2.1. Model components and hypotheses
Knowledge management strategy is a firm's approach to managing the intellectual, or human, capital in such a manner as to facilitate the gathering, storage, and exchange of information within the organisation (Greenberg and Baron 2003). The ability to capture the knowledge and experience of a firm's employees and share that same knowledge and experience among other employees within the firm will obviously spark innovation and improvement in existing processes (Soo et al. 2002). Numerous firm performance studies emphasise knowledge management from a strategic stance (e.g. Holsapple and Singh 2001, McNamara et al. 2002).) .
H1: A firm's strategic performance is positively influenced by the knowledge management strategy.
Knowledge is now uNdlela and du Toit (2001) pointed out that knowledge management affects the firm performance through its efficiency in developing the intellectual assets that are a source of competitive advantage. Developing a knowledge management strategy for a firm directly increases the innovative performance of the firm and ultimately filters through to the bottom line (Soo et al. 2002niversally acknowledged as the prime driving force for economic progress, the access to and use of knowledge for innovation and growth is a prequisite for sustainable success (Ganguly 2000). A firm's success is largely dependent on its ability to capture and exchange critical information in order to sustain or grow its competitive advantage. Organisational knowledge tends to reside at the individual level, which results in poor feedback systems and very little production of new knowledge (Brown and Woodland 1999). As a result, the use of a knowledge management strategy increases the firm's long-term corporate growth through new product innovations.
H2: A firm's long-term corporate growth is positively influenced by the knowledge management strategy.
Packer (1964) portrayed the impacts of production and professional resources on growth performance and defined professional effort as one resource derived from managerial and engineering talent. For high technology firms, innovation capability is the reflection of such efforts, which has been a driver of strategic performance. Corporate growth accelerates through innovation and the identification of external opportunities (Canals 2001). High strategic performance enables an organisation to grow and enrich its corporate growth performance. A firm's long-term corporate growth is directly and positively related to how successful it is in developing and implementing its strategy (Kotha and Nair 1995).
H3: A firm's long-term corporate growth is positively related to its strategic performance.
A firm's learning orientation is the degree of commitment the organisation has to ‘developing and using its information and knowledge capabilities in order to create higher-valued information and knowledge, to change behaviours, and to improve bottom-line results’ (King 2001). A learning orientation facilitates learning through organisational processes such as formal training and practice in effective teamwork (King 2001), the employment of organisational development (Albrecht 1983), change management (Connor and Lake 1994), case management, empowerment, and continuous improvement techniques and programs (Davenport 1993). Learning orientation affects the extent to which a firm is likely to promote generative learning as a long-lasting core competency (Hunt and Morgan 1996). Since the effectiveness of knowledge management strategy is directly related to the effectiveness of an organisation's ability to gather, organise, and share knowledge, a learning orientation motivates the firm to manage its intellectual assets strategically.
H4: The knowledge management strategy is positively influenced by a firm's learning orientation.
Learning orientation has been acknowledged as important to firm performance (Slater and Narver 1994). A firm with a strong learning orientation will exhibit organisational learning as well as individual learning. Individuals in a firm with a strong learning orientation can and will seek opportunities to grow their knowledge and skills. Consequently, the level of commitment a firm has to organisational and individual learning will positively influence the knowledge management strategy of the firm.
H4a: The greater the level of learning orientation, the greater is the likelihood that knowledge management strategy will lead to greater strategic performance.
Environmental turbulence is defined as the degree of perceived hostility in the environment stemming from competition (Pelham and Wilson 1996). As external environmental pressures continue to mount against firms at an increasing rate and increase in complexity, the need to develop quality effective knowledge management strategies grows in importance for firms in developing economies. As functional differences in similar product offerings diminish at an increasing rate, there is less and less time allowed for product concept, design, production, and offering in order to sustain the firm's competitive advantage. This increasing complexity and environmental turbulence results in growing demand for effectively processing information and making quick decisions.
H5: The knowledge management strategy is positively influenced by a firm's environmental turbulence.
