using human resource management and knowledge …
TRANSCRIPT
Using Human Resource Management and Knowledge Management
to Drive Competitive Advantage
A requisite complementary relationship to drive competitive advantage for organizations
Abdoul K. Conde
ID: 5717193036
SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE
DEGREE OF INTERNATIONAL MASTER OF BUSINESS ADMINISTRATION
GRADUATE SCHOOL OF BUSINESS
SIAM UNIVERSITY
ACADEMIC YEAR 2016
COPYRIGHT OF SIAM UNIVERSITY
ABSTRACT
This paper looks at the question of whether or not human resource management and
knowledge management, when used complementarily, help businesses gain competitive
advantage. This is important because people are dynamic, and originate from diverse
cultural, social, ideological, racial, and religious orientations, and also because answering
this question helps to show knowledge gaps in organizations as a result of their failure to
effectively implement HRM and KM practices, potential other reasons why those gaps exist,
and how they can be remedied. The methodology used in this research, is qualitative, and
the conclusions arrived at in this paper are a result of interviews, online research, surveys,
and questionnaires from a wide range of sources across various business types; all of which
are statistically analyzed (ie. using correlation, and regression analysis), to conclude, finally,
that by effectively complementing human resource practices, knowledge management
practices, organizations do gain competitive advantage. In other words, that our Null
Hypothesis is rejected, and our Alternate Hypothesis accepted.
KEYWORDS: Knowledge Management (KM); Competitive Advantage; Human Resource
Management (HRM)
DEDICATION
There is an adage in Africa that I really like, and am a strong believer of; it goes like this “One
finger cannot hold a pen to write; it needs the help of other fingers”. I say this to mean that
without the help of the below listed, very important people, I would not have been successful in
completing this paper.
This work is dedicated firstly to ALLAH almighty, my Parents, and family, especially my senior
brother Mr. Ibrahim K. Conde, and Sister Mrs. Dissoue C. Veikai, my wife Mrs. Farida C. Conde
who stood with me through it all despite my shortcomings, and the hardships she had to endure
with me.
Without all of you, this would not have been a success, and therefore let me say thanks once
more.
Without the help of Mr. Gavin Collins, CEO of Sticky Numbers, I would have not had to chance
to complete my studies because he provided me the financial mean in the form of a job offer, and
personal assistance.
To all of you, I am extremely grateful.
Contents CHAPTER 1 ................................................................................................................................................ 7
INTRODUCTION ....................................................................................................................................... 7
IMPORTANCE OF STUDY ...................................................................................................................... 8
OBJJECTIVE OF STUDY ........................................................................................................................ 9
Research Questions ................................................................................................................................. 9
CONCEPTUAL FRAMEWORK ........................................................................................................ 10
Dependent Variable: ............................................................................................................................. 10
Independent Variables: ........................................................................................................................ 10
RESEARCH HYPOTHESIS ............................................................................................................... 11
RELATED TERMINOLOGIES ......................................................................................................... 13
OBJECTIVES AND RESULTS TO BE ATTAINED ....................................................................... 13
CHAPTER 2 .............................................................................................................................................. 14
THEORY AND RELATED RESEARCH .............................................................................................. 14
Competitive Advantage: What is it? ................................................................................................... 14
Online Search Visibility .................................................................................................................... 15
Develop and Market your content ................................................................................................... 16
Social Media Activity and Success ................................................................................................... 16
Top Performing Keywords ............................................................................................................... 16
HRM and Competitive Advantage ...................................................................................................... 17
Competitive Pay Practice as a contributor to Competitive Advantage............................................ 18
Effective Conflict Management as a contributor to Competitive Advantage .................................. 20
Smart Recruitment as a contributor to competitive advantage ........................................................ 21
Training (Employees Development) as a contributor to Competitive Advantage .......................... 22
Knowledge Management (KM) and Competitive Advantage ........................................................... 25
Knowledge Audit as a contributor to Competitive Advantage ......................................................... 26
Questions organizations should expect to be asked by knowledge auditors ................................ 27
Technology as a contributor to Competitive Advantage ................................................................... 29
Knowledge creation, and sharing as contributors to Competitive Advantage ................................ 31
The Knowledge Creation Process – The SECI Model ................................................................... 32
SECI MODEL ................................................................................................................................... 32
Relative Human Resource to Knowledge Management Concepts.................................................... 42
CHAPTER 3 .......................................................................................................................................... 44
METHODOLOGY (The Why? How? and What?) ........................................................................... 44
CHAPTER 4 .......................................................................................................................................... 46
FACTS AND FINDINGS ..................................................................................................................... 46
Regression Analysis .......................................................................................................................... 46
Regression analysis for the Human Resource set of Independent Variables ............................... 46
Regression Analysis between Competitive Pay and Competitive Advantage .............................. 46
