Jump to section
1. Introduction
2. Theoretical framework and hypotheses
3. Methods
4. Results
5. Discussion
6. Conclusion
Knowledge management has been considered a critical strategy for competitive advantage in recent years (Ndlela and du Toit 2001, King 2001). In the context of knowledge management, strategy refers to the organisational intention and enabling condition for organisational knowledge creation (Nonaka and Takeuchi, 1995). Kim, King (2001) observed that knowledge management strategy focuses on the acquisition, explication, and communication of mission-specific professional expertise that is largely tacit in nature to organisational participants and contexts in a manner that is focused, relevant, and timely. Krogh et al. (2001) defined knowledge management strategy as the employment of knowledge processes to an existing or new knowledge domain in order to achieve strategic goals. They developed four strategies for managing knowledge: leveraging, expanding, appropriating, and probing based on knowledge domain and process. However, the current research on the knowledge management strategy-corporate growth performance connection seems far from maturity. Hasan and Al-hawari (2003) stressed the importance of knowledge management strategy by stating that a firm's innovative capacity and performance may be dependent upon its ability to take advantage of its knowledge assets. Capitalisation is one of three instances into which the concept of knowledge management is divided by Kalling (2003), and knowledge management strategy is aimed at helping the firm achieve such capitalisation. Strategic interventions in intellectual asset flows carry implications for firm performance (McGaughey 2002 and Mauborgne (1999) emphasised the role of strategic knowledge management in value innovation.) . Little research offers a detailed understandiMcNamara et al. (2002) found a significant relationship between the complexity of a firm's strategic group knowledge structure and firm performance. Process-oriented knowledge management strategy proposed by Maier and Remus (2003) seeks to ensure the success of knowledge management initiatives. Hitt et al. (2000) considered technological knowledge a main source of growth. Despite a growing interest in the role of knowledge management strategy in achieving corporate growth, there is a lack of credible empirical evidence for high technology firms, which are characterised by their high level of intellectual work (Kelley and Caplan 1993ng about the role of knowledge management strategy in achieving corporate growth in high technology firms. The study aims at filling this gap.
This study offers three additions to the literature on knowledge management strategy.
First, Eisenhardt and Schoonhoven (1990) elaborated that high technology firms, compared with others, are facing severe problems of limited managerial and financial resources. Since knowledge management is characterised as innovative and resource consuming, knowledge management strategy may not be beneficial to high technology firms with limited resources, and may not result in high growth performance. Thus, identifying crucial antecedents of knowledge management strategy becomes an important issue. This study is among the first to develop and test hypotheses on the mediating effects of knowledge management strategy by employing a resource-based view (Amit and Schoemaker 1993, Barney 1991) and growth theory (Penrose 1995) as the theoretical basis.
Second, a high technology industry in China is our research object. Xin and Pearce (1996) suggested that firms face challenges in terms of resource and management in transitional economies. Thus, a Chinese high technology industry presents an interesting setting for investigating the link between knowledge management strategy and growth performance.
Third, the relationship between knowledge management strategy and competitive strategy has been explored deeply. This study analyses the link between knowledge management strategy and growth performance, while considering knowledge management as a dynamic firm capability.
2. Theoretical framework and hypotheses
Jump to section
1. Introduction
2. Theoretical framework and hypotheses
3. Methods
4. Results
5. Discussion
6. Conclusion
There are two major research streams on knowledge management in the literature. The first stream focuses on the increase of knowledge stock and the reuse of knowledge repositories (Barney 1991), based on the delivery of technological solutions (Carrillo et al. 2000). In this stream, knowledge management refers to the developing body of methods, tools, techniques and values through which organisations can acquire, develop, measure, distribute and provide a return on their intellectual assets (Snowden 1999). The second research stream evaluates the processes, organisational structure, and IT applications that enable individuals to leverage their creativity and capabilities to deliver business value, sense and then seize opportunities promptly and effectively (e.g. Teece 2000). In this research stream, knowledge management is defined as a transformation process of tacit knowledge into explicit knowledge in order to facilitate flows of organisational knowledge (Schulz and Jobe 2001, Lubit 2001). Organisation, strategy, and people have become central issues in knowledge management, but IT implementation alone does not result in the success of knowledge management (Brown and Druid 1998).
