An Integrated Infrastructure Capabilities of Knowledge Transfer

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1 An Integrated Infrastructure Capabilities of Knowledge Transfer orfadzilah Abd Razak 1, Wan Edura Wan Rashid 2, oor Azlina Mohamed Yunus 3 1 Universiti Teknologi MARA, Malaysia, norfadzilah0438@gmail.com 2 Universiti Teknologi MARA, Malaysia, wanedura@yahoo.com 3 Universiti Teknologi MARA, Malaysia, nooraz2939@puncakalam.uitm.edu.my ABSTRACT Knowledge is consider as the main intellectual capital for the Small and Medium Enterprise (SMEs) in order to sustain and remain competitive in business development. The issues of brain drain among the employees in SMEs becomes critical especially in developing and retaining the human capital. In tackling this matter, knowledge transfer is one of the effective initiatives to maintain the value of knowledge in the Hence, this study proposed the pre-survey aimed to investigate the critical factors of the infrastructure's capabilities of knowledge transfer towards the human capital development SMEs s employees that produce local food and beverage in Malaysia. A descriptive and correlation analysis were conducted and the result showed that all three infrastructure's capabilities (culture, people and technology) were correlated in developing human capital among the SMEs employees via training and succession planning. Overall, this study may assist human resources in the initial stages towards creating and maintaining the awareness of knowledge transfer in the Keywords: Knowledge Management, Knowledge Transfer, Knowledge Enablers. I I TRODUCTIO Today s economy is rapidly facing of changes in globalization and knowledge-based products and services. The survival and performance of an organization are influenced by its ability and speed in developing knowledge-based competencies among the employees (Salina and Fadzilah, 2008). Recent studies by Abdel (2012) define knowledgebased as capability of employees applying that knowledge in a particular area used to demonstrate and interact with others. To fulfill the knowledgebased economy, the generation and exploitation of knowledge play a vital role in the process of wealth creation, and have a competitive advantage to the business. According to Blanchard and Thacker (2009) knowledge is defined as an organized body of facts, principles, procedures and information acquired. Recent studied defined knowledge as an experience, textual information, and opinions of the expert in the particular field (Susanty, Puspitasari, Puspitasari, N. Sinthani, Mutiara, 2011). This definition had been updated by Anand and Singh (2011) explained knowledge is known about, and knowhow of the facts, methods, principles, techniques and others. In current practices, most of the organization mainly focusses to the adoption of the changes, faster problem solving and improve organization performance rather than to leverage the human talent and ensure sustainability of human capital as their competitive advantages. Human capital is the collective value of the capabilities, knowledge, skills, life experiences, and motivation of the workforce (Nickols, 2010). A human capital contribution is the success of the organization and it is value added to the organization to be different with other competitors. Besides that, there is difficulty in continuous learning to replicate or replace when aging employees or expert transfer out and retired from the organization (Davenport and Prusak, 1998). Due to this, the organization constraints with issues of brain drain and contribute to the talent shortages. In perspectives of human capital development, it is vital to strategic the human capital in order compete, attract and retain human capital by practice knowledge transfer in organizations (Goh, 2002; Aldisent, 2002). Hence, this study proposed the presurvey aims to investigate the critical factors of the infrastructure's capabilities of knowledge transfer towards the human capital development SMEs s employees that produce local food and beverage in Malaysia. II LITERATURE REVIEW A. Human Capital Development Training and development is a platform of the knowledge to share and disseminate in the In previous literature, training and development define as a process for developing and unleashing human expertise through organization for the purposes of improving performance (Lesser, 2006). Basically, through training and development knowledge are converted from tacit into explicit knowledge, retain the tacit knowledge of those people about to leave the organization, use the available explicit knowledge in day-to-day processes and decision-making, and measure the achievement of the organization in converting, Knowledge Management International Conference (KMICe) 2014, 12 1 August 2014, Malaysia 11

