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Research Proposal - The Effects Of Knowledge Management To The Success Of An Organization

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Knowledge is a necessity; it is the increasingly scarce commodity that corporations cannot do without. Persistence therefore lies not in the amount of financial capital or the present assets of the company but in the stored value that is built up on human capital.

Knowledge remains to be the primary asset of companies- a leading indicator is the extent to which they invest on human capital development. Contemporary corporate management specifically, the financial sector had been increasingly aware of the future benefits of organizing ideas to in order to have a competitive advantage over others.

Effective knowledge management is a core competence that will present companies with a key advantage over their peers in the dynamic global economy of the 21st century. As companies emerge from re-structuring, downsizing and business process re-engineering programmes, many are realizing that they have neglected knowledge built-up over decades. At the same time they are becoming aware of the opportunities and threats presented by e-business, and are recognizing the need to share the new knowledge and skills of the digital economy. This is particularly relevant to the financial sector of United Kingdom; the evolution of ideas and innovativeness have been rapidly changing that financial institutions have to cultivate ideas that can meet the demands of the market.  To meet these challenges and achieve a competitive edge, they must formulate and implement strategies based on innovation, technology and the development of intellectual capital. Few companies, even those at the leading edge of knowledge management, have all the management processes, culture and tools in place to create and harness knowledge in a systematic way. Those starting out on the knowledge management path assume it is a simple extension of information management. In reality, effective knowledge management can involve major changes in process, culture, and technology.


Knowledge Management (KM)

Knowledge management is a discipline best described as a continuing process that focuses on the creation of business performance improvements--centered on people and not technology. (Han, 2001) While technology enhances the feasibility of transferring knowledge between people, knowledge management includes creating and sharing knowledge as an organizational asset to drive the business. Moreover, The value proposition of knowledge management states that there are fundamental business reasons and expected benefits for pursuing this process approach. There are gains the organization can achieve by using knowledge management to measure results, such as creating an Intranet and knowledge repositories.

Furthermore, the concept of knowledge management concerns the creation of structures that combine the most advanced elements of technological resources and the indispensable input of human response and decision-making (Raisinghani, 2000).  The notion of knowledge management is nothing new.  Corporations have always had some process to synthesize their experience and integrate it with knowledge acquired from outside sources (Sarvary, 1999).  However, not until recently have scholars and practitioners alike become increasingly attracted to the science of applied knowledge within organizations.  This movement is unique in combining information technology theory with pioneering work on models of learning organizations (Senge, 1994).

The distinction between tacit and explicit knowledge is critical to understanding the working mechanisms of knowledge management.  Lubit (2001) observes that explicit knowledge is codified and stored in the “organizational memory” and is available to employees throughout the structure.  Conversely, tacit knowledge is personal knowledge possessed by an employee that may be difficult to express or communicate to others.  Because a population of employees possesses a theoretically infinite number of mental models, or ways of perceiving information, tacit knowledge is often individualized and highly specific in scope.  Lubit (2001) argues that it is this knowledge that is often difficult to disseminate to others in the context of the workplace, but it is also invaluable to propagate because it is a unique asset that is very hard to copy by other firms.  Hence, given this premise, it can be logically understood that tacit knowledge can form the basis for competitive advantage, but to do so it must become manifest in the real world and utilized to actualize the strategic agendas of the organization.  Ideally, a firm can better manage its intellectual capital base by uncovering the tacit knowledge of its employees and turning that into explicit knowledge, available to others (Erickson & Rothberg, 2000).

