Skip to main content
SpringerLink
Log in

Managing knowledge performance: testing the components of a knowledge management system on organizational performance

  • Published:
Asia Pacific Education Review Aims and scope Submit manuscript

Abstract

The main purpose of the current study is to validate the framework of knowledge management (KM) capabilities created by Gold (Towards a theory of organizational knowledge management capabilities. Doctoral dissertation, University of North Carolina, Chapel Hill) 2001) in a study of South Korean companies. However, the original framework did not provide a thorough explanation of the effect of incentives, which motivate and encourage the knowledge management process. In this study, the modified framework that includes incentives in the knowledge infrastructure capability was tested. Moreover, since there is a weak linkage between KM and organizational performance, this study used empirical evidence to identify the relationship between KM capabilities (KMC) and four perspectives of organizational performance. Since structural equation modeling (SEM) is mostly used to describe causal relationships among unobserved (latent) and observed variables, this study used SEM procedures to determine whether there were any structural relationships between knowledge management capabilities and four perspectives of organizational performance. Moreover, the SEM procedure is “a statistical test to find whether a model fits a set of data, whether it matches a theoretical expectation” (Vogt, Dictionary of statistics & methodology. Sage Publications Inc., Thousand Oaks, CA, p 135, 2005). Therefore, this study also used SEM procedures to test a hypothesized model that had a good fit indicates that the model adequately describes the sample data. This study assumed that knowledge management capabilities could be divided into two types: knowledge infrastructure and process capabilities. The original hypothesized model showed that there was a positive relationship between knowledge management capabilities and organizational performance, but the overall model fit was insufficient to be accepted, because knowledge infrastructure and process capabilities were highly correlated. This study proposed two alternative models to find the best fit and found that knowledge infrastructure and process capabilities should be combined under the higher-order latent variable as subordinate latent variables. Lastly, there was a positive relationship between KMC and organizational performance. This study might not be free from common method bias to some degrees. It would be better to divide participants into two groups to respond to either the knowledge management capabilities survey or the organizational performance survey and to investigate the correlation between them. There are two main contributions for the field of knowledge management. First, this study attempted to integrate the fragmented literature of knowledge management into a holistic view and develop a framework for knowledge management. Moreover, this study found that there is a strong and positive relationship between KM infrastructure and process, which could refer that, to improve organizational performance, an organization should support KM processes, as well as build decent KM infrastructure. The results of this study would help KM practitioners to advocate the importance of KM to top managements.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

References

  • Alavi, M., & Leidner, D. E. (1999). Knowledge management systems: Issues, challenges, and benefits. Communications of the AIS, 1(7), Retrieved from http://www.belkcollege.uncc.edu/jpfoley/Readings/artic07.pdf.

  • Allee, V. (1999). Knowledge of learning? Retrieved from http://www.vernaallee.com/knowledge_management/Knowledge_or_Learning.pdf.

  • Amit, R., & Schoemaker, P. J. H. (1993). Strategic assets and organizational rent. Strategic Management Journal, 14(1), 33–46.

    Article  Google Scholar 

  • Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in practice: a review and recommended two-step approach. Psychological Bulletin, 103(3), 411–423.

    Article  Google Scholar 

  • Bock, G. W., Zmud, R. W., Kim, Y. G., & Lee, J. N. (2005). Behavioral intention formation in knowledge sharing: Examining the roles of extrinsic motivators, social-psychological forces, and organizational climate. MIS Quarterly: Management Information Systems, 29, 87–111.

    Google Scholar 

  • Brown, M. G. (2007). Beyond the balanced scorecard: Improving business intelligence with analytics. New York, NY: Productivity Press.

    Google Scholar 

  • Büchel, B., & Probst, G., (2000). From organizational learning to knowledge management. Retrieved from http://hec.info.unige.ch/recherches_publication/cahiers/2000/2000.11.pdf.

  • Byrnes, J. (2005). Middle management excellence. Harvard Business School Working Knowledge for Business Leaders. Retrieved from http://hbswk.hbs.edu/archive/5126.html.

  • Carrillo, P. M., Robinson, H. S., Anumba, C. J., & Al-Ghassani, A. M. (2003). IMPaKT: A framework for linking knowledge management to business performance. Electronic Journal of Knowledge Management, 1(1), 1–12.

    Google Scholar 

  • Casselman, R. M., & Samson, D. (2007). Aligning knowledge strategy and knowledge capabilities. Technology Analysis & Strategic Management, 19(1), 69–81.

