knowledge management practices within hong kong firms

8/9/2019 Knowledge Management Practices within Hong Kong Firms

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Knowledge management practices withinHong Kong organizations

The Author

Dr. Robert R. Edmonson, CEO of Paradigm21 Group a Hong Kong managementconsultancy, executive coaching and corporate training organization; Adjunct professor

with University of Bradford (UK) and University of Sunderland (UK) Hong Kong MBAprograms. Dr Edmonson is also the author of the popular leadership book entitled, In

Chaotic Times.What Great Leaders (Should) Know.

Abstract

Purpose This paper investigates how knowledge is currently being collected, distributed,managed and the perspective of KMs strategic significance to performance within a broad

range of Hong Kong organizations.

Design/methodology/approach A questionnaire was administered to a broad crosssection of Hong Kong business organizations to elicit input regarding current knowledgemanagement practices within the organization, their perspective on its value toorganizational performance and competitive advantages.

Findings The results indicate a fuzziness exists concerning KMs potential benefits.Majority of respondents felt a KM policy existed, while a smaller number did not and evenless did not know. Findings show a high dependence on personal networks and a highuse of IT tools such as Intranet, Groupware and other decision support tools. Barriers tosharing included power loss, appearing dependent, a basic unwillingness to share with

national culture possibly playing a role. Incentives did not appear to encourage sharingwith management of KM programs not focused on a particular department or individual.Respondents were evenly divided over strategic benefits but felt the existence of aninternal culture that promoted sharing could result in competitive market advantages.

Practical implications Firstly, it provides a better understanding of KM issues withinHong Kong organizations, the current status of KMs implementation and readiness toaccept and adopt best KM practices. Secondly, the findings also offer businesspractitioners a better understanding of the internal mechanisms necessary to leverage afirms specific resources. Finally, the results shed additional clarity on the fuzzinesssurrounding KMs correlation to being strategically significant to the firm.

Originality/value Unlike previous studies the project used a holistic approach asopposed to best practices firms. The findings contribute to previous research and provideinsights into current practices which identified differences and gaps; recognized areas ofimprovement; and should help stimulate use of KM and provided an understanding ofinternal mechanisms necessary to leverage internal resources.

Article Type: Research paperKeyword(s): Knowledge management; human capital; strategic planning; sustainablecompetitive advantage; information; communities of practice, Hong Kong.


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1.0 Introduction

The global business environment has amplified the importance of the unique knowledge

that organizations possess (Singh et al., 2006). Additionally, the value of its human

resources and the knowledge possessed has long been recognized for its contribution to

corporate success (Ritter and Choi, 2000). This has established knowledge management(KM) as the foundation to competitive advantages and is viewed as a primary competitive

success factor and vital that corporations implement inventive knowledge management

tools and corporate actions to significantly affect, add to and maintain market advantages

(Ritter and Choi, 2000; Grossman, 2006; KMPG, 2003).

As a result, the concept of organizational knowledge, the way it is controlled and

intellectual assets has attracted increased management awareness and organizational

researchers have branded KM a key source of competitive market advantages (Matusik

and Hill, 1998; Davis, 1998; Nonaka and Takeuchi, 1995; Nonaka, 1991). Increasingly,

organizational performance and competitive advantages are relying heavily on its human

capital knowledge by designing and implementing programs that effectively use

knowledge both internally and externally (Silvi and Cuganesan, 2006). Thus, it has been

theorized that a firms value can be found more in its tacit, intangibles such as intellectual

and service competencies rather than in its tangible, explicit assets (Quinn, 1992).

The research project investigates how knowledge is currently being collected, distributed,

managed and the perspective of KMs strategic significance to performance within one of

the leading Asian economies: Hong Kong. The objective is to update and extend previous

Hong Kong studies investigating KM within business enterprises (Ritter and Choi, 2000;

Gloet, 2002; Fong and Cao, 2004).

Against this background, this research will identify and explore KM practices using

five themes: 1) Knowledge Activities examines how knowledge is acquired and the

current situation of enterprise learning processes; 2) Knowledge Tools reviews how

information is made accessible, shared and communicated from both an IT and

human resources behavioral perspective; 3) Reasons for Managing Knowledge will

provide an enhanced understanding of the rationale for encouraging and using KM

practices; 4) Knowledge Responsibility presents who is responsible for managing and

supporting knowledge programs and activities and; 5) Knowledge Results reveal the

respondents perspective of KMs strategic significance and its observed influence on

the organization.


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2.0 Report Composition

This report consists of Section 3 which discusses knowledge and KM to develop a

basic understanding of these principles relative to their scope while building a fluency

in terminologies related to the field of KM. The review cannot possibly evaluate the

hundreds of KM researchers and writers, but attempts to present the ideas, concepts

and theories of both the early pioneers and continuing leaders in the field of KM.While the literature acknowledges the value and significance of knowledge and KM, a

variety of definitions and perspectives exist. Section 4 outlines the four research

questions and hypotheses created to examine KM practices in Hong Kong

organizations. The research method and design employed to address the research

questions are presented in Section 5. Next, Section 6 introduces an analysis of the

survey data with findings compared to previous research studies. Finally, the

implications of the research findings, research limitations and recommendations

conclude the report.

