Study on Knowledge Management Activities Execution Factors in Taiwan Tourism Factories

Transcription

1 Online Access: International Journal of Operations and Logistics Management Volume 5, Issue 1 Pages: 1-15 March 2016 e-issn: p-issn: Study on Knowledge Management Activities Execution Factors in Taiwan Tourism Factories Yi-Chan Chung 1 *, Shu-Fang Lin 2, Quan-Yi Tian 3 1, 2 & 3. Graduate Institute of Business Administration, Yuanpei University of Medical Technology, Taiwan. Customer demand for quality service from tourism factories continually increases. With more severe competition, how tourism factories select appropriate operational strategy and leadership, include information technology involvement in knowledge management activities in providing better customer service quality through enhanced operational performance is essential operational strategy. This study probes into the correlation among operational strategy, leadership, information technology involvement, knowledge management activities and the operational performance of tourism factories. From February to March 2014, using a questionnaire survey, 52 valid questionnaires were obtained. According to the research findings, higher executive degree of knowledge management activities significantly and positively influences operational performance. Marketing differentiation and innovation differentiation execution will reinforce knowledge management activities implementation. Goal-oriented, stable and conservative, considerate and supportive and innovative and adaptive leadership will enhance knowledge management activities execution. Higher information technology educational training and cognition in employees significantly and positively influences the executive degree of knowledge management activities. Hence, tourism factories can reinforce their personnel s information technology educational training and cognition, value marketing differentiation and innovation differentiation and strengthen leadership execution to increase executive degree of knowledge management activities and operational performance. Keywords: Tourism Factory; Operational Strategy; Leadership; Information Technology Involvement; Knowledge Management INTRODUCTION The Industrial Development Bureau of the Ministry of Economic Affairs (MOEA), in Taiwan defines the tourism factory as a manufacturing factory with tourism education or industrial *Corresponding author: Yi-Chan Chung Associate Professor, Graduate Institute of Business Administration, Yuanpei University of Medical Technology, Taiwan. kent4321@ms19.hinet.net 1

2 culture value that provides products that factor in tourism. According to the figures announced by the MOEA in Taiwan, in 2012, the number of visitors to tourism factories amounted to 10 million and tourism revenue was NTD 20 hundred million. In 2013, the number of visitors amounted to 12 million and tourism revenue was NTD 25 hundred million. Tourism factories have become popular new spots for tourists. For tourism factories, which combine traditional manufacturing industry with the tourism industry, the number of tourists and tourism revenue increased significantly year by year. This shows that tourism factories are a new attraction for domestic and foreign tourists. However, people have higher demand for service quality from tourism factories. In more severe competition, how tourism factories select appropriate operational strategy and leadership include information technology involvement in knowledge management activities to provide customers with better service quality and strengthen service efficiency is the key to their operational strategy. Few empirical studies included operational strategy, leadership and information technology involvement in knowledge management activities to probe into their effect on operational performance. Hence, this study treats tourism factories as subjects to explore the correlation among types of operational strategy, leadership, information technology involvement, executive degree of knowledge management activities and operational performance. The research purposes are as follows: (1) to probe into the operational strategy effect on executive degree of knowledge management activities; (2) to probe into the leadership effect on executive degree of knowledge management activities; (3) to probe into the information technology involvement effect on executive degree of knowledge management activities; (4) to probe into the executive degree of knowledge management activities effect on operational performance; (5) to provide suggestions for tourism factories to implement knowledge management activities and enhance operational performance. LITERATURE REVIEW Knowledge management Carlucci et al. (2004) suggested that knowledge management is the process of organizing, updating, reorganizing, analyzing and sharing information with others over the long term. According to Applehans et al. (1999), knowledge management means constructing, sharing, applying and updating planning and system knowledge to reinforce organizational efficiency and cost effectiveness. Desouza (2003) defined knowledge management as the combination of knowledge creation, knowledge saving, knowledge diffusion and knowledge application in organizations. Alavi & Leidner (2001) indicated that knowledge management means the process of systematically acquiring, organizing and coordinating implicit and explicit employee knowledge. Based on Bhatt (2001), knowledge management is the activity of creating, demonstrating, presenting, spreading and applying knowledge. Zack (1999) suggested that knowledge management activities include 5 phases (1) acquisition: organizations create knowledge or acquire it using internal and external sources; (2) refinement: before saving acquired knowledge in a database, organizations must refine it to increase its value, including indication, searching, classification, summary and integration; (3) saving and searching: database and knowledge communication are connected; (4) communication: constructs various systems and methods that allow members to use the database; (5) presentation: the content presented after arranging, selecting and integrating knowledge. Lee & Hong (2002) classified knowledge management activities into four basic steps: knowledge acquisition, knowledge development, knowledge sharing and knowledge use. Liebowitz (1999a) suggested that knowledge management activities are the process of knowledge identification, acquisition, saving, sharing, application and sales. By reviewing the related literatures, this study divided knowledge management activities into knowledge acquisition and creation, knowledge refinement, knowledge saving and knowledge sharing. 2