    Article  Google Scholar 

  • Choi, B., & Lee, H. (2003). An empirical investigation of KM styles and their effect on corporate performance. Information and Management, 40, 403–417.

    Article  Google Scholar 

  • Chong, C. W., Holden, T., Wihelmij, P., & Schmidt, R. A. (2000). Where does knowledge management add value? Journal of Intellectual Capital, 1(4), 366–383.

    Article  Google Scholar 

  • Chou, S. W., & He, M. Y. (2004). Facilitating knowledge creation by knowledge assets. In Paper presented at the meeting of the 37th Hawaii International Conference on System Sciences.

  • Cochran, W. G. (1977). Sample techniques (3rd ed.). New York, NY: Wiley.

    Google Scholar 

  • Cox, T, Jr. (1993). Cultural diversity in organization: Theory, research & practice. San Francisco, CA: Berrett-Koehler Publishers Inc.

    Google Scholar 

  • Cummings, T. G., & Worley, C. G. (2005). Organization development & change (8th ed.). Mason, OH: Thomson South-Western.

  • Davenport, T. H., De Long, D. W., & Beers, M. C. (1998). Successful knowledge management projects (pp. 43–57). Winter: Sloan Management Review.

    Google Scholar 

  • Davenport, T. H., & Prusak, L. (1998). Information politics. Sloan Management Review, 34(1), 53–63.

    Google Scholar 

  • Dawson, R. (2000). Knowledge capabilities as the focus of organizational development and strategy. Journal of Knowledge Management, 4(4), 320–327.

    Article  Google Scholar 

  • De Long, D. (1997). Building the knowledge-based organization: How culture drives knowledge behaviors. Ernst & Young Center for Business Innovation, Working Paper, Boston.

  • De Vaus, D. (2008). Analyzing social science data. Thousand Oaks, CA: Sage Publication Ltd.

    Google Scholar 

  • Desouza, K. C., & Vanapalli, G. K. (2005). The role of incentives in knowledge management: How to enhance knowledge transfer. In K. C. Desouza (Ed.), New frontiers of knowledge management (pp. 76–98). New York, NY: Palgrave McMillan Ltd.

    Google Scholar 

  • Donaldson, S. I., & Grant-Vallone, E. J. (2002). Understanding self-report bias in organizational behavior research. Journal of Business and Psychology, 17(2), 245–260.

    Article  Google Scholar 

  • Ehlers, T., & Lazenby, K. (2004). Strategic management: Southern African cases and concepts. Pretoria, South Africa: Van Schaik.

    Google Scholar 

  • Evaristo, R. (2005). The role of incentives in knowledge management: How to enhance knowledge transfer. In K. C. Desouza (Ed.), New frontiers of knowledge management (pp. 230–242). New York, NY: Palgrave McMillan Ltd.

    Google Scholar 

  • Fan, Z. P., Feng, B., Sun, Y. H., & Ou, W. (2009). Evaluating knowledge management capability of organizations: a fuzzy linguistic method. Expert Systems with Applications, 36, 3346–3354.

    Article  Google Scholar 

  • Frappaolo, C. (2006). Knowledge management. Souther Gate Chichester, West Sussex, England: Capstone Publishing Ltd.

  • Gammelgaard, J. (2007). Why not use incentives to encourage knowledge sharing. Journal of Knowledge Management Practice, 8(1), Retrieved from http://www.tlainc.com/articl127.htm.

  • Gold, A. H. (2001). Towards a theory of organizational knowledge management capabilities. Doctoral dissertation. Chapel Hill: University of North Carolina.

    Google Scholar 

  • Gold, A. H., Malhotra, A., & Segars, A. H. (2001). Knowledge management: An organizational capabilities perspective. Journal of Management Information Systems, 18(1), 185–214.

    Google Scholar 

  • Gorelick, C., & Tantawy-Monsou, B. (2005). For performance through learning, knowledge management is the critical practice. The Learning Organization, 12(2), 125–139.

  • Gorsuch, R. L. (1983). Factor analysis. Hillsdale, NJ: Lawrence Erlbaum Associates Inc.

    Google Scholar 

  • Grant, R. M. (1991). The resource-based theory of competitive advantage: Implication for strategy formulation. California Management Review, 33(3), 114–135.

    Article  Google Scholar 

  • Grant, R. M. (1996). Toward a knowledge-based theory of the firm. Strategic Management, 17, 109–122.