3.0 Differing Views on Knowledge

Developing and sustaining a competitive advantage is a continuous journey for most

companies, but regarded essential to long term organizational success. Although

there is little agreement on the definition of knowledge, most practitioners and

researchers agree that sharing knowledge (Lin and Lee, 2004; Davenport and

Prusak, 1997) can exploit core competencies (Drucker, 1995; Beckett et al., 2000)

and establish unique market advantages.

While knowledge has been considered critical to long term organizational success,

the term has a variety of definitions creating confusion among practitioners,

academics and theorists. For example, it has been defined as: acting and making

decisions (Kanter, 1999), contextual information and ability to apply it (Davenport and

Prusak, 1997), professional know-how (Bourdreau and Couillard, 1999) information

used for action, personal convictions that inspire individuals to take effective actions

(Alavi and Leidner, 1999) reliable information that can be trusted, information made

useable (Mahlitta, 1996), and valuable information contributing to organizational

value.

To further complicate matters some researchers describe knowledge as something

relocated from one point to another such as transfers (Davenport and Prusak, 1998)

or re-used (Ruggles, 1997) and distributed (Probst et al., 2000) which could imply

that knowledge is people movement. Skyrme (1999) assumes a more pragmatic

perspective by avoiding this connotation and focuses on the term sharing to describe


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how organizations distribute and leverage knowledge for organizational advantages.

However, knowledge is generally distinguished by two forms: tacit and explicit

(Polanyi, 1966).

Tacit Knowledge

Tacit knowledge has a variety of definitions: practical expertise, hard to explain(Teece, 1998), intangible information residing within individuals demonstrated by

actions and includes personal beliefs, perspectives, and values, conveyed only

by watching and doing, innately understood and used (Zack, 1999b), embedded

in specific actions, skills and activities (Nonaka, 1994). Consequently,

separating, warehousing and distributing the entire knowledge within a human

cannot be done (Davenport and Donald, 1999).

Explicit Knowledge

Explicit knowledge is based on broad research and is considered more tangible

but based in tacit knowledge that has been codified, distributed and evidenced

by verbal statements, mathematics, specifications and operational manuals

which can be characterized as data, contained in language or coding

knowledge previously warehoused, clearly articulated (Zack, 1999b), clarified,

coded and distributed using symbols or common language (Alavi and Leidner,

2001).

The two knowledge forms are interlinked and holistically represent organizational

resources and assets as tacit knowledge is the basis for identifying, acquiring,

interpreting and distributing explicit knowledge (Fahey and Prusak, 1998). The tacit

explicit split has received criticism from researchers that question its usefulness and

currently considered a marginal and emerging concept (Alvesson, 2004). For

instance, Alavi and Leidner (2001, p. 112) maintain that explicit and tacit knowledge

are mutually dependent and reinforcing qualities of knowledge. Due to their

inextricable relationship a definite overlap exists only serving to enhance sharing and

dissemination with technology providing a foundation. Recognizing this relationship,

organizations should endeavor to thoroughly understand knowledge distinctions and

flows to help formulate an effective intranet from which to access valuable knowledge

assets (Alavi and Leidner, 2001).


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3.1 Concept of KM

Knowledge management has deep roots as the concept of knowledge and workers

was first introduced by Peter Drucker. However, it was Karl Wiig who pioneered the

term knowledge management in 1986 during a United Nations speech and

introduced an in depth study of KM to the world that emphasized its importance and

linkage organizational performance (Wiig, 1993; Wiig, 1994; Wiig, 1995). Shortlythereafter, Karl-Erik Sveiby presented a revolutionary way to measure knowledge and

its organizational value with the invisible balance sheet and economists began using

the term intellectual capital to describe intangible assets contributing to overall

organizational value. In 1991, Nonaka and Takeuchi presented how Japanese firms

developed knowledge with innovation. Karl Wiig continued his research by examining

the basis for knowledge management; how individuals and companies produce,

symbolize and employ knowledge; and particular methods and pragmatic approaches

to the management of knowledge (Holsapple, 2003).

3.2 General Perceptions of KM

The literature has supported a general consensus among theorists, researchers and

business practitioners that KM is strategically important and crucial to organizational

success. However, the cultures and enterprises that have actually accepted that a

causal relationship exists between KM systems, competitive advantages and

contributes to performance remain limited (Davenport, 1999; Gloet, 2002; KMPG,

2003; Nonaka and Takeuchi, 1995; Ritter and Choi, 2000; Wiig, 1997). Although KM

is believed to be essential to organizational success, the literature argues that market

advantages go to organizations that actually leverage knowledge with formal KM

processes rather than to those with the most or best data and knowledge (Pfeffer and

Sutton, 2000).