2 retaining and using existing and new knowledge (Selmer, Ebrahimi, & Mingtao, 2002). A part of that, succession planning is the strategies to prepare the next employees to manage the An HR manager s roles burden to ensure that the organization s future managers receive the necessary preparation to successfully fill potential vacancies (Meritum Project, 2002) In the knowledge organization, it is part of preparation where the management is potential to develop positive attitudes in contributes their own knowledge and experiences with the organization as well as encouraging these attitudes and behaviors in others. Significant to the succession planning practices, the organization focus on the continuous learning organization as the channel to implement the knowledge transfer. This was supported by the finding by Marr (2004) there was a strong relationship between the practices of succession planning and knowledge transfer. B. Infrastructures Capabilites From organizational perspectives, knowledge management would be more effective in determining the critical factors of infrastructure's capabilities. In other words, competencies of the organization in implementing knowledge transfer are critical by the presence of infrastructure's capabilities such as technology, culture and organizational structures (Swanson and Holton, (2001). Clearly, these infrastructure s capabilities are very substantial for further discussion as it acquires, combine, apply, and create knowledge in the In other studies by Soon and Fakhrul (2011) the researchers explained that knowledge infrastructure's capabilities are the mechanism for the organization to develop its knowledge and also to stimulate the creation of knowledge within the organization as well as the sharing and protection of it. Technology defines as technical system and process on how the information being accessed and used by all the people in the business and organizational (O'Dell and Grayson, 1997) In second elements, structure capability is the extent of an organization s structural disposition toward encouraging knowledge-related activities. The structure must be appropriate to the organization in order to adapt to an ever-changing environment (Soon and Fakhrul, 2011). However Cohen, and Levinthal (1994) refers structure as strategy of getting the right knowledge to the right people at the right time, and helping people to share and put the information into action in ways that strive to improve the organizational performance. In addition, culture defines not only what knowledge is valued, but also what knowledge must be kept inside the organization for sustained innovative advantage (Tare, 2003). In further investigate by Bounfour, (2003) found that culture it is agreed that a broad range of factors can influence the effective transfer of the knowledge includes of leadership, motivation, organizational learning and external factors such as environmental changes Therefore, culture perceive as critical factor in creating awareness towards creating, sharing and utilizing the knowledge in the C. Conceptual Framework In this study, infrastructure capabilities served as independent variables (culture, structure, people and technology) in determining its influence towards human capital development or dependent variable. Thus, human capital development will be further measured via two ways; i) training and ii) succession training among employees in SMEs. Therefore, this study proposes the following framework which illustrated in Figure 1. Based on the conceptual framework, the hypotheses for this study had developed as: H1: Culture has relationship between human capital development in SMEs.. H2: Structure has relationship between human capital development in SMEs. H3: T-shape skill has relationship between human capital development. H4: Technology has relationship between human capital development in SMEs Infrastructures Capabilities Culture - Collaboration - Trust - Learning Structure - Formalization - Centralization People - T-Shape skill Technology Figure 1. Conceptual Framework. Human Capital Development Training Human Development III METHODOLOGY This pilot study consisted of 102 respondents from small medium enterprises (SMEs) of food and beverages selected in Klang Valley. The survey was distributed among the employees who worked in the SMEs s industries. The return rate for this study was 99 percent while two percent were discarded due to incomplete data. The survey instrument consisted of 42 questions included the questions of infrastructure Knowledge Management International Conference (KMICe) 2014, 12 1 August 2014, Malaysia 12