3 Operational strategy and knowledge management activities Croteau& Bergeron (2001) defined operational strategy as the organizational action to accomplish goals. Porter (1980) suggested that in order to acquire or maintain competitive advantages, enterprises can adopt cost leadership, differentiation and centralization. According to enterprises reaction toward environmental change, Miles & Snow (1978) classified operational strategy into 4 types: explorer strategy, defender strategy, analyst strategy and reactor strategy. Durand & Coeurderoy (2001) divided operational strategy into cost leadership, marketing differentiation and innovation differentiation. This study classifies tourism factory operational strategy by cost leadership, marketing differentiation and innovation differentiation proposed by Durand & Coeurderoy (2001). Hamzah & Ismail (2009) indicated that different types of operational strategies adopted by firms significantly and differently influence knowledge management activities execution. Based on Shih & Chiang (2005), firms adoption of different operational strategies will influence knowledge management implementation. Bhatt (2000) suggested that knowledge management activities include the cycle such as acquisition, creation, communication, review and modification. Different stages require different strategies. Liebowitz (1999b) suggested that with different operational strategies, organizations will adopt different methods of knowledge management. Based on literature review, this study proposes H1: different types of operational strategy significantly and differently influence execution of knowledge management activities. Leadership and knowledge management activities Dubrin (2001) defined leadership as the capacity to enhance organizational members confidence in accomplishing organizational goals. Quinn (1988) classified leadership into goal-oriented, stable and conservative, considerate and supportive and innovative and adaptive. Tayeb (1995) suggested that the types of leadership include work orientated and personnel orientated. Work orientation emphasizes job performance, whereas personnel orientation refers to care and positive interaction. Bass & Avolio (1990) divided leadership into Transactional Leadership and Transformational Leadership. Transactional Leadership encourages the subordinates by rewards. Transformational Leadership aims to change employees job values and beliefs and develop employees higher level of motivation. Leadership framework proposed by Quinn (1988) is based on new leadership theory and it matches the requirement for leadership in tourism factories. Hence, this study classifies leadership through leadership proposed by Quinn (1988). Crawford (2005) suggested that in comparison to Transactional Leadership and Laissez-faire Leadership, Transformational Leadership is more suitable for knowledge management activities implementation. Farh & Cheng (2000) indicated that authoritative leadership negatively influences knowledge management activities implementation. According to Liebowitz & Chen (2002), leadership will influence employees intention to share knowledge. If organizations encourage and care about employees and create an open group atmosphere, they will reinforce employees intention to share knowledge (Zarraga & Bonache 2003). Based on the previous literature review, this study proposes H2: different types of leadership significantly and differently influence knowledge management activities execution. Information technology involvement and knowledge management activities Roberts (1996) suggested that information technology means all kinds of software and hardware used to acquire, apply, display, save and spread information. According to Sakaguchi & Dibrell (1998), information technology involvement can be measured by the investment and training in information technology. Budget and facility information technology investment are measured by quantitative indicators. Information technology training means training of members in using information technology. Miller & Doyle (1987) indicated that information technology involvement must be based on the following three dimensions: (1) to recognize the importance of information technology in firms; (2) Use of 3