  • Guadagnoli, E., & Velicer, W. F. (1988). Relation of sample size to the stability of component patterns. Psychological Bulletin, 103(2), 265–275.

    Article  Google Scholar 

  • Hansen, M. T., Nohria, N., & Tierney, T. (1999). What’s your strategy for managing knowledge? Harvard Business Review, 77(2), 106–116.

  • Hatcher, L. (1994). A step-by-step approach to using the SAS system for factor analysis and structural equation modeling. Cary, NC: SAS Institute Inc.

    Google Scholar 

  • Hauschild, S., Licht, T., & Stein, W. (2001). Creating a knowledge culture (pp. 74–81). Winter: The McKinsey Quarterly.

    Google Scholar 

  • Huang, H. C. (2009). Designing a knowledge-based system for strategic planning: A balanced scorecard perspective. Expert Systems with Applications, 36, 209–218.

    Article  Google Scholar 

  • Huy, Q. N. (2001). In praise of middle managers. Harvard Business Review, 79(8), 72–79.

    Google Scholar 

  • Iftikhar, Z. (2003). Developing an instrument for knowledge management project evaluation. Electronic Journal of Knowledge Management, 1(1), 55–62.

    Google Scholar 

  • Jones, P. M. (2001). Collaborative knowledge management, social networks, and organizational learning. In M. J. Smith & G. Salvendy (Eds.). System, social and internationalization design aspects of human-computer interaction (Vol. 2, pp. 306–309). Mahwah, NJ: Lawrence Erlbaum Associates, Inc.

  • Kanji, G. K., & Sá, P. M. (2002). Kanji’s business scorecard. Total Quality Management, 13(1), 13–27.

    Article  Google Scholar 

  • Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard – Measures that drive performance. Harvard Business Review, 70(1), 71–79.

    Google Scholar 

  • Kaplan, R. S., & Norton, D. P. (1996). Using the balanced scorecard as a strategic management system. Harvard Business Review, 74(1), 75–85.

    Google Scholar 

  • Kaplan, R. S., & Norton, D. P. (2001a). Transforming the balanced scorecard from performance measurement to strategic management: Part I. Accounting Horizons, 15(1), 87–104.

    Article  Google Scholar 

  • Kaplan, R. S., & Norton, D. P. (2001b). Transforming the balanced scorecard from performance measurement to strategic management: Part II. Accounting Horizons, 15(2), 147–160.

    Article  Google Scholar 

  • Khalifa, M., & Liu, V. (2003). Determinants of successful knowledge management programs. Electronic Journal of Knowledge Management, 1(2), 103–111. Retrieved from http://www.ejkm.com.

  • Khan, A. (2005). Matching people with organizational culture. Retrieved from http://www.themanager.org/HR/Matching_People_with_Organizational_Culture.pdf.

  • Kim, A., & Lim, E. Y. (1999). How critical is back translation in cross-cultural adaptation of attitude measurement?. Montreal, Quebec, Canada: Proceedings of the American Educational Research Association.

    Google Scholar 

  • Kline, R. B. (2005). Principles and practice of structural equation modeling. New York, NY: Guilford Press.

    Google Scholar 

  • Martin, K. (2003). Evaluating the benefits of knowledge management. Retrieved from Contemporary Practice: http://www.providersedge.com/docs/km_articles/Evaluating_the_Benefits_of_KM.pdf.

  • Milam, J. (2005). Organizational learning through knowledge workers and infomediaries. New Directions for Higher Education, 131, 61–73.

    Article  Google Scholar 

  • Milton, N. R. (2007). Knowledge acquisition in practice: a step-by-step guide. London, UK: Springer.

    Google Scholar 

  • Nemati, B., Ghaemi, V., & Rashidi, M. (2013). The effect of KM implementation on organizational performance with balanced scorecard methodology. Management Science Letters, 3(3), 1025–1036.

    Article  Google Scholar 

  • Niven, P. R. (2006). Balanced scorecard step-by-step: Maximizing performance and maintaining results. New York, NY: Wiley.

    Google Scholar 

  • Nonaka, I. (1988). Toward middle-up-down management: Accelerating information creation. Sloan Management Review, 29(3), 9–18.

    Google Scholar 

  • Nonaka, I. (1994). A dynamic theory of organizational knowledge creation. Organization Science, 5(1), 14–37.