In prior research, there are two approaches in the latter research stream based on the angle of analysis. Some focus on the project level and investigate knowledge sharing among project teams, marketing and R&D. Knowledge sharing is then investigated relative to improved project performance (shortened cycle time, improved new product quality and successful market launches; e.g. Lee et al. 2001). Other studies emphasise the firm level and examine knowledge management as a dimension of the inimitable competitive strategy of firms (Lubit 2001, Holsapple and Singh 2001), a key to long-term organisational success (Lloyd 1996) or a source of competitive advantage (Ndlela and du Toit 2001). A firm's strategic posture as it relates to knowledge management may differ based on these two broad viewpoints. First, when knowledge is viewed as a resource by itself, the emphasis is on the variety of knowledge management tools, and efficiency and effectiveness in knowledge sharing (Holsapple and Singh 2001, Krogh et al. 2001). Second, the competence viewpoint focuses on knowledge as one of the crucial inputs in innovation and value creation (Lloyd 1996, Ndlela and du Toit 2001). It stresses a firm's dynamic capability, which is an integration of the firm's ability to turn tacit knowledge into core competences (Lubit 2001), organisational learning orientation (Calantone et al. 2002), and the consistency of knowledge management strategy and the firm's strategy (Hansen et al. 1999). In line with the competence viewpoint, the author defines knowledge management strategy as the reflection of a firm's competitive strategy to foster the firm's dynamic capability and create and transfer knowledge by delivering superior value and meeting the evolving expectations of its clients. This study's perspective is that knowledge management is a framework within which the organisation views all its processes as knowledge processes. The key point of knowledge management is to harvest the tacit knowledge residing in individuals and to make it a firm asset, rather than leaving it in the heads of the particular individuals. Therefore, for a high technology firm in China, allocation of substantial resources to knowledge management, development of a variety of knowledge management tools, effective knowledge creation and transfer, timely knowledge acquisition, contribution to organisation's knowledge base, knowledge-oriented environment creation, and support for and encouragement of innovation represent effective knowledge management strategies.
The model in this study is grounded in the theories of resource-based view and firm growth. The resource-based view and corporate growth theory offer interesting insights on knowledge management strategy and growth performance. Penrose (1995) suggests that resources are valuable only to the extent that they can deliver valuable services. The most critical resources are no longer the traditional tangible assets, but an intangible dynamic capability to achieve superior performance (Teece 2000). Consequently, profits come primarily from a core competence that is strictly idiosyncratic (Dierickx and Cool 1989). Knowledge has been the most important strategic resource for high technology firms. Professional knowledge from skilled employees is a major determinant of growth performance, thus the absorption of such production capacity is important for growth (Packer 1964). Growth is an evolutionary process and based on the cumulative growth of collective knowledge (Penrose 1995). ,Grant (1997) stated that the core competence aims at exploring, co-ordinating, and applying different resources within the firm, which is considered as a collection of productive resources. The existence of these unused productive resources and special knowledge, all of which will always be found within a firm, has been regarded as the internal inducement to expand, and expansion has been discussed as one of the ways to achieve growth by Penrose (1995). According to the resource-based view, using this unused knowledge for expansion can increase growth performance through strategic knowledge management. The resource based view stresses that a firm's resource endowment can be a source of profits as long as these resources are heterogeneous in the same industry (Amit and Schoemaker 1993Barney 1991), as heterogeneity of resources is of great importance for the productive opportunity of a firm (Penrose 1995). Firm growth theory indicates that growth
Jump to section
1. Introduction
2. Theoretical framework and hypotheses
3. Methods
4. Results
5. Discussion
6. Conclusion
