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Procedia Economics and Finance 7 (2013) 150 – 157

International Conference on Economics and Business Research 2013 (ICEBR 2013)

Knowledge Sharing Success for Sustaining Organizational

Competitive Advantage
Hayati Abdul-Jalala*, Paul Toulsonb, David Tweedc
a
Faculty of Business Management, Universiti Teknologi MARA, Sri Iskandar 32600, Perak Malaysia
b,c
College of Business, Massey University, Palmerston North 4412, New Zealand

Abstract

The knowledge-based view of organisational behaviour emphasizes the importance of knowledge for organizations to
retain their competitive advantage. Thus, the success of knowledge sharing is vital because, if successful, it results in
shared intellectual capital. Knowledge sharing success, to a great extent, lies in the employees’ capability to share
knowledge. It is important that this knowledge sharing capability is translated into success through appropriate HRM
practices. Knowledge sharing capability is therefore an important factor to consider when designing human resource
management (HRM) practices that help to facilitate successful knowledge sharing behaviours among employees. 270
knowledge workers of knowledge-based organisations were surveyed about their perceptions of knowledge sharing
capability, and knowledge sharing success. Our study confirms that knowledge sharing capability is important for
knowledge sharing success, suggesting its significant role in the design of knowledge-driven HRM practices. This has
important implications for HRM delivery in Malaysian and global knowledge based organisations, as the lack of
employee’s sharing capability on the success of knowledge sharing may lead to an inability of the organization to remain
competitive. Implications for HRM practices and future research directions are discussed in detail.

© 2013
© 2013 The Authors. et
Abdul-Jalal Published by Elsevier
al. Published B.V. B.V. Selection and peer-review under responsibility of ICEBR 2013.
by Elsevier
Selection and peer-review under responsibility of ICEBR 2013
Keywords: HRM practices; knowledge sharing capability; knowledge sharing success; competitive advantage

1. Introduction

The knowledge-based view of competitive advantage acknowledges the importance of knowledge and human
resource (HR) competencies as an organization’s valuable assets for the sustenance of organizational competitive

* Corresponding author.
Email address: hayat836@perak.uitm.edu.my

2212-5671 © 2013 The Authors. Published by Elsevier B.V.

Selection and peer-review under responsibility of ICEBR 2013
doi:10.1016/S2212-5671(13)00229-3
 Hayati Abdul-Jalal et al. / Procedia Economics and Finance 7 (2013) 150 – 157 151

advantage (Hislop, 2003; Oltra, 2005). Physical capital such as buildings, machinery and other tangible assets
that originate from outside the organization are more likely to be imitated by competitors. However knowledge
(which is an intangible asset) is often generated within the organization through creation and application by the
organisation’s human resources (human capital pool). Knowledge that is significantly related to employees’
specific roles, skills and cognitive abilities, and is socially and culturally embedded in their behaviours and
practices they undertake, contributes to organisational performance differentials between different competitors
(Hislop, 2003; Grant, 1996; Hislop, 2002). Thus, knowledge held by particular employees in an organisation must
consequently be passed along to other employees for its value to be appropriated (Cabrera et al., 2006). The
primary goal for any knowledge sharing is to successfully share the sender’s knowledge to the recipient
(Cummings and Teng, 2003). Knowledge sharing success, the extent to which recipients obtain ownership of,
commitment to, and satisfaction with shared knowledge, therefore, plays a critical role in creating value for
organizational competitiveness (Cummings and Teng, 2003). Organizations with greater knowledge sharing
success will be better in responding to a changing environment for performance improvement. However,
successful knowledge sharing will to some extent depend on the employees’ capability to organise the knowledge
resources that they receive through a network of relationships (Andrawina et al., 2008). This includes such
activities as synthesising and utilising their newly acquired knowledge, and making decisions on how they will
communicate such knowledge they consider is relevant to others.
Employees who are reluctant to consider knowledge sharing as a learning process may be indicating their
inability to successfully share knowledge (Wang and Noe, 2010), which may result in work inefficiencies,
increased errors, or falling work quality. This is because knowledge sharing creates an opportunity to expand
employees’ understanding on the knowledge and provides a solution to the ineffective communication that can
occur when there are differences in the degree of knowledge similarity that creates understanding among transfer
parties (Wang and Noe, 2010). The knowledge governance approach (KGA) highlights that HRM practices are a
primary means through which organizations can influence employees’ behaviors, attitudes, and perceptions
towards successful knowledge sharing (Foss, 2007; Minbaeva, 2008). Theoretical support for this comes from the
resource-based view (RBV) of HRM (Penrose, 1959) where there is value in an organization’s employees
because they have knowledge and experiences that are unique to that organization. This, together with their
understanding of the particular context and environment, makes imitation or replacement by competing
organizations very difficult, thus sustaining competitive advantage. For example, Massa and Testa (Massa and
Testa, 2009) in their comparative case study approach of how Italian food producers manage their knowledge
found that food producers’ competitive advantages relied on their employees’ knowledge sharing in creating
innovative capability. Knowledge sharing strategies in the context of the RBV that are aligned with
organizational performance are empirically supported (Kearns and Lederer, 2003). There is also empirical
support for knowledge sharing and outsourcing success (Lee, 2001). Lubit, 2001, suggests that tacit knowledge is
an inimitable competitive advantage held by an organization, and this needs to be turned into core organizational
competence through knowledge sharing. This in turn means that knowledge sharing capability itself becomes an
inimitable competitive advantage. Thus, appropriate HRM practices play an important role in translating
employees’ capability into successful knowledge sharing for sustaining competitive advantage. Knowledge
sharing capability is therefore an important factor to consider when designing HRM practices for knowledge
sharing success.
In this study, we attempt to examine whether employees’ perceptions of their knowledge sharing capability
will affect their knowledge sharing success. Therefore, the objective of this research is to refine and extend the
understanding of how an employee’s sharing capability influences knowledge sharing success so that HRM
practices become success ‘catalysts’ within an organization. In this research, knowledge sharing capability is
defined as the extent to which employees possess abilities, motivation and opportunities to share knowledge
(Siemsen et al., 2008). The ability to share knowledge describes the extent to which both transfer parties (sender
152 Hayati Abdul-Jalal et al. / Procedia Economics and Finance 7 (2013) 150 – 157

