Review of the Elements of Knowledge Management Capabilities. Muthana Najim Abdullah 1. Mohammed A. Hashim 2. Nor ashikin Ali 3

Transcription

1 Review of the Elements of Knowledge Management Capabilities Muthana Najim Abdullah 1. Mohammed A. Hashim 2. Nor ashikin Ali 3 Author(s) Contact Details: 1,2,3Universiti Tenaga Nasional, Ikram, Selangor, Malaysia Published online: August JISRI All rights reserved Abstract Various firms worldwide have understood the importance of management (KM) in enhancing the performance of the company. As a result, many researchers have focused on the importance of management for the companies. The importance of management has led the researchers to further investigate the capabilities of management, and examine the ways to administer these capabilities in an organization. This paper tries to explore the capabilities of management, and identify the relevant capabilities of management for the companies. This literature review identified that most of the previous work on the management capabilities were focused on the approach of Gold. Knowledge management was divided into two parts; processes and infrastructures. Knowledge infrastructures look at the culture, technology, and structure. On the other hand, processes includes capabilities of the organization, conversion of, protection of, and application of. More recent studies have divided management into two parts of external and internal. Moreover, literature review shows that there is a tendency to use management as a mediator. Finally, a discussion on the findings of this review and the future possible routes of research are presented. Keywords: Knowledge Management capability, Element of KMC, Knowledge Management. 1. INTRODUCTION In the recent years, organizations have understood the role of management in bringing revenue for the company. As a result, company managers look at the management with more appreciation. Knowledge management improves the organizational performance through acquiring, converting it to something useful, and use that form. Therefore, many companies have initiated using management in their organizations (Gold et al., 2001). Consequently, the topic of management has received worldwide attention among researchers due to its significance for the firm (e.g. Cepeda and Vera, 2007; Chang and Chuang, 2011; Chen and Fong, 2012; Nieves and Haller, 2014; Villar et al., 2014). Many management capabilities studies have been looked at in this review. The studies that were covered include the impact of management capabilities on competitive advantage (Chuang, 2004), innovativeness (Ozbag et al., 2013), competitiveness (Liu et al., 2004) and organizational performance (Chang and Chung, 2011).The management capabilities that were covered in these studies were based on the objectives of the study. In between, many of the researchers were using the elements that were proposed by Gold et al (2001), who divided management capabilities into infrastructure, and processes. In Gold et al (2001) study, infrastructure factors of management capabilities are culture, technology, and structure, while the processes are acquisition of the, making it into something useful, and application and protection of the (Alvi and Leidner, 2001; Gold et al., 2001; Mills and Smith, 2011). Some studies look at management capabilities as a whole (Özbağ et al. 2013) while others divided the capabilities into resource based, and based (Aujirapongpan et al. 2010). Some researchers looked at management capabilities as internal and external elements (e.g. Villar et al. 2014). While there are a massive number of studies on management capability, none of these studies were concentrating on exploring and reviewing of management capability elements that are actually adopted by the companies. Nonetheless, reviewing management capability elements is helpful to understand the management capability elements, which are more frequently used, and are relevant by organizations. Such research helps the organizations to better understand the useful ISSN JISRI All rights reserved Page 1

2 management capability factors for better management practices in their firms. This study is outlined as follows: the methods utilized in reviewing the literature will be discussed in the first section; this is then followed by the meaning of management, and the description of management capability. The coming sections look at the discussion of the methods utilized in this study, followed by prior studies on management capability, and its elements. Later, a discussion on the important management capability elements discovered through literature review is provided, and finally the paper ends with conclusion, and further research possibilities 2. LITERATURE REVIEW 2.1 KNOWLEDGE MANAGEMENT Davenport (1994) defined as a procedure through which the organizational is captured, developed, shared and effectively used. Collins (2010) divided into explicit and implicit. Implicit is the type of that is hard to transfer from a person to another through the means of communication, and verbalizing. On the other hand, explicit is the type of that is possible to be coded into signs, words, etc. therefore, explicit is modifiable, storable, and transmittable, such as stored in encyclopedias, and textbooks. Knowledge is created through the interaction of explicit and implicit. Socialization, externalization, combinations, internationalization (SECI) was proposed by (Nonaka and Takeuchi, 1995) for the purpose of showing the procedures through which the tacit is transferred to explicit. 