Knowledge management strategy is positively influenced by a firm's environmental turbulence in that these pressures will continue to accentuate the importance of knowledge management, creating more focus on effectively managing a firm's knowledge and expertise. With the absence of environmental turbulence, the implementation of knowledge management strategy is more successful in achieving high strategic performance. This is because environmental turbulence may result in the reduction of the value of knowledge acquired in prior experiences, which forces the firm to collect more information and acquire more knowledge (Weiss and Heide 1993) to fit the firm's existing knowledge management strategy for performance.
H5a: The greater the level of environmental turbulence, the greater is the likelihood that knowledge management strategy will lead to greater strategic performance.
Technological turbulence refers to the degree of change associated with new product technologies (Weiss and Heide 1993, Jaworski and Kohli 1993). Technology-based innovation sparking the rapid change or turbulence in technology brings the firm opportunities in that the capacity, mobility, and general usefulness of the newer emerging technology grants more control for firms which are attempting to capture the knowledge that will help the firm sustain its competitive advantage. Five grades of firm, from grade zero to grade four, have been distinguished by Alain (1988) based on different levels of the role played by technology in the decision-making process of a firm. Among them, firms categorised in grades three and four are representative of high technology firms in developing economies. Both of these firms highly integrate technology and knowledge management in their strategies. Advances in technology over the last decade have made it possible for firms to capture vast data; furthermore, these firms have been enabled through technological advances to share this information throughout the organisation effectively (Sharp 2003).
H6: The knowledge management strategy is positively influenced by technological turbulence.
Moorman and Miner (1997) suggested that a firm might be better off under turbulent conditions because the firm can draw on its competences, which are creative engines in times of high turbulence. Technology on its own has been regarded a tool that captures the source of competitive advantage (Webber 1993). Given that knowledge management strategy is positively influenced by the rapid advances in technology available to firms, this suggests that, in the presence of technological turbulence, the firm can be triggered to aptly implement effective knowledge management strategy to achieve high strategic performance through the increased heterogeneity in resources, which may bring the firm value under turbulent conditions (Miner 1994).
H6a: The greater the level of technological turbulence, the greater is the likelihood that knowledge management strategy will lead to greater strategic performance.
th
2.1. Model components and hypotheses
Knowledge management strategy is a firm's approach to managing the intellectual, or human, capital in such a manner as to facilitate the gathering, storage, and exchange of information within the organisation (Greenberg and Baron 2003). The ability to capture the knowledge and experience of a firm's employees and share that same knowledge and experience among other employees within the firm will obviously spark innovation and improvement in existing processes (Soo et al. 2002). Numerous firm performance studies emphasise knowledge management from a strategic stance (e.g. Holsapple and Singh 2001, McNamara et al. 2002).) .
H1: A firm's strategic performance is positively influenced by the knowledge management strategy.
Knowledge is now uNdlela and du Toit (2001) pointed out that knowledge management affects the firm performance through its efficiency in developing the intellectual assets that are a source of competitive advantage. Developing a knowledge management strategy for a firm directly increases the innovative performance of the firm and ultimately filters through to the bottom line (Soo et al. 2002niversally acknowledged as the prime driving force for economic progress, the access to and use of knowledge for innovation and growth is a prequisite for sustainable success (Ganguly 2000). A firm's success is largely dependent on its ability to capture and exchange critical information in order to sustain or grow its competitive advantage. Organisational knowledge tends to reside at the individual level, which results in poor feedback systems and very little production of new knowledge (Brown and Woodland 1999). As a result, the use of a knowledge management strategy increases the firm's long-term corporate growth through new product innovations.
H2: A firm's long-term corporate growth is positively influenced by the knowledge management strategy.
Packer (1964) portrayed the impacts of production and professional resources on growth performance and defined professional effort as one resource derived from managerial and engineering talent. For high technology firms, innovation capability is the reflection of such efforts, which has been a driver of strategic performance. Corporate growth accelerates through innovation and the identification of external opportunities (Canals 2001). High strategic performance enables an organisation to grow and enrich its corporate growth performance. A firm's long-term corporate growth is directly and positively related to how successful it is in developing and implementing its strategy (Kotha and Nair 1995).
H3: A firm's long-term corporate growth is positively related to its strategic performance.