and receiver) have similarity in knowledge bases (Cummings and Teng, 2003). Employees’ motivation to share
knowledge explains the degree to which employees will remain to stay with the organisation (Hislop, 2003). The
opportunity to share knowledge, explains the extent to which employees are sufficiently provided with training
and job rotation during their professional lives (Minbaeva et al., 2010; Adler and Kwon, 2002)

2. Literature Review

2.1 HR knowledge sharing capability and knowledge sharing success

Minbaeva et al., (2010) describe the combination of ability, motivation and opportunity as “conditions of
individual actions”. This tripartite schema is a key mechanism for achieving knowledge flows within an
organization (Adler and Kwon, 2002; Nahapiet and Ghosal, 1998). Developing the ability to share knowledge,
which is the extent to which both senders and receivers have similarities in knowledge bases (Cummings and
Teng, 2003), signifies the need for employees to be able to understand and organise the knowledge that they
receive through both formal and informal workplace relationships. This requires the development of a shared
jargon and language because it facilitates the identification, combination, and interpretation of information. These
obligations and expectations among employees enhance their motivation to voluntarily share their knowledge and
expertise (Nahapiet and Ghosal, 1998). To understand the central features of this contention, Widen-Wulff and
Ginma, 2004, suggest the importance of considering the ways people form groups in a workplace and develop
cooperative behaviour among themselves. Tyler and Blader, 2001, have identified cooperative group behaviours
as: rule following, a willingness to help the groups, and a desire to continue in their group memberships. Their
research confirms that group status (pride) significantly affects employees’ motivation to engage in groups
through their desire to continue group involvement. It is reasonable to suggest that, in this context, employees’
motivation to share knowledge relates to their intention to remain with the organization. In the present research,
employees’ motivation to share knowledge is linked to the degree to which employees intend to remain in the
organization (Hislop, 2003). According to Nahapiet and Ghoshal, 1998, both formal and informal relationships
create the medium of the dissemination of information and resources. Previous research suggests that the
opportunity to share knowledge depends on HRM practices that allow frequent and intense social exchange, and
that support the development of new formal and informal workplace relationships (Currie and Kerrin, 2003).
Thus, the extent to which employees have been provided with sufficient training and job rotation during their
professional life defines the opportunity to share knowledge (Currie and Kerrin, 2003; Yahya and Goh, 2002).
Research into knowledge sharing has consistently identified issues associated with the antecedents or enablers
and facilitation mechanisms for best achieving knowledge management processes (Currie and Kerrin, 2003;
Collins and Smith, 2006; De Long and Fahey, 2000; Minbaeva, 2005 and 2008; Nayir and Uzuncarsili, 2008;
Oltra, 2005; Ruppel and Harrington, 2001). Much has been written about information technology and
organizational matters in relation to those antecedent issues, but little attention is paid in the literature to the
nature of knowledge, which can influence the way it is to be shared, or, contrarily, the lack of employees’
capability to share knowledge. While the significance of HRM in knowledge management has been debated, most
studies of knowledge management initiatives have concluded that people or human resources are the heart of the
knowledge management philosophy (Hislop, 2002; Ruppel and Harrington, 2001; Robertson and Hammersly,
2000). In a similar vein, Prichard, 2000, suggests that knowing is an integration process that involves active
agents bringing their embodied/embedded knowledge to bear on a focal point. This includes the HR capabilities
of “authoring knowledge content, codifying knowledge into ‘knowledge object’ by adding context, contributing
personal knowledge to the organizational database, sharing personal knowledge in formal interaction with or
across teams or work units, or in informal interactions among individual (Hsu et al., 2007). Thus, HR capability
 Hayati Abdul-Jalal et al. / Procedia Economics and Finance 7 (2013) 150 – 157 153

