Measuring the Impact of Knowledge Management (KM) on Performance in the Public Sector in India

Measuring the Impact of Knowledge Management (KM) on Performance in the Public Sector in India

Himanshu Joshi (International Management Institute New Delhi, India) and Deepak Chawla (International Management Institute New Delhi, India)
DOI: 10.4018/978-1-5225-9639-4.ch024
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This chapter is aimed at understanding how KM impact organizational performance. The chapter discusses KM perspectives, specially KM in public sector organizations, its dimensions and impact on performance. A review of literature and focus group discussion (FGD) was conducted. The sample was drawn from cross-section of various industries like manufacturing, power, pharmaceutical, etc. Some personal interviews were also conducted. Based on the review of literature, FGD, and personal interviews, an instrument was designed encompassing various statements related to KM as well as performance. Since there are not many public sector enterprises in India which are formally implementing KM, a convenience sampling was used. The study employs a mixed-method approach for data collection and appropriate statistical techniques are used to meet the objectives. The study proposes a conceptual framework for understanding KM dimensions and its impact on performance improvements. At the end of the chapter, recommendations for public sector companies for enhancing organizational performance are discussed.
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Indian Public Sector: Objectives and Concerns

Public sector organizations are those which are owned by government while private sector organizations are owned by individuals. Public sector organizations are those where-in more than 51 percent of equity in a company rests with the central or state governments. India is a mixed economy where both public and private sector has contributed immensely to the growth of the economy.

Post-independence, a number of public sector organizations were formed and the existing ones were recalibrated to push industrialization through adoption of new technology and innovation in various sectors like manufacturing, banking, power generation and distribution, railways etc. However, after opening up of the economy in 1991, private organizations were encouraged to contribute in the growth of the economy by offering products and services in domains earlier controlled by the public sector.

The nine pivotal roles of public sector in Indian economy are income generation, capital formation, generation of employment opportunities, infrastructure development, creation of a strong industrial set-up, promotion of exports, contribution to central exchequer, income redistribution and removal of regional disparities. It was envisioned that creation of such enterprises would result in income redistribution, employment generation, promotion of small scale and ancillary industries and balanced regional development. Private sector, on the other hand, primarily focuses on competitiveness, profits and market share.

The way public sector organizations interact with their environment and stakeholders is different from their counterparts. They are constrained in their choice of procedures as they perform activities that are mandated by political forces. Public sector organizations operate in an environment of control and greater external influence involving multiple approval stages resulting in less autonomy over decision making. In public sector, the driving impetus is public policy whereas, in the case of private sector, it’s the business performance and results (McNabb, 2006).

Some of the major concerns of public sector organizations include use of primitive technology, underutilization of existing resources, bureaucratic structures, poor infrastructure, over staffed operations and expensive financing and bureaucratic decision. Due to the inherent reporting structures, processes, relationship with end users, nature of employees, performance expectations etc., it is common in public sector enterprises to experience delays in decision making, reinvention of the wheel, lack of ideation, knowledge creation and peer learning. According to Denner & Blackman (2013), some of the main challenges to successful knowledge sharing in the public sector include lack of management recognition, few rewards for knowledge sharing behaviours, and inadequate organizational IT infrastructure.

In spite of the challenges, public sector organizations have huge repositories of knowledge to leverage upon. However, there is low awareness among employees on the relevance of KM in business. In many public sector organizations where KM is being implemented, the initiative is not very well structured in terms of its objectives, process transformation and changes, roles and responsibilities, metrics for impact assessment etc. How well public sector organizations manage their knowledge base would determine the success of these organizations in the long run. The need for a structured KM process in public sector organizations forms the rationale for this chapter.

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