing. Thus 217 responses were used for the data analysis.
Statistical analyses were conducted using the Statistical Package for the Social Sciences. Descriptive
statistics were calculated for all variables. Paired t-tests were used to identify differences between
the perceived importance and the actual importance attributes. Multiple regression analysis was
conducted to determine the relationships between the five factors from HR and the overall
perception of KM. For this statistical test, the level of significance (alpha) was set at 0.05.

The questionnaire consists of two sections. The first section of the questionnaire asked 18 questions
about perceived importance and actual importance for KM implementation. In the second section,
widely recognized KM related items were presented to identify the HR success factors of KM. They
were also asked whether or not organizations have already implement KM. 59 responding
organizations states that they have started to implement KM as shown in Table 1.

Based on the literature review, five hypotheses and the research model in figure 1 were proposed.

H1: A higher level of employee training is positively associated with the success of KM project.

H2: A high degree of employee involvement is positively associated with the success of KM project.

H3: A higher level of teamwork is positively associated with the success of KM project.

H4: A higher degree of employee empowerment is positively associated with the success of KM
project.

H5: Strong top-management leadership and commitment is positively associated with the success of
KM project.

4. ANALYSIS AND RESULTS

This section provides statistical analysis and findings. The findings are presented in the following
order: the difference between the perceived importance and the actual importance for successful KM
implementation, and the measurement of KM success.

4.1 Comparison of Perceived Importance and Actual Importance

Table 2 illustrates the mean scores of the degree of importance and the degree of actual importance
for 15 human resources attributes concerning KM. Attributes are presented by the descending order
of mean scores of perceived importance.
The degree of perceived importance held by respondents for human resource attributes of KM
ranged from 3.72 to 4.71 with a group mean rating of 4.26 + 0.54 (5 = very important, 3 =
moderately important, 1 = not important). The highest rated human resource attribute of KM was "A
spirit of cooperation and teamwork," with a mean rating of 4.71. Other attributes that received higher
perception of importance by managers included "Promote employee ownership and workmanship
(M = 4.53)" and "Top management encouragement toward formal/informal communication (M =
4.49)." The lowest rated attribute was "Knowledge management awareness training to non-
supervisory employees," with a mean rating of 3.72; however, this still lies between moderately
important and important. Other attributes receiving lower ratings were "Encouraging knowledge
creating teams such as knowledge task force, the future group, or learning group (M = 3.78)" and
"Providing the employees with adequate information of knowledge management related principles
through training (M = 3.85)."

The degree of actual importance of KM for human resource attributes ranged from 2.35 to 3.40 with
a group mean rating of 2.90 [+ or -] 0.77 (5 = extensively implemented, 3 = moderately
implemented, 1 = not implemented). The human resource attribute that was mostly implemented was
"Top management encouragement toward utilization of the knowledge management system," a mean
rating of 3.40. "Encouraging employees to participate in internal and external new learning
opportunities (M = 3.34)" and "A spirit of cooperation and teamwork (M = 3.33)" followed. The
attribute "A sprit of cooperation and teamwork" received higher perception scores in both
importance and implementation. The least implemented attribute was "Encouraging knowledge is
creating teams," with a mean rating of 2.30. Other human resource attributes that were less
implemented were "Knowledge management awareness training to non-supervisory employees" and
"Providing the employees with adequate information of knowledge management related principles
through training," both with mean ratings of 2.35.

Paired t-test was used to compare the degree of perceived importance with the degree of actual
importance. There were significant differences between the degree of perceived importance and the
degree of actual importance for all attributes (MD = 1.36, t = 24.480, p < 0.001). Attributes with
lower degree of perceived importance were implemented less frequently.

4.2 KM Success

Multiple regression analysis was conducted to examine the relationships of the five independent
variables (Top management leadership, teamwork, participation, empowerment, and training) with
KM success (table 3). The data show that the independent variable as a whole explained 7.2% of the
variance in the success of KM, significant at the 0.05 level. "Top management leadership" was
related to the success of KM, with a probability of 0.000. Therefore, H1 was accepted that "Top
management leadership" would be positively associated with the success of KM.

Other factors were not found to be positively associated with the success of KM. The factors of
"Teamwork, Participation, Empowerment, and Training" failed to support hypotheses H2, H3, H4,
and H5, respectively. However, "Teamwork" and "Participation" were related to the success of KM
if the significant level was expanded by the [alpha] level of 0.1.

5. CONCLUSION AND LIMITATION

The results of comparison between perceived importance and actual importance indicate that
attributes with lower degree of perceived importance were implemented less frequently. This result
is in line with the result in innovation studies like BPR and TQM. That is KM is another emerging
innovation and it shares similar success factors with BPR and TQM. It seems the executives for this
study are fully aware that a KM program needs fundamental organizational commitment as for other
innovations such as BPR and TQM. The relationship between each of the hypothesized actual
importance factors and KM success was tested by employing multiple regression analysis. The
findings of the analysis indicate that top management leadership and commitment is critical to KM
success. That is only organizations that are already engaged with KM implementation recognize top
management leadership and commitment as an enabling tool for the success of KM. This finding is
highly consistent with previous research results. On the other hand, one of the major limitations to
this study is the possibility of a biased perception of KM. As a means of organizational performance
improvement, KM has been publicized as a major tool or technique through the mass media as well
as various academic writings, including reports by major consulting companies. As a result, KM has
been viewed as a major catalyst for performance improvement without any assessment of the actual
impact of its implementation. Consequently, this exaggeration of circumstances may affect
managers' perception of KM principles and the actual usage of those principles.