Knowledge management has been considered a critical strategy for competitive advantage in recent years (Ndlela and du Toit 2001, King 2001). In the context of knowledge management, strategy refers to the organisational intention and enabling condition for organisational knowledge creation (Nonaka and Takeuchi, 1995). Kim, King (2001) observed that knowledge management strategy focuses on the acquisition, explication, and communication of mission-specific professional expertise that is largely tacit in nature to organisational participants and contexts in a manner that is focused, relevant, and timely. Krogh et al. (2001) defined knowledge management strategy as the employment of knowledge processes to an existing or new knowledge domain in order to achieve strategic goals. They developed four strategies for managing knowledge: leveraging, expanding, appropriating, and probing based on knowledge domain and process. However, the current research on the knowledge management strategy-corporate growth performance connection seems far from maturity. Hasan and Al-hawari (2003) stressed the importance of knowledge management strategy by stating that a firm's innovative capacity and performance may be dependent upon its ability to take advantage of its knowledge assets. Capitalisation is one of three instances into which the concept of knowledge management is divided by Kalling (2003), and knowledge management strategy is aimed at helping the firm achieve such capitalisation. Strategic interventions in intellectual asset flows carry implications for firm performance (McGaughey 2002 and Mauborgne (1999) emphasised the role of strategic knowledge management in value innovation.) . Little research offers a detailed understandiMcNamara et al. (2002) found a significant relationship between the complexity of a firm's strategic group knowledge structure and firm performance. Process-oriented knowledge management strategy proposed by Maier and Remus (2003) seeks to ensure the success of knowledge management initiatives. Hitt et al. (2000) considered technological knowledge a main source of growth. Despite a growing interest in the role of knowledge management strategy in achieving corporate growth, there is a lack of credible empirical evidence for high technology firms, which are characterised by their high level of intellectual work (Kelley and Caplan 1993ng about the role of knowledge management strategy in achieving corporate growth in high technology firms. The study aims at filling this gap.
This study offers three additions to the literature on knowledge management strategy.
First, Eisenhardt and Schoonhoven (1990) elaborated that high technology firms, compared with others, are facing severe problems of limited managerial and financial resources. Since knowledge management is characterised as innovative and resource consuming, knowledge management strategy may not be beneficial to high technology firms with limited resources, and may not result in high growth performance. Thus, identifying crucial antecedents of knowledge management strategy becomes an important issue. This study is among the first to develop and test hypotheses on the mediating effects of knowledge management strategy by employing a resource-based view (Amit and Schoemaker 1993, Barney 1991) and growth theory (Penrose 1995) as the theoretical basis.
Second, a high technology industry in China is our research object. Xin and Pearce (1996) suggested that firms face challenges in terms of resource and management in transitional economies. Thus, a Chinese high technology industry presents an interesting setting for investigating the link between knowledge management strategy and growth performance.
Third, the relationship between knowledge management strategy and competitive strategy has been explored deeply. This study analyses the link between knowledge management strategy and growth performance, while considering knowledge management as a dynamic firm capability.
2. Theoretical framework and hypotheses
Jump to section
1. Introduction
2. Theoretical framework and hypotheses
3. Methods
4. Results
5. Discussion
6. Conclusion
There are two major research streams on knowledge management in the literature. The first stream focuses on the increase of knowledge stock and the reuse of knowledge repositories (Barney 1991), based on the delivery of technological solutions (Carrillo et al. 2000). In this stream, knowledge management refers to the developing body of methods, tools, techniques and values through which organisations can acquire, develop, measure, distribute and provide a return on their intellectual assets (Snowden 1999). The second research stream evaluates the processes, organisational structure, and IT applications that enable individuals to leverage their creativity and capabilities to deliver business value, sense and then seize opportunities promptly and effectively (e.g. Teece 2000). In this research stream, knowledge management is defined as a transformation process of tacit knowledge into explicit knowledge in order to facilitate flows of organisational knowledge (Schulz and Jobe 2001, Lubit 2001). Organisation, strategy, and people have become central issues in knowledge management, but IT implementation alone does not result in the success of knowledge management (Brown and Druid 1998).