A 1997 study of KM (Delphi Consulting Group) categorized knowledge management

approaches into two perspectives logistical and strategic. The logical approach sees

KM as effective at organizing valuable information, IT based and improves

organizational performance (Fiddis, 1998), while the strategic thinkers see KM as a

powerful tool for organizational change and sharing tacit knowledge (Fiddis, 1998)

that establishes competitive market advantages.

Another 2004 (Fong and Cao) empirical study of Hong Kong and UK firms findings

revealed that 25% fell into the strategic camp while 50% adopted a logistical

approach. Others (9.8%) felt KM was simply previous technologies revamped and two

respondents believed KM was a fad. Remaining responses centered on having no


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insight into KM or its value. The overall results indicated that respondents viewed KM

as beneficial but most were ignorant as to its meaning and some even fearful of its

implementation.

3.3 Fundamental Elements of KMThe existing KM literature identifies the essential ingredients of KM as people,

processes and IT (KMWG, 2001; Moffett et al., 2003; Handzic and Zhou, 2005;

Dueck, 2001).

People are a foundation element as they are responsible for actually creating, sharing

and applying knowledge within the organization. The processes associated with KM

serve to obtain, create, organize and distribute knowledge. And the IT or technology

segment warehouses and makes the knowledge available to users. Each element

discussed below is dependent upon the other for effectiveness (Fong and Cao, 2004).

People: are responsible for selecting others to share with, deciding the topic,

choosing the method, and finally utilizing the knowledge. So the ultimate

success of any KM program rests on the individuals acceptance and willingness

to share with others. Sharing knowledge can create a positive environment of

reciprocity where the giver can anticipate receiving equal knowledge in the

future, gain respect as an expert and personal fulfillment and satisfaction

(Davenport and Prusak, 1998).

However, obstacles to sharing may include a fear of collaborating with the

wrong people and simply being used without recognition or reward (Empson,

2000). Other reasons for a reluctance to share may include not sure with whom

to collaborate or how to convey the knowledge and national culture values may

be a deterrent (KMWG, 2001). The foundation for establishing a knowledge

sharing culture is trust at both the personal and organizational levels coupled

with an environment that encourages and compensates sharing while rejecting

and even punishing non participants (Empson, 2000).

Processes: uncovering, obtaining, interpreting, organizing and sharing

knowledge with the right parties, then motivating people to utilize it is a

continuous journey (Fong and Cao, 2004). Nonaka and Takeuchi (1995) feel

knowledge and its management is dynamic and a constant process of

accumulation and exploitation of undiscovered knowledge. To illustrate the


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be converted into another. Rather they complement one another. They contend

that groups and individuals can possess both tacit and explicit knowledge

resulting in four knowledge classes (see Figure 2.0).

Figure 2.0 Cook and Brown Model (adapted from Cook and Brown, 1999)

The following presents an overview of the Cook and Browns framework of

concepts, stories, skills and genres:

Concepts:knowledge individuals acquire and articulate explicitly and the

simplest to codify into technology systems.

Stories:fall under the personalization strategy (CoPs) and used to convey

the failure or success achieved. Persuasion is achieved by expressing

events in ways that represent the particular cultural behaviors and have

meaning.

Skills:tacit knowledge of individual expertise.

Genres:refers to know-how embedded within the organizational structure

using certain words, language, methods of communications. This element

establishes repetitive actions to address reoccurring situations or events

and is a shared view (Yates and Orlikowshi, 2002).

Basically, Cook and Brown argued that not every action taken by collectives can

be meaningfully and usefully reduced to the actions of individuals in them.

Whereas a literary genre provides a frame for understanding and interpreting

what we read, Cook and Brown propose that an organizational genre extends
http://jcmc.indiana.edu/vol10/issue4/gasson.01.gif


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this idea to include various physical and cultural artifacts, expressed as different

types of things (such as product design) and different types of activities. Cook

and Brown emphasize that the key point is not knowledge but knowing -

suggesting a need to think about managing active processes rather than about

captured, codified and easily transferable assets.

Technology: Although technology has little connection to knowledge, its data

warehousing and communication enable individuals, irrespective of their

geographical location, to quickly and easily share knowledge using

communication methods such as email, groupware, internet, videoconferencing

and intranets. Technology enables firms to distribute knowledge quickly and

smoothly throughout the organization (Alavi and Leidner, 1999). Today,

organizations view technology as the basic challenge to effectively designing

and implementing a successful KMS within the company (Monitor, 1998) and

launched KM projects focusing on IT to acquire, warehouse, access and share

explicit knowledge (Zack, 1999a). In addition to the previous methods to

communicate using technology other applications include expert systems,

neural nets, fuzzy logic and generic algorithms to acquire and codify data

(Laudon and Laudon, 1998).