4 information technology is effective only when there is a certain degree of investment in software, hardware and personnel; (3) personnel training is based on the needs of developers and users. According to literature review (Miller & Doyle, 1987; Sohal et al., 2001, Meso & Smith, 2000; Sakaguchi & Dibrell, 1998), this study classifies information technology involvement into personnel s cognition, investment in software and hardware and personnel training. Ruiz-Mrcader et al. (2006) suggested that information technology will enhance knowledge management activities and result in improved organizational performance. Based on Gold et al. (2001), information technology involvement will influence executive effectiveness in knowledge management activities. Meso & Smith (2000) indicated that information technology use can accelerate communication and receiving organizational knowledge and information and it positively influence knowledge management operations. According to literature review, this study proposes H3: higher degree of information technology involvement significantly and positively influences knowledge management activities execution. Knowledge management activities and operational performance Based on a review of the related literature (Croteau & Bergeron, 2001; Pelham, 2000; Kirca et al., 2005; Tippins & Sohi, 2003; Shrader, 2001) and the business characteristics of tourism factories, this study treats the operational goal accomplishment rate, satisfaction with service quality, growth in revenue, ratio of returning old customers, enhancement of service efficiency, growth in number of tourists and tourism factory competitiveness as the indicators to measure operational performance. Schack (2004) suggested that knowledge is critical in organizational activities. Knowledge management activities execution will improve corporate performance. Based on Carlucci et al. (2004), knowledge management activities will influence an organization operational performance. According to Gold et al. (2001), effective knowledge management will strengthen an enterprise operational performance. Hult (2003) suggested that many organizations execute knowledge management activities resulting in better operational performance. Knowledge management activities implementation positively influences organizational performance. Based on literature review, this study suggests H4: executive degree of knowledge management activities significantly and positively influences operational performance. RESEARCH METHOD RESEARCH HYPOTHESES Based on the literature review this study infers these hypotheses as follows: H 1: Different types of operational strategy significantly and differently influence knowledge management activities execution. H 2: Different types of leadership significantly and differently influence knowledge management activities execution. H 3: Higher degree of information technology involvement significantly and positively influences knowledge management activities execution. H 4: Executive degree of knowledge management activities significantly and positively influences operational performance. Questionnaire Collection and Data Analysis The study questionnaire includes 6 parts. Part 1 is the scale of tourism factories: according to capital and number of employees, tourism factories are classified into large-scale, medium-scale tourism factories and small-scale tourism factories; Part 2 is types of operational strategies and they include (1) cost leadership; (2) marketing differentiation; (3) innovation differentiation; Part 3 is leadership which includes (1) goal-oriented; (2) stable and conservative; (3) considerate and supportive; (4) innovative and adaptive; Part 4 is information technology involvement and it includes (1) personnel training; (2) investment in software and hardware; (3) personnel cognition. Part 5 is executive degree of knowledge management activities and it includes (1) knowledge acquisition and creation; (2) knowledge refinement; (3) 4

5 knowledge saving; (4) knowledge sharing; Part 6 is operational performance and it includes operational goal accomplishment rate, satisfaction with service quality, growth in revenues, ratio of returning old customer, enhancement of service efficiency, growth in number of tourists and competitiveness of tourism factories. The questionnaire subjects are 130 tourism factories guided and evaluated by the Industrial Development Bureau, Ministry of Economic Affairs. Data were collected using questionnaire survey. The respondents were supervisors in charge of tourism factory operations. From February to March, 2014, using questionnaire survey, this study obtained 52 valid questionnaires. Nunnally (1978) suggested that in exploratory studies, reliability above 0.7 is acceptable. In this study, reliability of the variables is at least 0.7. Thus, reliability is acceptable. Reliability of the variables is shown in Table 1. TABLE 1 HERE This study analyzes data by SPSS. The methods of data analysis was analysis of variance (ANOVA). Measurement of variables Variables include types of operational strategy, leadership, information technology involvement, executive degree of knowledge management activities, operational performance and scale of tourism factories. Measurement of variables is shown as follows: Measurement of types of operational strategy According to empirical research questionnaires developed by related scholars (Durand & Coeurderoy, 2001; Prajogo & Sohal, 2006; Lynch et al., 2000) and tourism factory businesses, this study generalizes operational strategy items as follows: 1.Cost leadership: (a) tourism factories invest in techniques or facilities which save cost; (b) tourism factories control service costs at the lower level; (c) they reduce cost through business efficiency improvement; (d) they try to lower costs provide cheaper tourist services, in comparison to their competitors. 2.Marketing differentiation: (a) tourism factories try to provide more valuable services in comparison to other competitors; (b) they provide services according to customers varying needs; (c) they try to provide services with higher quality and characteristics in comparison to their competitors. 3. Innovation differentiation: (a) it is difficult for competitors (colleagues) to imitate the services provided by tourism factories; (b) by re-designing tourist services they provide better services than other competitors; (c) using new techniques or methods, they provide better services than other competitors. The measurement is based on a Likert 5-point scale, ranging from 5 (strongly agree) to 1 (strongly disagree). Measurement of leadership This study classifies leadership using goalorientation measures: stable and conservative, considerate and supportive and innovative and adaptive leadership proposed by Quinn (1988). The leadership scale used in this study was modified according to the competing value leadership scale developed by Chou (2009) and tourism factory industrial characteristics. The categories of leadership are shown as follows. 1.Goal-oriented: (a) supervisors clearly inform employees of the goals pursued by firms; (b) each member s duties are spelled out in detail; (c) supervisors instruct the employees using SOP and correct them properly; (d) supervisors are certain about the priority and future directions; (e) supervisors are job performance oriented; (f) supervisors actively accomplish the goals planned by firms; (g) supervisors encourage employees to pursue higher work results. 2.Stable and conservative: (a) supervisors pay attention to document details; (b) supervisors often review the progress of plans; (c) supervisors often analyze the firm s situations to allow employees to improve themselves; (d) supervisors establish measures to examine different kinds of performance; (e) supervisors maintain normal and stable corporative operations; (f) supervisors coordinate plans by budgeting; (g) supervisors construct cross-departmental teams for important affairs. 5