2.2 Definition of KMC There is not an integrated meaning and definition of management capability in the literature (Desouza, and Awazu, 2005). Nonetheless, various researchers have used various meanings for management capability. For instance, Bose (2003) described management capability as the ability of an organization to leverage existing through continuous learning to create new. Moreover, Liu et al. (2004) stated that management capability is not only the acquisition of the, but also is the capability of the organization to protect this acquired, and use it in order to enhance the employees performance. Chen and Fong (2012) indicated that the origin of management capability goes to the high-level based routines, which are often derived from the learning processes that are managed through processes. This study uses the definition of management capability that is based on the capability of organization to dominant the process and infrastructure to apply management practiced effectively. 3. METHODOLOGY This papers a literature review of the management capability. The Internet search engine was used to determine the papers on the subject. In the search engine, keywords such as process, elements of management capability, capabilities, management capability, infrastructure, and a combination of these words were used. After reviewing the search results, a total of 18 studies were found related to the aims of this study. The studies were from 2001 to 2014, and included empirical, conceptual, and literature reviews. This study is concentrated on the elements of management capability, therefore only the parts related to management capability elements were used. Based on the literature review, study findings were presented. 4. PREVIOUS STUDIES OF KMC The study performed by Gold et al (2001), is one of the most citied studies in the field of management capability. Gold et al. (2001) indicated that management capability is made of processes and infrastructure. Knowledge processes are capability of the organization to acquire, converse the, apply the, and protect the. On the other hand, infrastructure consists of culture, technology, and structure. Many other researchers have adopted Gold et al (2001) approach minimally, or completely. An instance of partial adoption of Gold et al (2001) model is the study by Tseng (2014), in which the researcher looks at operationalized management capability for conversion and protection with the purpose of finding their impact on the overall performance of the company. Fully adopted researches are that of Fan et al (2009), which used fuzzy linguistic method to identify the management capability of an organization. Overall, the findings of the studies suggested that management capability of an organization is very essential in order to initiate management. Scholars have used the dame construct for management capability, however they have changes the labeling. A study by Liu et al (2004) looked at the relationship between management capabilities, and the competitiveness of the companies in Taiwan. Constructs of management capability are obtaining the information, refining the, storing, and sharing the. Another construct that has been used by researchers is the status of the company. The status of the company includes technology advantage, characteristics of the company, and the scale of the company. The study findings showed that all the four elements of the management capabilities had a strong influence on the competitiveness of the company. In Liu et al (2004) study, obtaining of was used similar to acquisition of Gold et al (2001) model. In another study, Chuang (2004) used Gold et al (2001) model with minor chang es. The ISSN JISRI All rights reserved Page 2

3 study was based on data collected from 177 companies, and management capabilities in that study were divided into cultural, technical, structural and human resources. The findings of that study indicated that all the elements of management capability were significantly influential on the competitive advantage of the enterprises. Alike, a study by Chang and Chung (2011) examined the impact of business strategies, and infrastructure capabilities on process. In that study, infrastructure capabilities were technology, based culture, human resource, and structure. Moreover, processes were choosing, access to, storage of, and sharing of. Data was obtained from 135 companies, and the findings indicated that both infrastructure capability and business strategy had a positive relationship with the management process. On the other end, management processes have a positive influence on the firm overall performance. Developing a strategic contingency model for identifying the interrelationships between management (KM) strategy, organizational learning, innovation, KM capability and characteristics was the main purpose of the study conducted by Ju, Li and Lee (2006). They found that KMC have a strong effect on innovation. A new