Although technology is a great facilitator for managing and sharing knowledge,

studies show individuals are not automatically willing to share due to a variety of

reasons creating barriers to implementation and a successful KMS (Mentzas,

1999).

Early adopters of KM principles took primarily an IT approach viewing KM with a

short-term, quick fix information perspective rather than recognizing its long

term competitive value (Hislop, 2005). Even today many companies still

emphasize IT as opposed to a balanced approach when designing and

implementing a KMS. One of the findings in the Gloet (2002) comparison of

Hong Kong and Australian organizations supports the contention that

companies generally adopt either an IT or people KM strategy. For instance, the

findings showed that both Hong Kong and Australian firms practicing KM

predominately adopted an IT strategy, followed by the people aspect and thirdly,

a shared structure. Even organizations polled that were not actively engaged in

KM still indicated that if they implemented a program IT would be their primary

focus. Given the high context Hong Kong culture (Berrell and Gloet, 1999), it

could be argued that these cultural types are prone to adopt a more explicit,


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structured and controlled, IT approach to organizational communications (Berrell

and Gloet, 1999; Adler, 1997; Hall, 1976) as opposed to the high context

Western cultures (Gloet, 2002).

However, the 2006 Asian MAKE Study by the Global Most Admired Knowledge

Enterprises revealed that many Asian organizations relied more on people-based strategies to implement KMS as opposed to the majority of US firms that

focus primarily on IT to acquire, interpret and distribute knowledge throughout

the organization.

Other KM studies suggest that even companies without a clear people, process

and IT structure, such as Black and Decker, still recognize the importance of

establishing an effective KM internal culture that involves both the human and

process elements (Pemberton, et al., 2002).

While some research findings indicate organizations emphasize the human

aspect over IT, overall, the literature suggests that establishing a balance

among people, processes and IT is crucial to the successful facilitation of

organizational knowledge flows. Most experts agree that knowledge is inherent

in people (Fahey and Prusak, 1998; McDermott, 1999a; Coakes, et al., 2002)

and that IT should assume a supplementary role (Alavi and Leidner, 2001) with

primary KM initiatives concentrated on nurturing the human element (Robertson

and Hammersley, 2000). To leverage the human element organizations should

consider developing suitable processes (Hammer, et al., 2004) that support,

encourage knowledge sharing while bridging the IT and human capital gap.

Nevertheless, an over emphasis on processes could actually inhibit informal

sharing and communications among people which drives organizational

performance, so a balance is essential (Brown and Duguid, 2000).

4.0 Research Questions and Hypotheses

The literature review resulted in the formulation of four questions designed to

investigate KM practices within Hong Kong business organizations:

RQ1: What current practices and processes are used to acquire knowledge,

information and know-how?

RQ2: How is knowledge shared and what are the reasons to resist sharing?

RQ3: What are the strategies used to manage knowledge within the firm?


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RQ4: Has using KM practices been of strategic importance to the organization?

4.1 Hypotheses

The research questions were examined using both exploratory and empirical testing

methodologies by means of the following hypotheses:

H1: There are no formal policies and systems to promote acquiring, sharing and

distribution of knowledge.

This hypothesis will attempt to determine the extent respondent companies have

instituted formal KM practices, non-formal management encouragement and an

absence of KM policies.

H2a: The current KM policies and practices in the Hong Kong companies have no

encouraged the usage of systems to share knowledge.

The focus of this hypothesis is on first clarifying where information and knowledge is

derived, then examining the systems utilized to share knowledge and finally,

reviewing the KM tools and techniques are explored to assess respondents

preferences and activity level.

H2b: No association exists between incentives and reducing resistance to sharing.

This hypothesis is designed to explore the reasons to resist sharing with aconcentration on analyzing whether offering incentives has reduced resistance.

H3: There is no preference to a specific department or individual to manage

organizational knowledge.

The concentration of this hypothesis is to investigate the strategic approaches and

methods Hong Kong business organizations use to manage its internal knowledge

resources.

H4: There is a significant relationship between KM practices and strategic benefits to

the company.

The probability of producing a clearly defined result is highly improbable. Although

practitioners and researchers argue that KM is directly related to organizational

performance and is strategically significant, unfortunately, no empirically proven

framework exists to substantiate a causal relationship between KM practices,

competitive advantages and financial performance (Hoffman et al., 2005; Davenport,

1999). Due to the absence of an accepted model, this approach is designed to


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measure the respondents perception or belief as to whether managing knowledge

has been strategically significant to firm performance. To accomplish this goal,

specific questions were asked to obtain each respondents opinion.

