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Knowledge is one of the most valuable resources for organizations owing to the barriers that exist in its transfer and replication by competitors (Alavi & Leidner, 1999a, 2001). Knowledge management (KM) can confer organizations advantages in a competitive market (Kogut & Zander, 1992). Once knowledge is managed and categorized, employees can know how to quickly access the required knowledge, and thus provide improved services. KM is essential for professional service firms seeking competitive advantage. Numerous professional service firms have adopted KM to enhance their services and expertise in competing against other firms in their profession (Alavi & Leidner, 1999b). Competitive advantage can be expected to improve service industry performance (Bharadwaj, Varadarajan, & Fahy, 1993).
Previous investigations have claimed that KM infrastructure can manage and deploy organizational knowledge (Cepeda & Vera, 2007), transform tacit knowledge into explicit knowledge (Davison & Wickramasinghe, 2003; Wickramasinghe, Fadlalla, & Sharma, 2004), and improve organizational effectiveness (Gold, Malhotra, & Segars, 2001; Ghosh & Scott, 2005, 2008). In the healthcare industry, KM infrastructure help hospitals integrate knowledge from knowledge workers and provide better services to satisfy patient needs (Davison & Wickramasinghe, 2003; Ghosh & Scott, 2005, 2008; Wickramasinghe et al., 2004). Therefore, improved understanding of how to develop KM infrastructure is essential for hospitals when seeking market interrelationship performance that refers to service enhancement, sales and marketing support, and customer relations.
KM infrastructure is an important foundation for improving KM activities in hospitals (Davison & Wickramasinghe, 2003; Ghosh & Scott, 2005, 2008; Wickramasinghe et al., 2004) and is used to realize the maximize value of exploiting organizational knowledge, including technological capability of KM infrastructure, structural capability of KM infrastructure, and cultural capability of KM infrastructure (Gold et al., 2001). The value of these capabilities of KM infrastructure has not been widely investigated. This study empirically tests the influence of the technological, structural and cultural capabilities of KM infrastructure, and examines how they can help hospitals compete in terms of market interrelationship performance.
Resource-based view (RBV) can help analyze organizational resources so as to determine organization abilities to achieve relative advantage (Barney, 1991; Wernerfelt, 1984). However, as warned in prior research, using RBV to examine economic analyses of resources or capabilities may result in misleading conclusions, process-level analysis more appropriate (Ray, Barney, & Muhanna, 2004; Ray, Muhanna, & Barney, 2005). Although process-level analysis is appropriate for reflecting a relative performance effect, previous studies have not examined the influence of business processes on specific competitive advantages. Therefore, this study tries to fill this gap and use RBV to examine how technological capability, structural capability and cultural capability of KM infrastructure influences market interrelationships in the healthcare industry, and supplement these with a process-level analysis.