6 3. Considerate and supportive: (a) supervisors put themselves in the employees shoes; (b) supervisors help employees plan their career; (c) supervisors support questions posed by employees; (d) supervisors allow employees to fully express their views to result in common consensus; (e) supervisors encourage employees to participate in decision making; (f) supervisors make efforts to strengthen employees cohesion; (g) supervisors actively avoid conflict among employees. 4. Innovative and adaptive: (a) supervisors solve problems using creative methods; (b) supervisors clearly suggest the firm s visions and continuously reinforce them; (c) supervisors make new attempts using new concepts and procedures; (d) supervisors encourage employees to continue improving their behavior; (e) supervisors make efforts to maintain a positive relationship with high management; (f) supervisors make efforts to promote the firm s beliefs to the external world; (g) supervisors often interact with other companies and customers to maintain positive relationships. The measurement is based on a Likert 5-point scale, ranging from 5 (strongly agree) to 1 (strongly disagree). Measurement of information technology According to literature review (Miller & Doyle, 1987; Sohal et al., 2001, Meso & Smith, 2000; Sakaguchi & Dibrell, 1998), this study divides information technology involvement into personnel training, investment of software and hardware and personnel s cognition. The items are shown as follows. 1.Personnel training: (a) employees receive sufficient information technology educational training; (b) employees master information technology; (c) sufficient professional personnel with information technology; (d) complete information system teaching materials and manuals. 2. Software and hardware investment: (a) sufficient funds for information technology; (b) sufficient software invested in in information technology; (c) sufficient hardware invested in information technology. 3. Personnel cognition: (a) information technology involvement is supported; (b) they recognize the importance of information technology; (c) employees highly accept information technology. The measurement is based on a Likert 5-point scale, ranging from 5 (strongly agree) to 1 (strongly disagree). Measurement of executive degree of knowledge management activities According to related literature review, (Desouza, 2003; Applehans et al., 1999; Zack, 1999; Lee & Hong, 2002; Liebowitz, 1999a; Bhatt, 2001), this study classifies the items of knowledge management activities into four: 1. Knowledge acquisition and creation: (a) they collect internal and external knowledge with plans; (b) they encourage employees to create and acquire new knowledge by learning or R&D; (c) they provide employees educational training to obtain new knowledge; (d) they continuously collect valuable knowledge 2. Knowledge refinement: (a) they reorganize, screen and eliminate knowledge collected; (b) they integrate and apply professional knowledge in different fields; (c) they transform knowledge collected into simple and useful knowledge. 3. Knowledge saving: (a) they save knowledge in database for employees checking; (b) by educational training, they save knowledge in employees memory; (c) they save the solutions as files or records as reference for employees. 4. Knowledge sharing: (a) knowledge exchange and interaction among the units; (b) they encourage employees to share knowledge; (c) they hold internal conferences to allow employees to exchange work knowledge and learning; (d)employees can freely propose the ideas and express opinions. The measurement is based on a Likert 5-point scale, ranging from 5 (strongly agree) to 1 (strongly disagree). Operational performance measurement Based on a review of the related literature (Croteau & Bergeron, 2001; Pelham, 2000; Kirca et al., 2005; Tippins & Sohi, 2003; Shrader, 2001) and tourism 6