5.0 Research Methodology and Design

The positivist approach and quantitative methodology is utilized to address theresearch questions and hypotheses. To collect sufficient data, an online survey and

self-administered questionnaire were modeled from previous KM studies to ensure

effectiveness. Because previous KM studies have narrowly focused on only best

practice organizations, high management levels, single industries, specific functional

areas and single national cultures (Ritter and Choi, 2000; Davenport, 1999; Gloet,

2000; Gloet, 2002; Fong and Cao, 2004; Choi et al., 2004; Cheung et al., 2007; Yao

et al., 2007), this study assumes a holistic approach by spanning all staff levels, non-

gender specific, across various industry sectors and functional areas within a variety

of multi-culturally staffed Hong Kong enterprises comprised of: publicly-traded and

private firms, small and medium enterprises (SMEs), local conglomerates and foreign

national enterprises (MNCs). Respondents were sourced from Hong Kong education

agents and downloaded from public domain databases.

5.1 Population Sample

Because previous KM studies narrowly focused on only best practice organizations,

high management levels, single industries, specific functional areas and single

national cultures (Ritter and Choi, 2000; Davenport, 1999; Gloet, 2002), this study

assumes a holistic approach with a goal to provide more reliable findings by avoiding

specific factors particular to an industry, gender, company size, staff level, functional

area, organizational / national culture, and government and private enterprise. The

surveys span all staff levels, is non-gender specific, across various industry sectors

and functional areas within a variety of multi-culturally staffed Hong Kong enterprises

comprised of: publicly-traded, private firms and government agencies, small and

medium enterprises (SMEs), local conglomerates and foreign national enterprises

(MNCs).

A total of 2644 questionnaires and invitations were distributed that elicited a response

rate of 10.7%. Previous research has demonstrated that a 100-400 person sample

provides sufficient data for analysis and is statistically appropriate (Jennings et al.,

2003). In terms of anticipated response, Ernst & Young performed a KM study with

North America and European companies receiving a 4.4% response (Springer, 2007).

Given this benchmark KM study, the response rate is acceptable as it exceeds the


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benchmark rate established by this previous notable study within the KM realm.

6.0 Data Analysis and Discussion

A descriptive analysis revealed that respondents were relatively evenly distributed

across organizational size ranging from < 50 to >5000 employees. Collectively, four

industries represent the majority of respondents: Financial Services (19.4%),Manufacturing (17.9%), Business Services (12.2%) and the Retail Trade sector

(9.1%). These results are not surprising as they serve to support the fact that Hong

Kong is a world-class financial and international trade center and is consistent with

the Hong Kong business environment. The response basis was predominately

organization-wide as opposed to a department or unit. The majority of respondents

(48.7%) characterized the KM perspective considering all organizational factors and

systems, not individual, branches, departments or units. Additionally, respondents

represented all levels of the organizational hierarchy from front line staff to executive

management. Generally, the data can be considered holistic as it covered a relatively

broad cross-section in terms of organizational sizes, industries, basis of responses

and hierarchy levels.

6.1 KM Awareness and Practices

Research question one and accompanying hypothesis concern the formal policies

and systems that encourage the acquiring, sharing and the distribution of knowledge.

The results showed the majority of respondents (42.6%) stated a formal KM practices

policy existed, while a reduced number (28.2%) did not and even less (20.1%) did not

know. In addition, the results also implied that organizational size could influence

whether a firm actually implements a formal KM practices policy however, the data

was not convincing that KM practices were industry specific. The analysis of

organizations without a formal KM practices policy, but encouraged and promoted

knowledge sharing, implied no relationship to company size or industry type.

In summary, these results suggest that Hong Kong companies across a broad

industry, management level, and size possess a formal KM practices policy and or

encourage knowledge sharing within the firm. However, these findings are contrary to

previous Hong Kong KM studies: Ritter and Choi (2000) where the majority of

respondents reported formal strategies and policies were non-existent; Gloet (2002)

found that most respondents (45%) were unsure if KM was actually practiced and; the

Fong and Cao (2004) study revealing only a small percentage (27.8%) had an

existing KM strategy.


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6.2 Knowledge Sources, Systems Used and Sharing Obstacles

The second research question and hypotheses pertain to sources of knowledge,

systems used, sharing barriers and incentives designed to encourage sharing.

Knowledge Sources

The respondents knowledge sources were examined as companies must first identifyand assess the organizations current activities and knowledge assets. This

assessment is critical to structuring an effective knowledge management program.

The findings suggest that people are highly dependent on the personal network of

contacts and interactions to acquire useful information and knowledge. These results

support the Fong and Cao (2004) Hong Kong study which identified the most frequent

and useful sources of knowledge sharing as: personal experience, internal sharing by

colleagues and communications with external sources. The Yao et al. (2007) Hong

Kong government research also produced comparable results indicating the most

common knowledge staff sharing activities were face-to-face and informal personal

networks.

KM Systems and Processes

The systems and processes used for accessing and sharing knowledge were

reviewed using two variables. The results indicate that companies with a formal KM

policy predominately used the Intranet, Video Conferencing, Data Warehousing and a

CRM system, while the internal Yellow Pages, Groupware and Storytelling, and

Decision Support tools showed a weaker usage and popularity. Further, the Internet,

Email and Informal Group meetings did not show any significance as KM tools.