TABLE 1: KM STATUS

Schedule Frequency (a) Percent (%)

Have already implemented 59 29.8

Within the next 2 years 82 41.4
More than 2 years from now 44 22.2
Probably never 13 6.6

(a) N=198
TABLE 2: MEAN SCORES OF DEGREE OF IMPORTANCE TOWARD HUMAN RESOURCES

Perceived

Attributes Mean (a)

[+ or -] SD

Top Management Leadership

Top management encouragement toward 4.49 [+ or -] 0.66
Formal/informal communication
Top management leadership and commitment 4.36 [+ or -] 0.80
Toward knowledge management
Top management encouragement toward 4.12 [+ or -] 0.84
Utilization of the knowledge management system
Teamwork
A spirit of cooperation and teamwork 4.71 [+ or -] 0.54
Supporting team-based approaches to problem- 4.41 [+ or -] 0.70
solving
Encouraging knowledge creating teams such as 3.78 [+ or -] 0.99
knowledge task force, the future group, or
learning group
Involvement
Actively encourage employee involvement in 4.41 [+ or -] 0.73
decision processes
Promote ongoing employee contributions 4.30 [+ or -] 0.71
A formal system that allows for contribution of 4.24 [+ or -] 0.83
every employee's opinions or suggestions
Empowerment
Promote employee ownership and workmanship 4.53 [+ or -] 0.72
Organizational commitment to empower people 4.46 [+ or -] 0.73
Organizational support to seek human values of 4.17 [+ or -] 0.85
employees
Training
Encouraging employees to participate in internal 4.26 [+ or -] 0.77
and external new learning opportunities such as
conferences, training seminar, university
courses, etc.
Providing the employees with adequate information 3.85 [+ or -] 0.94
of knowledge management related principles
through training
Knowledge management awareness training to 3.72 [+ or -] 0.93
non-supervisory employees
 Actual

Attributes Mean (b)

[+ or -] SD

Top Management Leadership

Top management encouragement toward 3.40 [+ or -] 0.97
formal/informal communication
Top management leadership and commitment 2.82 [+ or -] 1.03
toward knowledge management
Top management encouragement toward 2.59 [+ or -] 1.08
utilization of the knowledge management system
Teamwork
A spirit of cooperation and teamwork 3.33 [+ or -] 1.03
Supporting team-based approaches to problem 3.20 [+ or -] 1.03
solving
Encouraging knowledge creating teams such as 2.30 [+ or -] 1.12
knowledge task force, the future group, or
learning group
Involvement
Actively encourage employee involvement in 2.93 [+ or -] 1.03
decision processes
Promote ongoing employee contributions 2.84 [+ or -] 1.04
A formal system that allows for contribution of 3.00 [+ or -] 1.07
every employee's opinions or suggestions
Empowerment
Promote employee ownership and workmanship 3.08 [+ or -] 1.13
Organizational commitment to empower people 3.03 [+ or -] 1.16
Organizational support to seek human values of 2.88 [+ or -] 1.05
employees
Training
Encouraging employees to participate in internal 3.40 [+ or -] 0.97
and external new learning opportunities such as
conferences, training seminar, university
courses, etc.
Providing the employees with adequate information 2.35 [+ or -] 1.02
of knowledge management related principles
through training
Knowledge management awareness training to 2.35 [+ or -] 1.09
non-supervisory employees

(a) 5 = Very Important, 3 = Moderately Important, 1 = Not Important

(b) 5 = Extensively Implemented, 3 = Moderately Implemented,
1 = Not Implemented
TABLE 3. EFFECT OF FIVE CATEGORIES OF IMPORTANCE ON THE SUCCESS OF KM
PROJECT

Categories Standardized Significance Adjusted

Coefficient ([beta]) Level of Slope [R.sup.2]

Top Management
Leadership .277 .000 .072
Teamwork .133 .093
Participation .136 .084
Empowerment .033 .693
Training .081 .324

REFERENCES

Acton, T. and Golden, W., "Training the knowledge worker: A descriptive study of training practices
in Irish software companies". Journal of European Industrial Training, Vol. 27, 2003, 137-147.

Bartlett, C.A., et. al., "Building competitive advantage through people". MIT Sloan Management
Review, Volume 43(2), Winter 2002, 34-41.

Cohen, S. and Backer, N., "Making and mining intellectual capital: Method or madness?” Training
& Development, Vol.53 (9), 1999, 46-50.

Davenport, T. and Grover, V., (2001), "Special issue: Knowledge management", Journal of
Management Information Systems, Vo1.31 (1), 2001, 7-10.

Dess, G. and Picken, J., "Changing roles: Leadership in the 21st century", Organizational Dynamics,
Vol.28 (3), 2000, 18-34.

Greengard, S., "Will your culture support KM?” Workforce, Vol.77 (10), 1998, 93-94.

Lesser, E., et. al., "Preserving knowledge in an uncertain world". MIT Sloan Management Review,
Vol 43(1), Fall 2001, 101-2.

Martinez, M., "The collective power of employee knowledge", HR Magazine, Vol.43 (2), 1998, 88-
94.