3 capability, and human capital development. The items measurement was adapted from Gold, Malhotra. & Segars (2001), who conducted the studied between knowledge management enablers and organizational performance, while seven (7) items to measure the human capital development were driven from Tare, (2003) in his studied relationship between human resources roles in knowledge management. The scoring on the questions was based on a point Likert scale with 1 being strongly disagree and being strongly agree. To analyze the data, descriptive and correlation analysis had been conducted to test the independent and dependent variables of this studied. The descriptive analysis was conducted to test the mean and standard deviation of distribution data while correlation analysis was used to test the hypotheses of this studied. IV FI DI GS A D DISCUSSIO S A. Demographic Analysis Demographic analysis reported that the majority of the respondent were females (2.%) and 47 were males (47.%). Most of the respondents in this study were aged in between 18 to 39 years old and the lowest of them were between 0-9 years old. This study also reported that most of the organization had less than 10 employees (79%) and about 6 respondents has more than 2 employees. The majority of the respondents has their own experience in business more than years ( 48%) and average in between 3 to 4 years (21%). This result showed in Table 1. Table 1. Demographic Analysis. Demographic Frequency Percentage (%) Gender Female Male Age (years) No of Employee s Working Experienc es (yrs) 18 to to to 49 0 to 9 < 10 Between 1 to 24 > 2 < 1 year 1-2 years 3-4 years > years The demographic analysis discussed the employees were dominant by the female employees. Most of the employees in the organization at young aged in between 18 to 39 years old explained and there is less than 10 employees were employed due to the family business. The working experience in this studied means the employee s involvement in the business and found that there were highly experience in conducted their own business. B. Reliablity Analysis To assess whether the data from the three variables that were summed to determine human capital development score formed a reliable scale, Cronbach s Alpha was computed. According to Zaied, (2001) cronbach s alpha values should be above.70 means that the items are repetitious or items are really necessary for an internally reliable measure of the concepts. The items measurement indicated that cronbach alpha were highly reliable to tested in this study. Variables Human Capital Development (HCD) 1. Culture - Collaboration (CO) - Trust (TR) - Learning (L) 2. Structure - Centralizatio n (CE) - Formalizatio n (FO) 3. People - T shape skill (TS) 4. Technology - IT support (IT) Table 2. Reliability Analysis ( = 99). umber of Std. Alpha items 7.96 Similar studied had been conducted by Zaied, (2001) in measuring knowledge management capabilities for assessing organizational performance used similar item measurements and found that the reliability value was in his study between range of.82 to 0.9 and accepted to the study. Thus the items measurement adapted from the previous studied was applicable to the studied in measured the SMEs employees. C. Correlations Analysis Corrleation analdysis was conducted to test the hypotheses either rejected or fail to rejected. Table 3 presents the correlation analysis and the data found that there is high relationship between infrastructure's capabilities and human capital development among the entrepreneurs in SMEs Knowledge Management International Conference (KMICe) 2014, 12 1 August 2014, Malaysia 13

4 However, in structural elements; centralization and formalization practices showed there was a negative relationship and not significant in developing human capital. To sum up the correlation analysis, the hypotheses H1, H3 and H4 fail to reject while H2 reported to reject the hypotheses. Table 3. Correlation Analysis of Knowledge Infrastructure Capability and Human Capital Development. Variables R Values Hypotheses Collaboration.3** Trust..67** H1 fail to Learning.622** reject Centralization H2 Rejected Formalization.139 T Shape Skills.619** H3 Fail to rejected IT Support.631** H4 Fail to rejected ** Correlation is significant at the 0.01 level (2-tailed). Thus, the finding determines that infrastructure's capabilities were considered as important by almost SME s entrepreneurs, in practicing effective knowledge transfer in The findings stated that culture, people and technology are the main actors in facilitating knowledge transfer be implemented in workplaces. According to Gold et.al (2001) and Swanson and Holton, (2001) agreed that infrastructure capability influences the organizational performance and enhance intellectual capital as competitive advantages of their business through effective knowledge transfer in V CO CLUSIO The above discussion is objective to investigate the critical success factors of knowledge management capability influences the human capital development. The findings determine that culture, people and technology may facilitate the effective knowledge transfer in Knowledge transfer need understand the ideas, concepts and practices the knowledge in the workplaces. It required human relation and technology to ease the knowledge transfer in This finding contribute to the