Of the companies that only encourage knowledge sharing, the results confirm the

company internal Intranet system is the primary KM tool while Video Conferencing,

Data Warehousing, Decision Support tools and CRM systems showed weak usage.

Additionally, the remaining tools failed to demonstrate any notable usage or

significance.

Overall, these findings confirm and are consistent with a previous Hong Kong KM

study (Gloet, 2002) showing technology as the preferred method to disseminate

knowledge. Conversely, the Yao et al. (2007) study showed respondents used

personal approaches to share information. By comparison, Australian studies by

Gloet (2002) and Fong and Cao (2004) reported the most prevalent activities were

tacit experiences involving informal personal networks and face-to-face encounters to

share knowledge. Further studies in other geographical areas of the world such as


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India, Australia, UK and a broad cross-section of Western executives showed

respondents preferring to disseminate knowledge using technology over the

personalized approaches (Alavi and Leidner, 1999; Singh et al., 2006; Xu, 2005).

Sharing Obstacles and Barriers

A clearer understanding of the potential barriers to a knowledge sharing culture helpscompanies devise effective strategies to address them and create a successful KMS

to potentially improve performance.

The knowledge sharing barrier results were examined to determine the reasons to

resist sharing. Of the survey options, results showed the key reasons to resist sharing

are: people are unwilling to share, fear of losing power advantages and appearance

of being dependent on others to perform their job. In some national cultures with high

power distance dimensions (Hofstede and Hofstede, 2005) withholding knowledge

creates individual advantages and therefore could be a barrier to knowledge sharing,

how knowledge flows, accessibility and become an obstacle to certain strategies

(Ford and Chan, 2003). The Hong Kong is considered a high power distance Asian

culture which could preclude participation in knowledge sharing activities (Hofstede

and Hofstede, 2005)

In terms of an unwillingness to share, these findings also support previous research

(Ritter and Choi, 2000; Chee, 2003) citing the most frequent sharing obstacles in

Hong Kong companies were lack of motivation, passive attitude, not open to speaking

candidly and not critical of others. However, other Hong Kong studies (Fong and Cao,

2004; Gloet, 2002) revealed the most prominent obstacle was a lack of time.

The fear of losing power surfaced in this study as a primary respondent concern. This

result is in line with the Yao et al. (2007) Hong Kong project findings that the majority

(79%) of respondents perceived knowledge as power and unwilling to share.

Additionally, a large number (50%) of respondents agreed that the fear of loss and

absence of benefits were constraints to sharing. This result is not surprising given

that Hong Kong is a high power distance culture (Hofstede and Hofstede, 2005)

therefore withholding knowledge is a common characteristic to create individual

advantages. By comparison, the Indian study (Singh et al., 2006) also showed similar

concerns with the top obstacle being fear of losing power and jeopardizing job

security.


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Incentives and Knowledge Sharing

The data for knowledge sharing incentives were analysed to determine whether

offering incentives could effectively encourage knowledge sharing. The key incentives

were: monetary, promotion, official recognition by management and peer

appreciation. The literature review showed that respondents to other KM studies felt

that either incentives to share were non-existent or unclear (Fong and Cao, 2004) orsimply not encouraged.

Testing was conducted on the KM incentives and resistance to sharing to determine if

a correlation exists between the offering incentives and resistance to sharing. The

results clearly show that incentives do not encourage knowledge sharing within

organizations surveyed. Once again this finding aligns with the Hong Kong high

power distance culture (Hofstede and Hofstede, 2005) meaning that respondents will

abstain from sharing information and knowledge rather than risk losing their individual

power advantages. Therefore, this factor could become an obstacle thereby

superseding or nullifying any incentives offered (Ford and Chan, 2003).

6.3 Strategies Used to Manage Knowledge

Research question three concentrates on the investigation of how Hong Kong

companies currently manage knowledge.

The KM literature indicates the management of knowledge depends on

managements perception of this resource. For example, a department such as HR or

IT is typically assigned to oversee identifying, storing and making information

accessible to staff. Sometimes the responsibility can be shifted to department

Supervisors or Managers or even placed at the Senior or Executive level to manage.

However, companies that understand the strategic significance of managing

knowledge will generally create a position called the Chief Knowledge Officer (CKO)

who is responsible for overseeing KM programs to ensure that knowledge is

effectively managed and distributed companywide (Leitch and Rosen, 2003).

Recognizing that how knowledge is managed can vary from firm to firm, a null

hypothesis was created to test the companys preferred choice: no preference to a

specific department or individual to manage organizational knowledge. Extensive

testing returned noteworthy results. According to the test findings, it appears

respondent companies view KM as strategically important to organizational

performance. To ensure that knowledge is responsibility and effectively managed a

significant percentage of respondent companies have a dedicated individual or


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department responsible for managing this valuable resource.