    Article  Google Scholar 

  • Nonaka, I., von Krogh, G., & Voelpel, S. (2006). Organizational knowledge creation theory: Evolutionary paths and future advances. Organization Studies, 27(8), 1179–1208.

    Article  Google Scholar 

  • Orlikowski, W. J. (1992). The duality of technology: Rethinking the concept of technology in organizations. Organization Science, 3(3), 398–427.

    Article  Google Scholar 

  • Osterloh, M., & Frey, B. S. (2000). Motivation, knowledge transfer, and organizational form. Organization Science, 11(5), 538–550.

    Article  Google Scholar 

  • Pauleen, D. J., Wu, L., & Dexter, S. (2007). Exploring the relationship between national and organizational culture, and knowledge management. In D. J. Pauleen (Ed.), Cross-cultural perspectives on knowledge management (pp. 3–19). Westport, CT: Libraries Unlimited.

    Google Scholar 

  • Raykov, T., & Marcoulides, G. A. (2006). A first course in structural equation modeling (2nd ed.). Mahwah, NJ: Lawrence Erlbaum Associates Inc.

    Google Scholar 

  • Sabherwal, R., & Sabherwal, S. (2007). How do knowledge management announcements affect firm value? A study of firms pursuing different business strategies. IEEE Transactions on Engineering Management, 54(3), 409–422.

    Article  Google Scholar 

  • Sanchez, R. (2005). Knowledge management and organizational learning: Fundamental concepts for theory and practice. Lund Institute of Economic Research Working Paper Series, 3, 1–32.

    Google Scholar 

  • Senge, P. M. (1994). The fifth discipline: The art and practice of the learning organization. New York, NY: Currency Doubleday.

    Google Scholar 

  • Smith, R. F. (2006). Business process management and the balanced scorecard: using processes as strategic drivers. New York, NY: Wiley.

    Google Scholar 

  • Stajkovic, A. D., & Luthans, F. (2001). Differential effects of incentive motivators on work performance. Academy of Management Journal, 4(3), 580–590.

    Article  Google Scholar 

  • Suresh, J. K. (2002). KM and human resources management. Retrieved from Knowledge Board: http://www.providersedge.com/docs/km_articles/KM_and_HR_Management.pdf.

  • Suresh, J. K., & Mahesh, K. (2006). Ten steps to maturity in knowledge management: Lessons in economy Oxford, UK: Chandos Publishing

  • Teece, D. J. (1986). Profiting from technological innovation: Implications for integration, collaboration, licensing and public. Research Policy, 15(6), 285–305.

    Article  Google Scholar 

  • Urdan, T. C. (2005). Statistics in plain English (2nd ed.). Mahwah, NJ: Lawrence Erlbaum Associates Inc.

    Google Scholar 

  • Vera, D., & Crossan, M. (2004). Strategic leadership and organizational learning. Academy of Management Review, 29(2), 222–240.

    Google Scholar 

  • Vogt, W. P. (2005). Dictionary of statistics & methodology. Thousand Oaks, CA: Sage Publications, Inc.

  • Von Krogh, G. (1998). Care in knowledge creation. California Management Review, 40(3), 133–153.

    Article  Google Scholar 

  • Walker, S. (2006). 12 steps to a successful KM program. KM Review, 9(4), 8–9.

    Google Scholar 

  • Wolfe, C., & Loraas, T. (2008). Knowledge sharing: The effects of incentives, environment, and person. Journal of Information Systems, 22(2), 53–76.

    Article  Google Scholar 

  • Yen, A. L. L. (2001). Creating knowledge management systems. Retrieved from http://www.providersedge.com/docs/km_articles/Creating_KM_Systems.pdf.

  • Zack, M. H. (1999). Developing a knowledge strategy. California Management Review, 41(3), 125–145.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Business Administration, The University of Suwon, Hwaseong Si, South Korea

    Taejun Cho

  2. Department of Organization Learning, Performance, and Change, Colorado State University, 1588 Campus Delivery, Fort Collins, CO, 80523, USA

    Russell Korte

Authors
  1. Taejun Cho
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Russell Korte
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Taejun Cho.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Cho, T., Korte, R. Managing knowledge performance: testing the components of a knowledge management system on organizational performance. Asia Pacific Educ. Rev. 15, 313–327 (2014). https://doi.org/10.1007/s12564-014-9333-x

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s12564-014-9333-x

Keywords

Search

Navigation