DYNAMICS OF KNOWLEDGE MANAGEMENT

AND ITS EFFECT ON ORGANIZATIONAL

PERFORMANCE

SADAY HASANLI
Table of Contents
1. Introduction..................................................................................................................................3

1.1. Contextual Background and Problem Statement..............................................................3

1.2. Research Aims and Objectives.........................................................................................3

1.3. Research questions............................................................................................................4

2. Literature Review........................................................................................................................4

3. Methodology................................................................................................................................5

References........................................................................................................................................6
1. Introduction
1.1 Contextual Background and Problem Statement
Today's organizations are experiencing an extremely competitive and turbulent business
environment. In this environment, they are under pressure to react more rapidly and accurately to
changes in customers' needs and competitors' actions, Many organizations have coped with this
pressure through radical decentralization of their hierarchical structures (Halal, 1996; Mohrman
et al, 1995), More recently, the proliferation of personal computers and communication networks
has enabled organizations to acquire and retain distributed organizational structures (Ahuja,
1996; Tapscott & Caston, 1993; Tapscott, 1995). To date, most companies have embarked on
knowledge management work in search of near-term efficiency, productivity, and service quality
improvements through knowledge reuse. However, they also envisage longer-term benefits,
including personnel motivation, faster learning, and increased innovation.
To stay ahead in today's highly unstable and competitive business environment,
organizations try to develop new products with better quality, faster time to market, and higher
customer satisfaction. It has become increasingly apparent that potential bottlenecks in achieving
these goals lie not just in labour or capital management, but in the ability to manage effectively
their employees' knowledge (Quinn et al. 1996). Especially as more organizations are defined by
working relationships governed by functional interdependencies rather than organizational
boundaries, knowledge management is a major challenge facing modern organizations. An
organization must have “good enough” technology to make progress, especially in the
transnational business environment of today. However, to achieve bottom-line success, even
more attention must be paid to the other issues. Experience in many organizations has shown that
no more than one-third of the knowledge management budget should be devoted to technology
(O’Dell, Elliott, and Hubert 2000).

1.2 Research Aim and Objectives

The aim of the research is to find out dynamics of knowledge management and effect of
it to the organizational performance. There are some objectives which need to be taken into
account in order to achieve the aim of research and are as follows:
 To analyze the concept knowledge management.
  To investigate the challenges which are faced by companies in adopting knowledge
management using technology.
 To determine the effect of knowledge management on organizational performance.
 To recommend some strategies for appropriate usage of technologies for collecting
knowledges for management.
 To obtain general information about current state of knowledge management and its
affects to the organizational performance.

1.3 Research questions

The research question is as follows:

RQ: 1) What is the role of knowledge management in organizational performance?

2) How can we collect exactly information for managing knowledge and increasing
productivity of organizations?

2. Literature Review
Knowledge originates in and with people: it creates networks. Communities and routines
whose life spans exceed that of the tenure of the individual members (Cerniawska& Potter, 2001
Leihowitz 2000) The salient appeal knowledges management for corporations is that the value of
knowledge endures beyond the minds of specific individuals who may have participated in the
creation of that knowledge reduce cycle time, improve quality, provide access to expertise.
Knowledge management is to improve organizational performance by enabling individuals to
capture, share, and apply their collective knowledge to make optimal decisions in real time. Reid
G. Smith and Adam Farquhar, 2000) Some definitions of knowledge management focus on its
purpose. These definitions are helpful because they focus on what knowledge management hopes
to achieve, and its value for the organization. The main themes in these definitions are - to create
competitive advantage; to improve performance; to become a learning organization; to improve
knowledge sharing; to incense knowledge resources.
The development of KM as a discipline started in the early nineties in the entrepreneurial
world (Chase, 2006; Chauvel & Despres, 2002; Hislop, 2003). McElroy (1999) asserted that the
first generation (1990-1995) of KM represented the management of information. Its development
was based on existent organizational knowledge which should be captured, described and
distributed through technological interfaces. According to McElroy (2000), the objective of this
generation is to enhance the performance of each employee identifying and supplying the
necessary knowledge to accomplish his job. Alvesson and Karreman (2001) argue that
knowledge is an ambiguous, unspecific and dynamic phenomenon, intrinsically related to
meaning and the understanding process, and therefore difficult to manage. Knowledge itself is a
complex, dynamic, polemic and abstract construct.

3. Methodology
The methodology is the process of researching a given phenomenon, and the research
design refers to how this phenomenon will be studied. The research philosophy for this study
will be concerning interpretivism philosophy while applying the inductive reasoning approach.
Therefore this philosophical approach will enable the author of the study to attain a deeper
understanding and experience. Quantitative designs tend to provide data that can be easily
generalized. Therefore the researcher will use a quantitative approach because it provides the
benefit of gathering real answers from survey’s participants and have deeper insights.
Quantitative research method will be applied by using questionnaire among employees of
marketing companies. For this research I will use quantitative method for collecting answers
from employees and managers by using survey. Survey questionnaires will be measured on a
Likert scale of type 1-5 (I strongly agree with 1 = strongly disagree with 5)

Variables:

Independent- Knowledge Management

Dependent- Organizational effectiveness and performance

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