organization by identify the infrastructures capability to identify the lack facilities in More than that, it facilitates the organization to improvise the practices in organization as to practice effective knowledge transfer. It is important to organization in retain and sustain knowledge and employees in While employee bay benefit change and motivate them to educate, encourage and participate in knowledge transfer. They aware the facilities provided in the organization may enhance their performance by work together share and exchange their experience to each other s. The technology may facilitate their work and improve their performance to be excellent and efficient. With the facilitation of IT support such as databases, advance technology and tool to retrieve information and knowledge would encourage the employee to create, share and apply the knowledge into their work life. For future recommendation, this study recommends that, a bigger scale with larger sample size should be conducted for more generalized results. The instruments should be further refined to minimize bias for better reliability and validity of the results. In addition the findings also propose to investigate the circumstances of infrastructure's capabilities in developing intellectual capital in organizations. ACK OWLEDGME T This research was supported by the Research Management Institute (RMI) of Universiti Teknologi MARA, under grant RAGS. REFERE CES Abdel N. (2012). An Integrated Knowledge Management capabilities Framework for Assessing Organizational Performance, International Journal Information Technology and Computer Sciences Vol 2 pp.1-10 Aldisent, L. (2002). Valuing People! How Human Capital Can Be Your Strongest Asset. Chicago, IL: Dearborn Trade Publishing Anand, A & Singh, M.D. (2011). Understanding Knowledge Management : A Literature Review, International Journal of Engineering Sciences and Technology Vol 3 No 2 Blanchard, P. and Thacker, J. (2009). Effective training: Systems strategies and practices. In (4th ed.), Learning, motivation, and performance (p. 8-90). New Jersey: Prentice Hall Bounfour, A. (2003). The Management of Intangibles. The Organisation s Most Valuable Assets. London: Routledge Cohen, W. M, and Levinthal, D. A. (1994). Fortune favors the prepared firm. Management Science 40(2): Davenport, T.H, and Prusak. L. (1998). Working Knowledge: How Organizations Manage what They Know, Harvard Business School Press, Boston, MA Goh, S.C. (2002). Managing effective knowledge transfer: an integrative framework and some practice implications, Journal of Knowledge Management, Vol. 6 No. 1, pp Gold. A., Malhotra. A., & Segars, A. (2001). Knowledge management: an organizational capabilities perspective, Journal of Management Information Systems,, 18(1): Lesser, E. (2006). The maturing workforce-managing the crisis before it hits. Retrieved February 2, 2013, from ASTD website: Marr, B. (2004). Measuring and benchmarking intellectual capital, Benchmarking, Vol. 11 No. 6, pp Meritum Project. (2002). Guidelines for managing and reporting on intangibles, Fundación Airtel Móvil, Madrid Knowledge Management International Conference (KMICe) 2014, 12 1 August 2014, Malaysia 14

5 Nickols, F. (2010). The Knowledge in Knowledge Management. Retrieved from Management, June 22, O'Dell, C., & Grayson, C.J. (1997). If Only We Knew What We Know: The Transfer of Internal Knowledge and Best Practice. New York, NY: The Free Press Salina, D. and Wan Fadzilah. (2008). An Empirical Study of Knowledge Management Processes in Small and Medium Enterprises, Communications of the IBIMA, Volume 4, 2008 Selmer, J., Ebrahimi, B.P., & Mingtao, L. (2002). Career management of business expatriates from China. International Business Review, 11, Susanty, A., Puspitasari, D., and. Puspitasari, N.B, Sinthani, N., Mutiara. R. (2011). Preliminary Study of Key Success Factors for Effective Knowledge Transfer in SMEs Batik (Case Study SMEs Batik in Solo), Proceedings of the 2011 International Conference on industrial Engineering and Operations Management Kuala Lumpur, Malaysia. Swanson,R.A and Holton, E.F.(2001). Foundation of Human Resource Management. San Francisco CA:Berrett-Koehler Tan Thai Soon, and Fakhrul Anwar Zainol. (2011). Knowledge Management Enablers, Process and Organizational Performance: Evidence from Malaysian Enterprises, Asian Social Science Vol. 7, No. 8; August 2011 Tare, M.(2003), A Future For Human Resources A Specialized Role in Knowledge Management, thesis submitted in fulfillment of the requirements for the Degree of Doctor of Philosophy in the School of Business, Swinburne University of Technology Zaied, A.H.N. (2001). An Integrated Knowledge Management Capabilities Framework for Assessing Organizational Performance, International Journal of Information Technology and Computer Science, 2012, Volume 2, pp: 1-10 Knowledge Management International Conference (KMICe) 2014, 12 1 August 2014, Malaysia 1