Knowledge Management Proponents or Opponents: Empirical Test on Micro Finance in Emerging Market

Knowledge Management Proponents or Opponents: Empirical Test on Micro Finance in Emerging Market

Aries Heru Prasetyo (Fu Jen Catholic University, New Taipei City, Taiwan)
Copyright: © 2017 |Pages: 14
DOI: 10.4018/IJKM.2017040103
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This study tried to explore hidden power of knowledge management in contributing to a better competitive advantage for society-based organization. Using Indonesia micro finance organization, the test deployed four major drivers: technology infrastructure, organizational structure, culture and people. By addressing multiple linear regressions on 184 questionnaires, the study succeeded in uncovering the impact of proper KM-technology, organizational culture and people to the creation of competitive advantage, thus valid proponents for micro finance sector. However, failures to prove the role of the second drivers showed potential obstacle while preserving knowledge. Elements such as leaderships, adaptability, communication and bureaucracy might become the ideal moderator for future agenda.
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The role of knowledge management (KM) on competitive advantage had been proven empirically (Meihami, 2014; Kamya et al., 2010; Danskin et al., 2005; Gold et al., 2001). More researches supported the conclusion in which adequate KM mechanism – consists of productive infrastructure and proper process – might produce an inimitable knowledge as source of sustainable competitive advantage. Unfortunately, most of the study focused on manufactured sector while less attention had been given to microfinance sector (Hana, 2013).

As a branch from social economy, microfinance shares the responsibility to provide services to an unserved community (also known as a rural society). This is the society who is once despised by the commercial sector point of view. But referring to South East Asia’s financial crisis on early 2000, the sector was the only player who is not affected by the turbulence (Birchall & Ketilson, 2009). The spirit of togetherness, loyalty and commitment are the three factors which underlined those performances. These facts had drawn a lot of attention from the commercial financing sector. Today there are lots of new movements from commercial bank to provide the similar service with better professionalism. In Indonesia, more commercial banks are started to reach-out the society through the same platform. For some reasons, it makes difficulties to compete with the new entrants (Humle & Arun, 2009). Up to the point, the needs for managing microfinance organization with higher professionalism had grown tremendously. In facts, our preliminary study had identified a low human quality for the observed sector. As other developing countries, a microfinance sector is a forgotten field of economy. Less attention has been given to develop this sector. Only a few number of young talented-professionals who shares willingness to develop their career in this field. Therefore, a proper managerial process which can guarantee the quality of knowledge-decision based is needed to maintain their existences.

Our study focused on four major elements in KM proposed by Gold et al., (2001) which later was extended by Smith (2010). The tested element consists of technology infrastructure, organizational structure, culture and the role of human. Deploying the original concept of KM unto microfinance organization might provide better insight regarding the dynamic character of knowledge as well as appointing future research agenda.

This paper was organized as follows: next section will describe our theoretical insight in relating KM to microfinance competitive advantage. Section three explained the methodological part of our research. Section four will provide analysis and discussion while section five will stated our conclusion and future agenda.

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