Moreover, Stonehouse et al. (2001) noted that the concept of knowledge management has evolved from research on organizational learning.  They argue that it is simply the next phase of an evolutionary process of strategic frameworks that seek to explain how an organization may generate superior performance relative to the competitors in its market.  Earlier approaches centred on the competitive position of an organization within its industry.  Subsequent attention was focused on the creative mastery of an organization’s core competencies to achieve competitive advantage.  Currently, the concentration is firmly upon effectively “working” knowledge to produce the fruits of fiscal gain, as reflected in the company’s financial statements and stock price. Concurrently, Senge (1994) contends that the only construct within grasp of an organization, which will produce lasting, sustainable advantage, is the usable knowledge produced from purposeful, well-orchestrated learning by all employees within the firm.  This collaborative effort toward an openness to learning and new ideas creates a culture of excitement and creativity, which forms the basis for the organization as a learning organism synergistically created by the steadfast efforts of individual employees committed to this underlying philosophy.

Most investigation into knowledge management has been concerned with capturing the knowledge embedded inside of the heads of individual employees (Nidumolu et al., 2001).  This “within” approach is certainly a substantial place to begin the challenge of developing a thriving knowledge base, but appears to be less than holistic in its efforts.  The vast expanse of knowledge outside the traditional boundaries of the company may prove just as useful (Gold et al., 2001).  Nevertheless, the challenge of capturing functional knowledge in the midst of overwhelming information availability remains elusive (Oder, 2001).  If a company is bathed in the true spirit of learning (Senge, 1994), it will develop structures and processes which create a balanced and complementary effort toward combining knowledge acquisition from inside and outside of the firm.

The study intends to investigate the effects of knowledge management to the success of an organization. Specifically, the study intends to answer the following questions:

1.            What is the knowledge management strategies used in the organization?

2.            How do the firms cope up with the rapid change in the business sector using knowledge management?

3.            What are the effects of these knowledge management strategies on the goals, objectives and long-term plans on the organizations?

4.            How potent is knowledge management in the attainment of goals/objectives, keeping up with competition on other organizations?

Furthermore, the study intends to test the following null hypothesis:

“The use of knowledge management significantly affects the success of the organization.”


This study will utilize the model of competitive advantage to explore, explain and analyze the dynamics of the financial industries in relation to its need to reformat, establish or improve its present knowledge management. To provide the data needed to compare, contrast and evaluate the effectivity/ineffectivity of management styles that organizations use to keep up with the competition, the study will be acquiring three organizations. This paradigm would serve as the guide in the breakdown of the strengths and weaknesses of knowledge management approach among the organization. Consequently, the theoretical debate on the kind of strategies that would be most efficient and competitive in the market would be evaluated. This paradigm was chosen for the study because of its dynamic approach on the topic of persistence and advantage among contenders for market supremacy. Competitive advantage discusses the condition which enables a company to operate in a more efficient or otherwise higher-quality manner than the companies it competes with, and which results in benefits accruing to that company. Primarily, it deals with the concept of change and how companies are able to cope up with it and get the bigger share of the market. Business commentators have all been talking about change as the key to success and survival for at least two decades. It is equally clear that the rate of change is getting faster. But there’s a subtle change to the game. It’s not change that matters – we all have to accept that as given – it’s the ability to change fast that matters.


The study will be using the use of knowledge management as its independent variable while the success of the organization as the dependent variables. Moreover, the terms that will be used in the study defined as follows:

Knowledge Management -- caters to the critical issues of organizational adoption, survival and competence in face of increasingly discontinuous environmental change

Competitive Advantage - Condition, which enables a company to operate in a more efficient or otherwise higher-quality manner than the companies, it competes with, and which results in benefits accruing to that company.

Management - The group of individuals who make decisions about how a business is run.
Success of the Company – this will be defined by the profits acquired by the organization after they have utilized knowledge management techniques.



Research methodology and techniques for data collection

Research requires an organized data gathering in order to pinpoint the research philosophies and theories that will be included in the research, the methodology of the research and the instruments of data interpretation. In this study, the Research Process “Onion” will be utilized so that the findings of the study can be thoroughly established. The inner part of the onion describes the methodology portion whereas the outer part discusses the strategies that can be utilized in interpreting the results of the findings.

