Performance Implications and Fit of Knowledge Management Strategy and Strategic Information Technology Management

Introduction

Current research on knowledge management has demonstrated the critical role of information technology (IT) for effective KM (knowledge management) activities (Alavi and Leidner, 2001; Choi and Lee, 2002; Kankanhalli et al., 2003; Nonaka and Konno, 1998, Zack, 1999) or interorganizational learning facilitating (Scott, 2000). Studies found that an organization which was high quality in both KM and IT (a high-high fit) achieved high KM performance and satisfaction more frequently than those whose quality fitted low (Khalifa et al., 2001; Sher and Lee, 2004). That is, KM project itself will not lead to success without the deployment match of IT (Sabherwal and Sabherwal, 2005; Truch and Bridger, 2002). Similarly, IT alone can do nothing without good KM initiatives (Kim, 2001) in attaining KM success (Khalifa and Liu, 2003) or organizational performance (Bhatt and Grover, 2005; Devaraj and Kohli, 2003; Khalifa and Liu, 2003). Accordingly, the fit between KM and IT in managing business activities must be considered for business performance (Asoh, 2004; Zack, 2002). In other words, it is critical and necessary that chooses the right IT for different KM strategies (Kim, 2001), Accordingly, fit between KM and IT in contemporary business activities must be accommodated to achieve KM performance (Asoh, 2004; Zack, 2002).

The issue of fit is one of the top concerns of executives since the 1980s (Luftman et al., 1996; Watson et al., 1997). Doty et al. (1993) indicated that the higher organizational effectiveness is driven by the internal consistency or fit among the patterns of relevant contextual, structural, and strategic factors. Powell (1992) also suggested that the alignment between organizational processes and strategic decisions is contribution to competitive advantage. Although fit between business strategy and IT strategy is a critical issue in organizational research (Earl, 1996; Luftman et al., 1999; Papp, 1998), there are few studies that empirically address the issue of fit in KM field. It is because of the contingency researchers discovered that business performance involved something more complex components than isolated specific strategy factors that a more “holistic” configuration perspective needed to be concerned.

So far, many researchers, consultants and practitioners have developed frameworks that attempt to find out the relationships between IT/IS and business-related strategy (Marchand et al., 2001). However, there exits some issues need to be further addressed and discussed. For example, what are the relationships between KM strategy and IT strategy in developing KM practices? How organizations really deploy their KM strategy in conjunction with IT strategy? What roles do KM strategy and IT strategy play as covariation in enhancing business performance? Currently, little studies use the fit perspective to consider the underlying nature of coalignment between the strategies or capabilities that organizations possessed in examining their effectiveness on performance in details. Since KM strategy can be regarded as a part of business strategy, therefore, a linkage of effective IT management and KM strategy is the key to reduce costs, which in turn, a higher performance achieved (Davenport and Prusak, 1998; Tiwana, 2002).