The Consistency of Virtual Organizations Enabling Capabilities and Improvements in Knowledge Management Performance

The Consistency of Virtual Organizations Enabling Capabilities and Improvements in Knowledge Management Performance

Ali Moeini (Department of Algorithms and Computation, Faculty of Engineering Science, School of Engineering, University of Tehran, Tehran, Iran), Alireza Farmahini Farahani (Department of Information Technology Management, Faculty of Management, University of Tehran, Tehran, Iran) and Ahad Zare Ravasan (School of Management and Accounting, Allemeh Tabataba’i University of Tehran, Iran)
Copyright: © 2013 |Pages: 24
DOI: 10.4018/jeis.2013040102


The success of a virtual organization (VO) largely depends on the effective collaboration of its members in orchestrating their knowledge, skills, core competences and resources. It enables the VOs to enhance competitive capabilities and respond better to business opportunities. Most previous studies have focused on the influence of some contingent factors on Knowledge Management (KM) process/ outcome and neglect the interacting relationships among these contingent factors. The objective of this study is to explore the interacting patterns among a VO enabling capabilities from a covariation perspective on Knowledge Management Performance (KMP). The authors introduce the concept of “consistency” which helps them investigate the impact of the VO enabling capabilities on KMP. The results from a field survey of 95 Iranian IT/ engineering firms which implement KM processes show that the “consistency” among these enabling capabilities has a significant positive impact on KMP. The novel point in this paper is to consider the following factors in a virtual context simultaneously: focus on core competence, network cooperation, integration, trust in the network, and ICT usage. The results of this study have provided a very useful reference for scholars and managers to identify the relevant issues of KM projects in VOs.
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As capital searches for new markets, greater efficiencies and competitive advantage, time, space and the boundaries of a firm become strategic enablers rather than operational hindrances. The mobilization and leveraging of knowledge resources to create ideal solutions require building networks of professions who are motivated, empowered and linked to each other. These experts can be at their home, offices, or in other companies in other countries (Jackson & Klobas, 2005). As a result, in the past few years, the “virtualization” of organizations was a common response to these changes. These new kinds of organizational structures namely virtual organizations (VOs) have different inherent natures comparing to traditional ones which connect geographically dispersed units and groups by using communication networks. These structures tent to be increased in the recent years, primarily due to the need for specialized knowledge and expertise, globalization, and employee preferences (Boutellier et al., 1998; Pollalis & Dimitriou, 2008). The key to such organizations is their responsiveness, flexibility, ability to configure knowledge and capital assets based upon emergent market needs, and their transience (Jackson & Klobas, 2005). Knowledge-based assets are now widely considered as one of the most valuable resources of any organization and appear to be necessities for organizational effectiveness in the new century. Performance and profitability differences among organizations can largely be attributed to asymmetries in applying knowledge-based assets to amplify organizations’ existing advantages. Several scholars emphasize on the role of KM on the organizations performance (Choi & Lee, 2003; Kalling, 2003; López-Nicolás & Meroño-Cerdán; Sohrabi et al., 2010; Vaccaro et al., 2010; Yang, 2010; Yim et al., 2004; Yu et al., 2007) and it is demonstrated that knowledge management performance (KMP) has meaningful effects on corporate performance that directly links to company profit (Wu, 2007) which implies the high importance of KM activities in organizations.

It is believed that moving more towards virtual structures, generally correspond to worse KMP as a probable results of the tyranny of distance, non face-to-face communication, communication dynamics, willingness of a member to share knowledge with other members, project management, and cultural issue (Alavi & Tiwana, 2002; Chiu et al., 2006; Kayworth & Leidner, 2000; Kayworth & Leidner, 2002; Savaneviciene & Duoba, 2004) which means that greater virtuality might be a challenge to KMP. Now this question arises that how an organization move to the virtual structures without facing crucial challenges in its KMP or which enabling capabilities a VO should has to boost its KMP, which also illustrates the importance of KM studies in virtual environments. Generally, regarding our analysis, there is dearth of studies which investigate the influence of different contingent factors on the KMP. One of the most related research works is done by Ho (2009) in which he has studied the influence of strategy and leadership, organizational culture, organizational incentive system and information technology as KM enablers on KMP. Chin et al. (2010) have explored the influence of eight KM enabling factors including K-user orientation, KM leadership, customer and knowledge supplier relationships, KM strategy planning, knowledge-centric and continuous learning culture, KM system infrastructure, KM personnel focus, and finally knowledge process management on KMP. Another study, investigated how the prevalent identifiers of a firm’s organizational structure including formalization, complexity, and centralization have any significant effect on knowledge performance (Pertusa-Ortega et al., 2010). Chen and Huang examined the influence of innovative and cooperative climate, social interaction, and organizational structure on KM (Chen & Huang, 2007).

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