The descriptive research method uses observation and surveys. In this method, it is possible that the study would be cheap and quick. It could also suggest unanticipated hypotheses. Nonetheless, it would be very hard to rule out alternative explanations and especially infer causations. Thus, this study will use the descriptive approach.  This descriptive type of research will utilize observations in the study.  To illustrate the descriptive type of research, Creswell (1994) will guide the researcher when he stated: Descriptive method of research is to gather information about the present existing condition.  The purpose of employing this method is to describe the nature of a situation, as it exists at the time of the study and to explore the cause/s of particular phenomena. The researcher opted to use this kind of research considering the desire of the researcher to obtain first hand data from the respondents so as to formulate rational and sound conclusions and recommendations for the study.

The research described in this document is partly based on quantitative research methods. This permits a flexible and iterative approach. During data gathering the choice and design of methods are constantly modified, based on ongoing analysis. This allows investigation of important new issues and questions as they arise, and allows the investigators to drop unproductive areas of research from the original research plan.

This study also employs qualitative research method, since this research intends to find and build theories that would explain the relationship of one variable with another variable through qualitative elements in research. These qualitative elements does not have standard measures, rather they are behavior, attitudes, opinions, and beliefs.

Furthermore, as we define the qualitative research it is multimethod in focus, involving an interpretative, naturalistic approach to its subject matter. This means that qualitative researchers study things in their natural settings, attempting to make sense of, or interpret phenomena in terms of the meanings people bring to them. Accordingly, qualitative researchers deploy a wide range of interconnected methods, hoping always to get a better fix on the subject matter at hand.

Data analysis techniques

The primary source of data will come from the researcher-made questionnaire and interview questions. The primary data frequently gives the detailed definitions of terms and statistical units used in the study. These are usually broken down into finer classifications.

The secondary sources of data will come from published articles from social science journals, theses and related studies on knowledge management. Acquiring secondary data are more convenient to use because they are already condensed and organized. Moreover, analysis and interpretation are done more easily.

Validity of the Data

For this research design, the researcher will gather data, collate published studies from different local and foreign universities and articles from social science journals; and make a content analysis of the collected documentary and verbal material.  Afterwards, the researcher will summarize all the information, make a conclusion based on the null hypotheses posited and provide insightful recommendations on the dealing with the success of an organization using knowledge management techniques.


Creswell, J.W. (1994) Research design. Qualitative and quantitative approaches. Thousand Oaks, California: Sage

Erickson, G.S. & Rothberg, H.N. (2000). Intellectual capital and competitiveness: Guidelines for policy. Competitiveness Review, 10 (2), 192-198.

Gold, A.H., Malhotra, A., & Segars, A.H. (2001). Knowledge management: An organizational capabilities perspective. Journal of Management Information Systems, 18 (1), 185-214.

Han, Frances. (2001) “Understanding Knowledge Management.The Public Manager. Vol. 30, 2. p34

Lubit, R. (2001). Tacit knowledge and knowledge management: The keys to sustainable competitive advantage. Organizational Dynamics, 29 (3), 164-178

Nidumolu, S.R., Subramani, M., & Aldrich, A. (2001). Situated learning and the situated knowledge web: Exploring the ground beneath knowledge management. Journal of Management Information Systems, 18 (1), 115-150.

Oder, N. (2001). The competitive intelligence opportunity. Library Journal, 126 (4), 42-44.

Raisinghani, M.S. (2000). Knowledge management: A cognitive perspective on business and education. American Business Review, 18 (2), 105-112.

Sarvary, M. (1999). Knowledge management and competition in the consulting industry. California Management Review, 41 (2), 95-107.

Senge, P.M. (1994). The fifth discipline: The art and practice of the learning organization. New York: Currency Doubleday.

Stonehouse, G.H., Pemberton, J.D., & Barber, C.E. (2001). The role of knowledge facilitators and inhibitors: Lessons from airline reservations systems. Long Range Planning, 34 (2), 115-138.


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