trend in management capability research, which is different from most of the other studies that adopted Gold et al (2001) approach, was conducted by Cepeda and Vera (2007) in Spain, in order to identify the relationship between operational and dynamic capabilities of the enterprises. In that study, 107 firms were chosen, and authors divided the capabilities based on the configuration of the enterprises. Knowledge configuration of an enterprise includes mission and value proposition, and infrastructure of management, including technology, people, and processes. The study findings indicated that both value and mission propositions have an impact on the desired configuration. This will affect the operational capabilities of the enterprise, and the operational capability. In another study, by Miranda, Lee and Lee, (2011), authors divided the capabilities into two parts; accumulation of, and regulation of flows. The first includes strategic templates, human resources, and technology infrastructure, while the latter includes internal learning processes, institutionalization, and external learning processes. Moreover, Chen and Fong (2012) categorized management capability into Knowledge processes and mechanism of governance. The first includes responding to, obtaining of, dissemination of, and utilization of, while the later includes technological, and organization mechanisms. Study findings indicate that management capability elements have strongly positive impact on the management capability and the overall performance of the enterprise. Freeze and Kulkarni (2007) tried to examine the capabilities of through the management capability elements of lessons learned, data documents, expertise, and policies and procedures. Another studies looed at the creation of in multinational companies through a more detailed approach (Colakaglu et al, 2014). In their study, they categorized the creation of into inflows and stocks. The first includes worldwide flows of, as well as the regional flows of, while the later looks at the internal capitals (human, soci al, and organizational). The study findings indicated that organizational capital as the most influential factor. The study also showed that regional inflows significantly impact the creation. Another study in the hoteling sector was focused on the building capabilities processes (Nieves, and Haller, 2014). The study showed that previous, and the individual of the employees, as well as the collective formed the base for creation of dynamic capabilities in the hotels. Some researchers used management capability as a mediating factor. For instance, management capability was used as a mediating variable between practices and experts (Villar et al, 2014). In the same study, management capability was categorized into internal and external development. The study also indicated the relevance of practice of to help managers in order to enhance their ability to deal with dynamic capabilities of small and medium enterprises. Another study looked at the mediating impact of management capability on the relationship between human resource management capabilities, and innovation (Özbağ et al, 2013). In the same study, management capability was used as whole without division into subsidiary elements. The study results indicated that management capability had a partial mediating role in the relationship. Another study looked at the impact of information technology as an enhancement of management dynamic capabilities (Sher and Lee, 2004). The study results indicated that dynamic capabilities were positively influence by both endogenous and exogenous. In the same study, management capability was found as a main source for improving the quality, and excellence of business. Moreover, both exogenous and endogenous represent an important aspect of strategic management in an enterprise. A literature review was conducted to propose and synthesize the elements of management capability in various processes of management in order to its effectiveness (Aujirapongpan et al., 2010). Literature reviews indicated two elements of management capability for effectiveness of management. The first influential factor was resourcebased perspective, consisting of culture, technology, and structure. The second influential factor was a based perspective, consisting of information, expertise, ISSN JISRI All rights reserved Page 3

4 and learning. Another literature review illustrated the dynamic capabilities of management (Nielsen, 2006). The literature review indicated that combination, development of, and use of were the dynamic capabilities of. 5. ELEMENTS OF KMC A look at the previous studies son management capability indicated the important elements of management capability. These elements Table 1, below looks at the survey of the literature based on the management capability elements used by scholars Table 1: Literature Survey Author(s) Study Element of KMC Gold et - KMC in al Business organization process acquisition, application, conversion, protection - Infrastructure structure, technology, Chuang (2004) Liu et al (2004) Nielsen (2006) Cepeda and Vera (2007) competitive advantage competitivene ss of industries - Dynamic capabilities and KMC - Dynamic and operational capabilities culture - Technical resource, structural resource, cultural resource, and Human resource capabilities constructs includes, obtaining, refining, storing and sharing - Capabilities of is found to be development, combination, and use - Designed configuration: mission and value proposition, management infrastructure: people, Freeze and Kulkarni (2007) Fan et al. (2009) Miranda et al (2011) Chang and Chuang (2011) Chen and Fong (2012) assets - Evaluation of KMC - Stock and flows of KMC - Infrastructure capability and business strategy and performance - Performance evaluation through KMC processes, and technology - Elements of KMC are expertise, lessons learned, policies and procedures, data and documents process acquisition, conversion, application, and security. infrastructure technology, structure, and culture - Accumulation of stocks: human resource, technology infrastructure, strategic templates, - Regulation of flows: institutionalizatio n, internal learning processes, and external learning processes. - Infrastructure -based culture, structure, technology, and human resource. - Processes: choice, access, storage, and sharing governance mechanisms: organizational and technological mechanism processes: responsiveness to, ISSN JISRI All rights reserved Page 4

5 Villar et al (2014) Colakaglu et al (2014) Tseng (2014) 6. DISCUSSIONS exports creation capabilities of multinational companies - Influence of KMC and suppliers on company performance acquisition, dissemination, and utilization. - Internal development and - External integration - Subsidiary stocks: internal human capital, internal social capital, and internal organizational capital - Subsidiary inflows: global flows and local flows management Knowledge conversion, protection This reviewed literature showed that most of the scholars in the field of management capability used Gold et al (2001) approach. In the year 2001, Gold et al (2001) proposed the integrated model of management capability. The model was used by the researchers in various extends, some fully, while other adopted the model partially. However, there are also new trends available, which are limited. Scholars tend to categorize the elements of management capability into external and internal, such as a study by Villar et al (2014). In one example, a researcher has used the management capability as a single element (Özbağ et al. 2013). The review of the literature also indicated that latest tends in the management capability study is to discover the details of management capabilities. Another study by Colakaglu et al (2014) examined the capabilities of creation of international companies. Another new trend in management capability studies is looking at it as a single element. Scholars also categorized the capabilities of creation to subsidiary inflow, and stocks. Moreover, studies showed the role of management capability as a mediator. In one study, management capability was used a mediator between capabilities of human resource management, and innovation (Özbağ et al, 2013), while another used management capability as mediator between practices of and experts (Villar et al, 2014). In addition, a review of the literature showed that most of the scholars agreed to divide the infrastructure capability into three elements of culture, technology, and structure. Nonetheless, a new infrastructure element is also emerged. While some scholars included human resource as a part of infrastructure, some stated that processes capability has been consistent with the four processes of Gold et al (2001). 7. CONCLUSIONS AND DIRECTION FOR FUTURE WORK This paper reviewed the body of literature in order to better understand the management capability elements, which have been focused on by other researchers. This study is quantitative in nature, and secondary data was used, from which the study findings were derived. The study showed that many researchers tend to fully or partially adopt the approach of Gold et al (2001). However, some researchers have tried to look at management capability from a different perspective through internal and external elements. This study contributes to the of management capability, as it widely recognized that management capability is divided into process and infrastructure capabilities. The findings of this paper indicate that most of the researchers used this approach regarding management capability research. Therefore, it is suggestible that organization managers consider this categorization of management capability in their decision-making, as well as looking for elements to improve management utilization. In this categorization, processes are suggested to be sharing, creation, and application. Moreover, the background of the study suggested that most of the researchers used culture, technology, andstructure as the elements of infrastructure capability. Therefore, this study suggests that managers use these elements of infrastructure in their utilization of management. The numbers of literature review studies on management capability are limited. Therefore, it is recommended that researchers focus on expanding our understanding of management capability. Future paths of research could include but not limit to the process of management capability, and the infrastructure of management capability. Future studies may also focus on the internal and external elements of management capability. This study also showed that most of the scholars were focused on the capability in general. Nonetheless, recent trend by Colakoglu et al (2014) examined the capabilities of creation. Moreover it is recommended that future studies focus on the capabilities ISSN JISRI All rights reserved Page 5