Also, the results seem to indicate that respondent firms do not favor a particular

department or individual to manage KM processes. The findings are relatively equal

with a CKO or dedicated KM department (77.2%) followed in rank order by the IT

department (74.1%), with Middle Management and Executive Management showingsame result (70.8%), and the HR department received the lowest proportion results

(62.2%). These closely paralleled results seem to indicate that respondent firms

make a selection based on a particular knowledge focus or some factor exclusive to

the organization rather than by individual or department.

These results tend to disagree with previous Hong Kong studies of firms with

identified KM practices. In one study IT was the most popular way to manage

knowledge with HR ranked second and some respondents feeling it was shared by

both (Gloet, 2002). The second study showed that all companies with a confirmed KM

system did not have a specific individual or group dedicated to ongoing management

(Fong and Cao, 2004).

6.4 KMs Strategic Importance

The goal of research question four is to measure if managing knowledge has

created value and tangible organizational benefits. Trying to accurately measure the

value of knowledge assets and substantiate the strategic importance of KM

practices has been a continual challenge for researchers (Ruggles, 1998). Although

practitioners and researchers agree that KM improves organizational performance

and is strategically significant, no empirically proven framework or study has

substantiated a causal relationship between KM practices and organizational

performance (Hoffman et al., 2005; Davenport, 1999). A variety of research studies

and surveys have produced a broad range of non-quantifiable results (Davenport,

1999; Wiig, 1999; Singh et al., 2006; Fong and Cao, 2004) but essentially it seems

to be managements perception of KMs value to performance without hard

supporting quantitative evidence (Ruggles, 1998; Ritter and Choi, 2000).

Due to the absence of an accepted model that can conclusively measure the casual

relationship between KM practices and firm performance --- this research study

employed a similar approach used by Fong and Cao (2004) in an effort to determine

the respondents perception or belief as to whether managing knowledge actually

produces benefits and contributes to organizational performance.


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These study findings illustrate that respondents are relatively divided whether

having A formal written KM practices policy have resulted in strategic benefits to

the organization. Testing failed to show any significant correlation between this

variable and any strategic benefits leading to improved organizational performance.

Testing of the sister variable An internal knowledge culture or system that promotesthe acquiring, sharing and distribution of knowledge manifested similar results.

However, respondents felt that this variable did result in establishing a sustainable

competitive advantage due to development of differentiation and unique

competencies not easily imitated by competitors.

Based on these two findings, it could be assumed that companies with a formal KM

policy neglect to provide the necessary support to encourage staff participation.

Conversely, companies with an embedded KM internal culture and proactively

managed systems seem to more effectively encourage staff to participate in

knowledge sharing activities thereby translating into strategically significance

returns.

To further examine this concluding assumption, the two variable outcomes were

comparatively tested. The results suggested that organizations could conceivably

achieve desired strategic benefits not by creating explicit written organizational

policies, documentation and rules, but by establishing an internal culture that

encourages and drives KM initiatives with the full support of all stakeholders who

endorse and voluntarily and proactively participate in knowledge sharing activities.

Comparatively, the Fong and Cao (2004) report showed the respondents believed

that their KM practices had positively impacted: efficiencies, customer relationships,

sharing of knowledge, but sensed it did not reduce costs, promote innovations nor

increase market share. Upon comparing KM objectives with results, a constructive

relationship existed between effectiveness and significance. The top reason to

implement a KMS was improving customer relationships and KM provided successful

results. However, increasing market share was ranked second and contrary to

expectations KM did not deliver, at least not during the study period. Respondents to

the Indian survey (Singh et al., 2006) provided broader results with participants

indicating that KM provided a multitude of positive benefits to the company.

7.0 Research Findings Implications

The project results add to existing KM research benefiting both the business and


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academic communities. The research identified differences and gaps in current Hong

Kong KM practices; recognized key areas of improvement; further stimulated the use

of KM; provided a better understanding of the internal mechanisms necessary to

leverage internal resources to develop and implement a KM culture. Findings show

local Hong Kong business organizations the potential of knowledge in enhancing their

competitive advantages, reduces ambiguity concerning KM benefits and highlights itsimportance to organizational performance.

The research contributes to both academic researchers and business practitioners in

three ways. Firstly, it provides a better understanding of KM issues within Hong Kong

organizations, the current status of KMs implementation and readiness to accept and

adopt best KM practices. Secondly, the findings also offer business practitioners with

a better understanding of the internal mechanisms necessary to leverage a firms

specific resources in the formulation and implementation of an effective KM system.

Finally, while much literature exists concerning KM and its causal link to company

performance, few organizations have established a relationship (Davenport, 1999).

While there is no argument against the value of managing knowledge, ascertaining

the degree to which it contributes to performance has not been substantiated (Collis

and Montgomery, 1995; Grant and Gregory, 1997). The results of question four shed

additional clarity on the fuzziness surrounding KMs correlation to being strategically

significant to the firm.