to explicitly make the embodied and embedded knowledge codifiable for transfer is vital for successful
knowledge sharing.

3. Research methodology

The population of interest for this research is employees identified as “knowledge workers” of Malaysian-
owned MSC-status information technology (IT) companies. MSC-status is awarded to both local and foreign
companies that develop or extensively use multimedia technologies in enhancing their products and services
(MDeC, 2009). These IT companies are characterized as software developers and are IT solutions providers to
government agencies situated in Wilayah Persekutuan and Selangor. For this research, IT companies with over
100 employees of multiracial composition were selected. Companies with over 100 employees are most likely to
have formally established HR systems (Collins and Smith, 2006). The criteria for the sample selected for the
study were: i) the respondents for our current research must be Malaysian nationality; ii) have worked with the
company for at least a year; and iii) be involved in creating new knowledge or developing innovations.
Knowledge sharing capability variables were operationalized using a combination set of measures from
Cummings and Teng (2003); Siemsen et al., (2008); and Jehn, (1995). Knowledge sharing success (KSS) was
measured using items developed by Cummings and Teng, 2003. A simple random sampling technique was used
in this research. Out of the 500 respondents who were selected using random number tables, 270 completed
surveys that were usable (a 54 per cent response rate). Pairwise deletion was used to deal with missing cases, i.e.,
while missing cases were omitted, cases with valid values for other variables were included in the statistical
analyses.

4. Results and discussion

All items of both knowledge sharing capability and success were analyzed using principal components
analysis (PCA), and a varimax rotation was used to increase the interpretability of the factor solution (Hair et al.,
2010). Bartlett’s test of sphericity was statistically significant and the Kaiser Meyer Olkin (KMO) value was
0.934. The PCA on the questionnaire measurement items of this study yielded three factors with eigenvalues
greater than one that accounted for 57.71 per cent of the total variance, and the first factor accounted for 35.36
per cent for the variance. Component 1 (see Table 1) clearly represents knowledge sharing success, Component 2
considered ‘Competency’, describes those who are concerned with performing well in executing certain tasks, and
are committed and determined to do so, indicating their ability and motivation characteristics. When reviewing
items comprising Factor 3, it was clear that this factor incorporates all questions regarding ‘Opportunity’ to share
knowledge. The value of the alphas indicates that each of the scales possessed a moderate to high level of internal
consistency. The overall alpha for the both knowledge sharing capability and success measures was found to be
0.782 and 0.943 respectively. Regression analysis, without implying causality, was conducted for exploratory
purposes in describing the association between variables (Meyers et al., 2006). A significance level of 0.05 was
used in all regression analyses.
154 Hayati Abdul-Jalal et al. / Procedia Economics and Finance 7 (2013) 150 – 157

Table 1. Component matrix for knowledge sharing capability and success.

Components
Cronbach’s alpha , α = 1 2 3
0.943 0.805 0.665
Employees develop intimate understanding of knowledge .826
Employees inspired by this knowledge to do best performance .778
Employees care about implementation of this knowledge .772
Employees satisfied with the quality of knowledge .769
Employees feel sense of responsibility on knowledge .767
Employees feel deciding to work this knowledge is great decision .767
Employees feel this knowledge is the best .765
Employees present this knowledge as important to org success .765
Employees willing to put great effort beyond normally expected .757
Employees feel there is much to be gained by continuing .747
Employees satisfied with the quality of knowledge transfer process .746
Employees able to exercise great discretion .680
Employees pleased they learned over other knowledge .652
Employees feel high degree of ownership .650
Employees changed their satisfaction with this knowledge .613
Employees resent the continued control that the source has over how to use knowledge .568
Employees have invested time skills in this knowledge & transfer processes .527
Employees proud to tell others they working with this knowledge .471
If employees have their own way, they will continue working .829
Employees thought seriously about leaving .742
Employees have knowledge base necessary to understand .739
Sender has knowledge base necessary to understand .706
Differences in basic work knowledge make discussion difficult .679
Employees do not expect to stay longer .502
Employees have little training & job rotation opportunity .854
Additional training & job rotation are limited .812
Employees have sufficient training & job rotation opportunity .565