A firm's learning orientation is the degree of commitment the organisation has to ‘developing and using its information and knowledge capabilities in order to create higher-valued information and knowledge, to change behaviours, and to improve bottom-line results’ (King 2001). A learning orientation facilitates learning through organisational processes such as formal training and practice in effective teamwork (King 2001), the employment of organisational development (Albrecht 1983), change management (Connor and Lake 1994), case management, empowerment, and continuous improvement techniques and programs (Davenport 1993). Learning orientation affects the extent to which a firm is likely to promote generative learning as a long-lasting core competency (Hunt and Morgan 1996). Since the effectiveness of knowledge management strategy is directly related to the effectiveness of an organisation's ability to gather, organise, and share knowledge, a learning orientation motivates the firm to manage its intellectual assets strategically.
H4: The knowledge management strategy is positively influenced by a firm's learning orientation.
Learning orientation has been acknowledged as important to firm performance (Slater and Narver 1994). A firm with a strong learning orientation will exhibit organisational learning as well as individual learning. Individuals in a firm with a strong learning orientation can and will seek opportunities to grow their knowledge and skills. Consequently, the level of commitment a firm has to organisational and individual learning will positively influence the knowledge management strategy of the firm.
H4a: The greater the level of learning orientation, the greater is the likelihood that knowledge management strategy will lead to greater strategic performance.
Environmental turbulence is defined as the degree of perceived hostility in the environment stemming from competition (Pelham and Wilson 1996). As external environmental pressures continue to mount against firms at an increasing rate and increase in complexity, the need to develop quality effective knowledge management strategies grows in importance for firms in developing economies. As functional differences in similar product offerings diminish at an increasing rate, there is less and less time allowed for product concept, design, production, and offering in order to sustain the firm's competitive advantage. This increasing complexity and environmental turbulence results in growing demand for effectively processing information and making quick decisions.
H5: The knowledge management strategy is positively influenced by a firm's environmental turbulence.
Knowledge management strategy is positively influenced by a firm's environmental turbulence in that these pressures will continue to accentuate the importance of knowledge management, creating more focus on effectively managing a firm's knowledge and expertise. With the absence of environmental turbulence, the implementation of knowledge management strategy is more successful in achieving high strategic performance. This is because environmental turbulence may result in the reduction of the value of knowledge acquired in prior experiences, which forces the firm to collect more information and acquire more knowledge (Weiss and Heide 1993) to fit the firm's existing knowledge management strategy for performance.
H5a: The greater the level of environmental turbulence, the greater is the likelihood that knowledge management strategy will lead to greater strategic performance.
Technological turbulence refers to the degree of change associated with new product technologies (Weiss and Heide 1993, Jaworski and Kohli 1993). Technology-based innovation sparking the rapid change or turbulence in technology brings the firm opportunities in that the capacity, mobility, and general usefulness of the newer emerging technology grants more control for firms which are attempting to capture the knowledge that will help the firm sustain its competitive advantage. Five grades of firm, from grade zero to grade four, have been distinguished by Alain (1988) based on different levels of the role played by technology in the decision-making process of a firm. Among them, firms categorised in grades three and four are representative of high technology firms in developing economies. Both of these firms highly integrate technology and knowledge management in their strategies. Advances in technology over the last decade have made it possible for firms to capture vast data; furthermore, these firms have been enabled through technological advances to share this information throughout the organisation effectively (Sharp 2003).
H6: The knowledge management strategy is positively influenced by technological turbulence.
Moorman and Miner (1997) suggested that a firm might be better off under turbulent conditions because the firm can draw on its competences, which are creative engines in times of high turbulence. Technology on its own has been regarded a tool that captures the source of competitive advantage (Webber 1993). Given that knowledge management strategy is positively influenced by the rapid advances in technology available to firms, this suggests that, in the presence of technological turbulence, the firm can be triggered to aptly implement effective knowledge management strategy to achieve high strategic performance through the increased heterogeneity in resources, which may bring the firm value under turbulent conditions (Miner 1994).
H6a: The greater the level of technological turbulence, the greater is the likelihood that knowledge management strategy will lead to greater strategic performance.
th
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