8.0 Research Limitations

The findings of this research project has provided interesting insights into existing KM

awareness, approaches and practices within Hong Kong business organizations as

opposed to definitive results. While the research findings and propositions of the

study provide updated KM perspectives, it should be viewed with vigilance as to

potential limitations. For example, some of the questions may be answered

subjectively as to respondents interpretation of the situation thereby resulting in

skewed results. The sample used to extract the data could be more extensive to

produce more accurate results. Additionally, the findings are relative to any limitations

related to timing, the questionnaire structure, respondent comprehension of

questions, delivery method and not possible to identify, nor control factors that might

skew the results.

Overall, it is anticipated the study results will support previous research while

contributing to current theories, its linkage to organizational performance and

encourage further business practitioner and academic research studies.


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9.0 Conclusions

These research findings and the empirical KM studies evaluated by the authors 20

years of business consulting experience working in Europe, Australia, North America

and Asia with a variety of global organizations, seem to suggest that how knowledge

is managed, practices used, sharing barriers, incentive programs and KMs strategicsignificance to organizational performance will differentiate from firm to firm.

Even with massive investments in IT, a fuzziness still exists as to exactly what works

and why (Liebeskind, 1996). However, the differences may be predicated on a

variety of factors rather than just one. As demonstrated by the antecedent and

extant literature review and this research findings, the variables of organizational and

managerial and national culture, internal politics, ambiguity, time, the type of industry,

as well as the specific product / service individually or in combination may all serve to

influence and ultimately determine how different organizations perceive the value of

knowledge, how its acquired, methods to share and obstacles to sharing, and

strategic significance to the organization. Therefore, it is suggested that management

first conduct an in depth internal assessment to intimately understand the

organizations idiosyncrasies. Next, to minimize the risk of a failure, companies should

design a systematic approach to developing a knowledge management program by

first performing a knowledge audit to identify, qualify, measure and assess both

explicit and tacit knowledge inventories (Guptara, 2000; Hylton, 2002). Then equipped

with this foundation information, the company can design and implement a KM

system that does more than just collect knowledge, but also effectively disseminates it

throughout the organization using a variety of techniques corroborated by various

current research studies outlined in this paper (Fong and Cao, 2006; Yao et al., 2007;

Xu, 2005; Alavi and Leidner, 1999; Singh et al., 2006; Ritter and Choi, 2000; Chee,

2003).

In terms of KMs effectiveness, it is a common practice for companies to measure

KMs value using financial analyses such as share prices, revenue growth, return on

sales and other financial measures (Sveiby, 1997). However, given that the external

global business environment is highly dynamic and constantly changing, it is

suggested that firms regularly evaluate the correlation between KM actions and

results to improve the outcomes rather than feeling the necessity to declare the

existence of an absolute casual relationship between KM and organizational

performance (Fong and Cao, 2004).


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KMs future is vague, but its potential for greatness is clear. W hile KMs current

impact on the global economy remains a bit obscure and insignificant, there are

enormous possibilities for anyone that recognizes the value of knowledge, then

leverages to enhance organizations, individual competence and enrich the value

created by both.

10.0 Recommendations

The research study is not intended to provide absolute recommendations to

formulate, implement or manage a KM system. However, a few suggestions are

offered based on the research.

First, the primary challenge to a establishing an effective KM program originates with

the employees fuzziness of KM and its potential personal and organizational benefits.

The results showed the majority of respondents stated a formal KM practices policy

existed, while a reduced number did not and even less, did not know. Organizations

can avoid this obstacle by creating a definitive KM program, appoint a KM champion

to manage KM, train all staff levels, challenge processes and programs, then

reconstruct the basic elements of their KM scheme. Rather than fighting against this

obvious KM barrier, companies should view it as organizational learning opportunities

to implement effective change to improve operational performance.

Next, the findings also suggest that people are highly dependent on the personal

network of contacts and interactions to acquire useful information and knowledge as

opposed to IT. Companies should consider encouraging the existence of informal

social networks such as communities of practice (CoPs) and storytelling to enhance

knowledge sharing. These techniques have shown to deliver higher returns

compared to the more structured organizational processes and programs commonly

used by organizations. The informal networking and socializing provides individuals

with an identity, increased confidence and develops a degree of trust among

colleagues facing the similar or the same challenges and also externalizes tacit

knowledge by internal sharing.

Finally, the results clearly indicated that incentives did not encourage knowledge

sharing. Rather than offering non-attractive, meaningless incentives, companies

should invest time and effort in explaining the potential personal and organizational

benefits of sharing tacit knowledge to motivate staff support and involvement then

offer appropriate rewards aligned with staff values.


22/29

In summary, once management recognizes the value and opportunities associated

with effectively managing knowledge, developing effective KM practices and

processes will emerge, which will eventually produce amazing benefits staff,

leadership and the overall organization.

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