Competency and the opportunity to share knowledge were positively and significantly associated with
knowledge sharing success (see Table 2), indicating that when employees perceive that they have the capability
to share knowledge, the greater their perceived knowledge sharing success will be. The key point is that these
HR attributes are vital for knowledge management initiatives, which researchers argue are important for
countering the assumption that the ‘technical nature’ of knowledge management is best solved by introducing
efficient and sophisticated information systems (Hendriks, 1999; Hislop, 2002 and 2003; Zarrage and Bonache,
2005). It also empirically confirms the claim made by HRM scholars that the “factor” with the greatest potential
to increase knowledge sharing success is the people. For example, Yahya and Goh, 2002, suggest that people are
at the heart of KM philosophy and that successful knowledge sharing lies, to a greater extent, in the human
resources’ capabilities to share knowledge. The importance to develop, organise and utilise,( as well as having a
good capacity to retain employees’ capabilities) as Martensson, 2000, argued is crucial for organizational
sustainable competitive advantage. This is because both tacit and explicit components of knowledge are mutually
constituted and inseparable (Hislop, 2002). The present evidence empirically suggests the importance of HRM
practices in the development and enhancement of employees’ capabilities for successful knowledge sharing
within organizations. Thus, the finding could help stakeholders and management in designing their HRM
practices that not only advance employees’ know-how, but create successful knowledge sharing and a valued
workforce for organizational sustainable competitive advantage, thus increasing the potential value of an
organization’s human capital pool.
 Hayati Abdul-Jalal et al. / Procedia Economics and Finance 7 (2013) 150 – 157 155

Table 2 Results of regression analyses of knowledge sharing success on knowledge sharing capability

Variables β Std error Std β t ρ

Competency 0.565 0.052 0.556 10.870 0.000

Opportunity 0.166 0.052 0.163 3.188 0.002
2
R = 0.336; F = 64.163

The implication of our results is that managers can improve the level of knowledge sharing success by
ensuring that the design of HRM practices are customised to support the increase of employees’ knowledge
sharing capabilities. Increasing employees’ capabilities through organisational specific training and development
programmes, competence-based performance appraisal, rewards, or hiring talented and competent staff is then
recommended. For example, in designing training and development programmes for increasing employees’
sharing capabilities, HRM managers should critically evaluate and examine the organizational strategic planning
that aims to support knowledge sharing so that the training and development programmes are aligned
accordingly. Both supervisors and employees should be consulted so that training designs match the sharing
capabilities needed to facilitate job execution. This will ensure that accurate knowledge and skills needed to
increase employees’ sharing capabilities are identified. In addition to this effort, organizations can also improve
knowledge sharing success by hiring someone with the right talents or core competencies required. While the
traditional hiring approach has focused primarily on evaluating a candidate’s skills and technical qualifications,
both talent and competency based approaches emphasise the importance of finding the “right” candidate that can
fit to the designated role as well as establishing the behavioural traits required (Hiltrop, 1999; Hughes and Rog,
2008; Rowe, 1995). HRM managers can contribute to the shifting of hiring paradigm for the “right” candidates
by incorporating extensive staffing procedures as suggested by Minbaeva, 2005, to include “examination of the
competencies, extensive recruitment and selection procedures”.
The findings of this study should be interpreted with caution because of several limitations. These include
sample size and context of study as well as the nature and scope of questions measuring of all constructs. Future
research should collect data from a larger sample size in other business sectors from both private and public
employees in other cultural settings. Perhaps different and lengthier measures will be used to examine the
relationship proposed. A comparative study should also be undertaken to see if differences of perceptions of
knowledge sharing capability, and knowledge sharing success exist between private and public sector employees
in both Malaysia and other international contexts. While this study makes important contributions to our
understanding of the relationships between employees’ perceptions on knowledge sharing capability and success
in MSC-status IT organisations, clearly, future studies might gain additional insights by exploring the roles
played by organizational culture or other knowledge management processes. To conclude, our study highlights
the crucial importance of HRM practices in translating employees’ capability into successful knowledge sharing
for sustaining organizational competitive advantage.

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