Knowledge Management and the Roles it Plays in Achieving Superior Performance

Knowledge Management and the Roles it Plays in Achieving Superior Performance

Marjorie Delbaere (University of Saskatchewan, Canada), David Di Zhang (University of Saskatchewan, Canada), Edward R. Bruning (University of Manitoba, Canada) and Subramanian Sivaramakrishnan (University of Manitoba, Canada)
DOI: 10.4018/978-1-5225-1913-3.ch070
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Abstract

Knowledge is one of the most critical organizational resources, and Knowledge Management (KM) has been identified as one of the key aspects in organizational strategic management. In addition to creating functional value by protecting and utilizing organizational knowledge, strategic knowledge management also serves as a central nerve system within the organization that facilitates organizational learning, organizes the market intelligence about customers and competitors, maximizes the value of organizational knowledge, and contributes towards superior organizational performances. The objectives of this chapter are to develop a theoretical model that delineates the relationship among several organizational variables that are of strategic importance to performance, including Market Orientation (MO), Learning Orientation (LO), and KM. A national survey was conducted to collect information from managers of Canadian manufacturing companies. A total of 307 informants returned the survey. Data was analyzed using Structure Equation Modeling (SEM). The results demonstrate that a firm's KM mediates the positive influences from the firm's LO and MO on market performance.
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Background

Resources, Capabilities and Performance

The resource-based-view (RBV) of the firm posits that each organization is endowed with unique and finite resources; this resource endowment provides the firm opportunities to gain competitive advantages (Barney, 1991; Hunt & Morgan, 1995; Penrose, 1959; Peteraf, 1993). Managerial actions, strategies, and capabilities enable the firm to fully realize such potential competitive advantage and achieve superior performance (Ketchen, Hult & Slater, 2007). It is generally accepted that the firm’s ability to create and manage market-based knowledge is a potential source of competitive advantage (Nonaka, 1994; Nonaka & Toyama, 2005). When MO, LO and KM are combined, they create a unique organizational dynamic capability that encompasses not only a propensity to learn and a market-based focus, but also a collection of infrastructures and processes that regulate how market intelligence is collected, distributed, analyzed, and shared as knowledge (Gold, Malhotra & Segars, 2001; Hoe, 2008). Based on the RBV of the firm, Yang (2008) argues that both LO and KM are important resources for superior performance and represent capabilities that affect a firm’s competitive posture.

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