In prior research, there are two approaches in the latter research stream based on the angle of analysis. Some focus on the project level and investigate knowledge sharing among project teams, marketing and R&D. Knowledge sharing is then investigated relative to improved project performance (shortened cycle time, improved new product quality and successful market launches; e.g. Lee et al. 2001). Other studies emphasise the firm level and examine knowledge management as a dimension of the inimitable competitive strategy of firms (Lubit 2001, Holsapple and Singh 2001), a key to long-term organisational success (Lloyd 1996) or a source of competitive advantage (Ndlela and du Toit 2001). A firm's strategic posture as it relates to knowledge management may differ based on these two broad viewpoints. First, when knowledge is viewed as a resource by itself, the emphasis is on the variety of knowledge management tools, and efficiency and effectiveness in knowledge sharing (Holsapple and Singh 2001, Krogh et al. 2001). Second, the competence viewpoint focuses on knowledge as one of the crucial inputs in innovation and value creation (Lloyd 1996, Ndlela and du Toit 2001). It stresses a firm's dynamic capability, which is an integration of the firm's ability to turn tacit knowledge into core competences (Lubit 2001), organisational learning orientation (Calantone et al. 2002), and the consistency of knowledge management strategy and the firm's strategy (Hansen et al. 1999). In line with the competence viewpoint, the author defines knowledge management strategy as the reflection of a firm's competitive strategy to foster the firm's dynamic capability and create and transfer knowledge by delivering superior value and meeting the evolving expectations of its clients. This study's perspective is that knowledge management is a framework within which the organisation views all its processes as knowledge processes. The key point of knowledge management is to harvest the tacit knowledge residing in individuals and to make it a firm asset, rather than leaving it in the heads of the particular individuals. Therefore, for a high technology firm in China, allocation of substantial resources to knowledge management, development of a variety of knowledge management tools, effective knowledge creation and transfer, timely knowledge acquisition, contribution to organisation's knowledge base, knowledge-oriented environment creation, and support for and encouragement of innovation represent effective knowledge management strategies.
The model in this study is grounded in the theories of resource-based view and firm growth. The resource-based view and corporate growth theory offer interesting insights on knowledge management strategy and growth performance. Penrose (1995) suggests that resources are valuable only to the extent that they can deliver valuable services. The most critical resources are no longer the traditional tangible assets, but an intangible dynamic capability to achieve superior performance (Teece 2000). Consequently, profits come primarily from a core competence that is strictly idiosyncratic (Dierickx and Cool 1989). Knowledge has been the most important strategic resource for high technology firms. Professional knowledge from skilled employees is a major determinant of growth performance, thus the absorption of such production capacity is important for growth (Packer 1964). Growth is an evolutionary process and based on the cumulative growth of collective knowledge (Penrose 1995). ,Grant (1997) stated that the core competence aims at exploring, co-ordinating, and applying different resources within the firm, which is considered as a collection of productive resources. The existence of these unused productive resources and special knowledge, all of which will always be found within a firm, has been regarded as the internal inducement to expand, and expansion has been discussed as one of the ways to achieve growth by Penrose (1995). According to the resource-based view, using this unused knowledge for expansion can increase growth performance through strategic knowledge management. The resource based view stresses that a firm's resource endowment can be a source of profits as long as these resources are heterogeneous in the same industry (Amit and Schoemaker 1993Barney 1991), as heterogeneity of resources is of great importance for the productive opportunity of a firm (Penrose 1995). Firm growth theory indicates that growth
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