KNOWLEDGE MANAGEMENT

Knowledge Management

Knowledge Management

Introduction

Knowledge management significantly influences strategy formulation and implementation (Grant, 1996a; Conner and Prahalad, 1996; Zander and Kogut, 1995). Whilst the literature reveals a diverse range of knowledge management definitions and perspectives (Brown and Duguid, 2000; Grant, 1996b; Spender, 1996), the acknowledged generic management intention is to improve the “wisdom” of the organization to enable improved decision making, and increase innovation, performance, and sustainable competitiveness outcomes (Nonaka and Takeuchi, 1995; Davenport and Prusak, 1998). Building this wisdom requires the continual creation of new knowledge, and the transfer and interpreting of this new knowledge within the existing knowledge contexts of other parts of the organization (Kusunoki et al., 1998). Knowledge creation, particularly with explicit knowledge which can be captured and shared by information and technology (IT) systems in the firm (Stewart, 1998), plays a prominent role in the firm's strategy formulation process. However the creation and transfer of implicit or tacit knowledge remains the “black box” (Spender, 1996); the transfer and utilization of tacit knowledge, and its effect on organizational innovation and performance remains unclear.

The effectiveness of organizational knowledge transfer is influenced by key organizational factors such as structure, culture, processes and strategy, and information technology (Ives et al., 2003 and Spender, 1996). Despite numerous studies to establish the link between knowledge management and innovation (Calantone et al., 2002; Hurley and Hult, 1998), and knowledge management and higher organizational performance, the relationship between knowledge transfer and organizational performance, and between innovation and organizational performance is vague. Additionally whilst the knowledge management literature includes a multitude of robust frameworks and models very few are targeted specifically at knowledge transfer. This paper contributes to this gap through examining the direct and indirect effects of organizational factors on knowledge transfer in organizations. Furthermore the links between knowledge transfer on organisational innovative capability and the links between knowledge transfer and the firm's performance are explored.

The resource and knowledge based views of the firm have prompted strategy researchers to focus on value creation, as opposed to value appropriation (Conner and Prahalad, 1996; Kogut and Zander, 1996; Nahapiet and Ghosal, 1998). Strategy and entrepreneurship research shares an interest in resource acquisition, sharing, and exploitation for the purpose of value creation (Yli-Renko et al, 2001). Of the various resources available to the firm, knowledge is arguably the most important (Spender, 1996). By highlighting the important links of knowledge management, trust and organizational effectiveness in auditing firms, this research will contribute a further convergence between the domains of knowledge management and entrepreneurship research. Knowledge lies in human minds and exists only if there is a human mind to do the knowing (Widen-Wulff and Suomi, 2007). There are three dimensions of knowledge: width, depth and tacitness (Nooteboom, 1993). Knowledge can be created by intentional and resource-consuming efforts (Du et al, 2007). The neglect of tacit knowledge, based on people and ideas, has undoubtedly reduced the corporate market place's capability for true innovation and sustainable competitiveness (Gamble and Blackwell, 2001). According to Alavi and Leidner (2001), knowledge management is largely regarded as a process involving various activities and a minimum of four basic ...