6 of sharing, and capabilities of application. 8. REFERENCE Alavi, M., & Leidner, D. E. (2001). Review: Knowledge management and management systems: Conceptual foundations and research issues. MIS quarterly, Aujirapongpan, S., Vadhanasindhu, P., Chandrachai, A., & Cooparat, P. (2010). Indicators of management capability for KM effectiveness. VINE, 40(2), Bose, R. (2003). Knowledge management-enabled health care management systems: capabilities, infrastructure, and decision-support. Expert Systems with Applications, 24(1), Cepeda, G., & Vera, D. (2007). Dynamic capabilities and operational A management perspective. Journal of Business Research, 60(5), Chang, T. C., & Chuang, S. H. (2011). Pe rformance implications of management processes: Examining the roles of infrastructure capability and business strategy. Expert Systems with Applications, 38(5), Chen, L., & Fong, P. S. (2012). Revealing performance heterogeneity through management maturity evaluation: A capability-based approach.expert Systems with Applications, 39(18), Chuang, S. H. (2004). A resource -based perspective on management capability and competitive advantage: an empirical investigation. Expert systems with applications, 27(3), Colakoglu, S., Yamao, S., & Lepak, D. P. (2014). Knowledge creation capability in MNC subsidiaries: Examining the roles of global and local inflows and subsidiary stocks. International Business Review, 23(1), Collins, H. (2010). Tacit and explicit. University of Chicago Press. Davenport, T. H. (1994). Saving IT's Soul: Human - Centered Information Management. Harvard business review, 72(2), Desouza, K. C., & Awazu, Y. (2005). Segment and destroy the missing capabilities of management. Journal of Business Strategy, 26(4), Fan, Z. P., Feng, B., Sun, Y. H., & Ou, W. (2009). Evaluating management capability of organizations: a fuzzy linguistic method. Expert Systems with Applications, 36(2), Freeze, R. D., & Kulkarni, U. (2007). Knowledge management capability: defining assets. Journal of Knowledge management, 11(6), Gold, A.H., Malhotra, A., Segars, A.H. (2001), "Knowledge management: an organizational capabilities perspective", Journal of Management Information Systems, Vol. 18 No.1, pp Ju, T. L., Li, C. Y., & Lee, T. S. (2006). A contingency model for management capability and innovation. Industrial Management & Data Systems, 106(6), Liu, P. L., Chen, W. C., & Tsai, C. H. (2004). An empirical study on the correlation between management capability and competitiveness in Taiwan s industries. Technovation, 24(12), Mills, A. M., & Smith, T. A. (2011). Knowledge management and organizational performance: a decomposed view. Journal of Knowledge Management, 15(1), Miranda, S. M., Lee, J. N., & Lee, J. H. (2011). Stocks and flows underlying organizations management capability: Synergistic versus contingent complementarities over time. Information & Management, 48(8), Nielsen, A. P. (2006). Understanding dynamic capabilities through management. Journal of management, 10(4), Nieves, J., & Haller, S. (2014). Building dynamic capabilities through resources. Tourism Management, 40, Nonaka, I., & Takeuchi, H. (1995). The - creating company: How Japanese companies create the dynamics of innovation. Oxford university press. Özbağ, G. K., Esen, M., & Esen, D. (2013). The Impact of HRM Capabilities on Innovation Mediated by Knowledge Management Capability. Procedia-Social and Behavioral Sciences, 99, Sher, P. J., & Lee, V. C. (2004). Information technology as a facilitator for enhancing dynamic capabilities through management. Information & management, 41(8), Tseng, S. M. (2014). The impact of management capabilities and supplier relationship management on corporate performance. International Journal of Production Economics, 154, Villar, C., Alegre, J., & Pla-Barber, J. (2014). Exploring the role of management practices on exports: A dynamic capabilities view. International Business Review, 23(1), AUTHOR PROFILES: Muthana Najim Abdullah, graduated from the University of AL-Anbar, Iraq. He obtained his Bachelors of Information System in Currently, he is a master student of Information Technology at Universiti Tenaga Nasional (UNITEN), Malaysia. Mohammed A. Hashim graduated from the University of Mosul, Iraq. He obtained his Bachelors of computer sciences in Currently, he is a master student of Information Technology at Universiti Tenaga Nasional (UNITEN), Malaysia. Dr. Nor ashikin Ali graduated from Massey University, New Zealand with a Ph.D. in Information Systems. Her PhD work focused on management systems success model in healthcare. She is currently a senior ISSN JISRI All rights reserved Page 6

7 lecturer at Universiti Tenaga Nasional, Malaysia, where she teaches management as her core subject. Her current research focuses on management in healthcare and Malaysian public sectors. ISSN JISRI All rights reserved Page 7