7 factory business characteristics this study treats the operational goal accomplishment rate, satisfaction with service quality, growth of revenue, ratio of returning old customers, service efficiency enhancement, growth in number of tourists and tourism factory competitiveness as the indicators, including (1) in comparison to colleagues, the operational goal accomplishment rate is higher; (2) in comparison to colleagues, customers are more satisfied with tourism factory service quality; (3) in comparison to colleagues, growth in revenue is higher; (4) old customer return rate is high; (5) in comparison to colleagues service efficiency is more significant; (6) in comparison to colleagues growth in number of visitors to tourism factory is higher; (7) in comparison to colleagues tourism factory competiveness is more significant. The measurement is based on a Likert 5-point scale, ranging from 5 (strongly agree) to 1 (strongly disagree). Measurement of scale According to capital and number of employees this study divides the tourism factory scale into three categories. Large-scale tourism factories: capital above NTD 80 million or number of employees above 200; medium-scale tourism factories: capital below NTD 80 million and number of employees is above 20 and less than 200; small-scale tourism factories: capital below NTD 80 million and number of employees is less than 20. Measurement of industrial types and corporate scale is based on nominal scale. RESEARCH RESULTS Correlation between operational strategy and executive degree of knowledge management This study divides types of operational strategies (cost leadership, marketing differentiation and innovation differentiation) into two groups (high and low executive degrees). A significant difference is determined based on the knowledge management activities means between two groups. Table 2 shows the variance analysis test for the knowledge management activities operational strategy. TABLE 2 HERE The research finding shows that H1 is supported. Thus, executive degrees of marketing differentiation ad innovation differentiation will significantly influence knowledge management activities. Executive degree of cost leadership does not significantly influence executive degree of knowledge management activities. Correlation between leadership and executive degree of knowledge management This study classifies the types of leadership (goaloriented, stable and conservative, considerate and supportive and innovative and adaptive) into two groups (high and low executive degrees). A significant difference is determined based on the knowledge management activities means between two groups. Table 3 shows variance analysis test of leadership on knowledge management activities. TABLE 3 HERE Research finding shows that H2 is rejected. Hence, executive degrees of goal-oriented, stable & conservative, considerate & supportive and innovative & adaptive leadership will significantly influence knowledge management activities. Correlation between information technology and executive degree of knowledge management This study divides information technology involvement (personnel training, investment of software and hardware and personnel s cognition) into two groups (high and low executive degrees). A significant difference is determined based on the knowledge management activities means between two groups. Table 4 shows the variance analysis test for information technology involvement on knowledge management activities. TABLE 4 HERE Based on the finding, H3 is partially supported. It shows that higher personnel information technology educational training and cognition will result in higher executive degree of knowledge management activities. However, software and hardware investment does not significantly influence executive degree of knowledge management activities. 7

8 Correlation between degree of knowledge management activities and operational performance This study divides knowledge management activities (knowledge acquisition and creation, knowledge refinement, knowledge saving and knowledge sharing) into two groups (high and low executive degree). A significant difference is determined based on the operational performance means between two groups. Table 5 shows the variance analysis test for knowledge management activities on operational performance. TABLE 5 HERE According to the finding, H4 is supported. It shows that higher degree of knowledge management activities significantly and positively influences operational performance. The influence of the executive degree of knowledge management activities of the tourist factory with different scales on business performance This section explores the influence of executive degree of knowledge management activities of the tourist factory with different scales. The results in Table 6 show that scale of tourist factory do not have a significant influence on the executive degree of knowledge management activities. TABLE 6 & 7 HERE Table 7 reveals that the tourist factory from different scale do not reveal a significant influence on their business performance. As seen above, for the tourist factory with different scale, the executive degree of knowledge management activities do not reveal significant impact on business performance. CONCLUSION Few empirical studies have included operational strategy, leadership and information technology in knowledge management activities to explore their effects on operational performance. This study examined tourism factories in Taiwan as subjects to probe into the correlation among operational strategy, leadership, information technology, executive degree of knowledge management activities and operational performance. According to the research findings, knowledge management activities will strengthen the operational performance of tourism factories. Higher executive degree of knowledge in management activities significantly and positively influences operational performance. High executive degree of knowledge in marketing differentiation and innovation differentiation will significantly influence knowledge management activities. In addition, higher executive goal-oriented, stable and conservative, considerate and supportive and innovative and adaptive degree of leadership significantly and positively influences knowledge management activities execution. A higher degree of personnel information technology educational training and cognition will result in higher degree of knowledge management activities execution. Therefore, tourism factories can enhance employee information technology educational training and information technology cognition. By differentiation strategy (marketing differentiation and innovation differentiation) and leadership reinforcement, the executive degree of knowledge management activities is reinforced to increase operational performance. ACKNOWLEDGEMENT The authors thank the National Science Council of Taiwan for supporting this research under the grant of NSC E REFERENCES Alavi, M. and Leidner, D.E. (2001). Review: Knowledge management and knowledge management systems: Conceptual foundations and research issues. MIS Quarterly, 25(1), Applehans, W., Globe, A. and Laugero, G. (1999). Managing Knowledge: A Practical Web-Based Approach. Berkeley, California: Addison-Wesley. Bass, B.M. and Avolio, B.J. (1990). Transformational leadership development: 8

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12 APPENDIX Table 1 : The Cronbach s α coefficients for all variables in this study Questionnaire Dimensions Cronbach s α Cost leadership Types of operational Marketing differentiation strategy Innovation differentiation Goal-oriented Stable & conservative Leadership Considerate & supportive Innovative & adaptive Information technology involvement Knowledge management activities Personnel training Investment of software and hardware Personnel s cognition Knowledge acquisition and creation Knowledge refinement Knowledge saving Knowledge sharing Operational performance Table 2: Variance analysis test of operational strategy on knowledge management activities Knowledge Knowledge Knowledge Knowledge acquisition and refinement saving sharing creation Cost leadership Marketing differentiation Innovation differentiation Low # High # F-value P-value Low # 3, High # 4, F-value P-value 0.001* 0.002* 0.029* 0.045* Low # High # F-value P-value 0.002* 0.023* 0.007* 0.036* Note: Low # : the average score lower than 3.50; High # : the average score higher than 3.50; * p <

13 Table 3 :Variance analysis test of leadership on knowledge management activities Knowledge Knowledge Knowledge Knowledge acquisition and refinement saving sharing creation Low # High Goal-oriented # F-value P-value 0.005* 0.002* 0.027* 0.019* Stable & conservative Considerate & supportive Innovative & adaptive Low # High # F-value P-value 0.000* 0.001* 0.001* 0.000* Low # High # F-value P-value 0.000* 0.004* 0.002* 0.001* Low # High # F-value P-value 0.001* 0.045* 0.001* 0.000* Note: Low # : the average score lower than 3.50; High # : the average score higher than 3.50; * p < 0.05 Table 4: Variance analysis test of information technology involvement on executive degree of knowledge management activities Personnel training Investment of software and hardware Personnel s cognition Knowledge acquisition and creation Knowledge refinement Knowledge saving Knowledge sharing Low # High # F-value P-value 0.000* 0.001* 0.000* 0.001* Low # High # F-value P-value Low # High # F-value P-value 0.009* 0.043* 0.002* 0.048* Note: Low # : the average score lower than 3.50; High # : the average score higher than 3.50; * p <

14 Table 5 : Variance analysis test of knowledge management activities and operational performance Operational performance Knowledge acquisition and creation Knowledge refinement Knowledge saving Knowledge sharing Low # High # F-value P-value 0.032* Low # High # F-value P-value 0.001* Low # High # F-value P-value 0.000* Low # High # F-value P-value 0.007* Note: Low # : the average score lower than 3.50; High # : the average score higher than 3.50; * p < Table 6: ANOVA of scale and executive involvement of knowledge management activities Scale F-value P-value Knowledge acquisition and creation Knowledge refinement Knowledge saving Knowledge sharing

15 Table 7: ANOVA for scale and business performance Business performance Scale F-value P-value