Regression Analysis between Effective Conflict Management and Competitive Advantage ..... 49
Regression Analysis between Smart Recruitment and Competitive Advantage ......................... 51
Regression Analysis between Training and Competitive Advantage ........................................... 53
Correlation analysis for the Human Resource set of Independent Variables ............................. 55
Correlation between Competitive Pay and Competitive Advantage ............................................ 55
Correlation between Effective Conflict Management and Competitive Advantage ................... 56
Correlation between Smart Recruitment and Competitive Advantage ....................................... 57
Correlation between Training and Competitive Advantage ......................................................... 58
Regression analysis for the Knowledge Management (KM) set of Independent Variables ....... 59
Regression Analysis between Knowledge Audit and Competitive Advantage ............................ 59
Regression Analysis between Technology and Competitive Advantage ...................................... 61
Regression Analysis between Knowledge Sharing and Competitive Advantage ........................ 63
Regression Analysis between Knowledge Retention and Competitive Advantage ..................... 65
Correlation analysis for the Knowledge Management set of Independent Variables ................ 67
Correlation between Knowledge Audit and Competitive Advantage .......................................... 67
Correlation between Technology and Competitive Advantage .................................................... 68
Correlation between Knowledge Sharing and Competitive Advantage ...................................... 69
Correlation between Knowledge Retention and Competitive Advantage ................................... 70
Kindly find below, a Pie Chart presentation of the survey questionnaire response results ....... 71
CHAPTER 5 .......................................................................................................................................... 74
CONCLUSION ..................................................................................................................................... 74
RECOMMENDATION ........................................................................................................................ 75
REFERENCES ...................................................................................................................................... 76
CHAPTER 1
INTRODUCTION
As information, and communications abound more than ever before in this information age, as
humans, we are beset from all angles, and in virtually every aspect of life as we know it, and must,
therefore, be information conscious; something only achievable if we consistently endeavor to
improve what we know, seek new knowledge, share and implement it accordingly, because we are
either willing or unwilling participants in a dynamic information galaxy. Being fixtures in
organizations, social groups, communities, etc., we thrive on information availability, processing,
dissemination, and implementation with others in our proximities, as well those in distant
geographical locations.
Additionally, because we hail from variant races, religions, cultures, etc., the effective
management of people the people element; human resource management) becomes a necessity in
order to establish a friendly platform that can potentially enhance the smooth, and effective
management of knowledge on an individual, and organizational level in our bids to attain
organizational goals. However, most organizations focus primarily on profitability; thereby
glossing over the intricate details that contribute immensely to said profits, and as well, possess
delicate potential to catalyze a chain reaction that may avoid the realization of such profits.
This paper digs into how human resource management and knowledge management complement
or should complement each other in helping organizations attain their objectives, and therefore,
become more competitive. It looks at human resource practices in organizations, and investigates
how, if at all, those practices aid the process of identifying, creating, attaining, distributing,
implementing, retaining, and developing knowledge within organizations.
The paper also looks at key knowledge management concepts themselves, and seeks to ascertain
if organizations use them effectively, and efficiently to their competitive advantage, while
ameliorating their intellectual core competencies. It is in this light that the paper addresses four
major components/elements of knowledge management in the form of Accountability, Processes,
Technology, and Governance while seeking answers to the four basic knowledge management
questions; because without accountability people may not seem to handle their jobs responsibly;
there has to also be a very comprehensively defined and workable process in the absence of which
people will not have the ‘know-how”; and what can we do without technology these days?
Nothing! Because without the right technologies, we are functionally handicapped by virtue of the
fact that we lack the tools required to execute our respective job descriptions, and without
governance, there is no control of the systems and processes that drive toward success.
IMPORTANCE OF STUDY
It is expedient to firstly highlight the essence or importance of the aforementioned topic. Why is
it vital?
As the research will later show, many companies use human resource to address recruitment,
training, etc, and rarely think about the knowledge component which is a very crucial component
that contributes towards an organization’s memory, and subsequently, its competitiveness. It is,
therefore, very vital that organizations look more into the skill sets of their employees, and
consistently ensure that those skills are periodically, systematically, and successfully progressive
over time by exposing knowledge gaps and repairing them, improving knowledge management
systems, retaining knowledge and treating it as valuable an asset as other traditional assets.
OBJJECTIVE OF STUDY
The purpose of this study is to grasp an understanding of how human resource management within
organizations, as a complementary tool, helps improve knowledge management, thereby helping
organizations realize their overall goals; goals that may either be short-term or long-term, and
making them more competitive, effective, and efficient.
It seeks to find answers to the ensuing research questions, and recommend possible measures that
may potentially enhance the process in hopefully making it a reality.
Research Questions
This research is designed such that is seeks to:
1. Know if companies or organizations really know what knowledge management is
2. Understanding what strategy (codification or Tacit to Tacit) those organizations are
pursuing to enhance their organizational learning process which includes knowledge
sharing and how they retain said knowledge, thereby adding to their knowledge repository.
3. Know how HRM and KM it has helped, helps, or may help organizations achieve their
goals, thereby giving them competitive advantage.
Answering the aforementioned questions enable organizations to execute a comparative
evaluation of their competitiveness as opposed to when they had not considered answering or
investigating those questions.
CONCEPTUAL FRAMEWORK
In other to fully understand all of the above, we need to look at the summarized concepts contained
in the paper by looking at the dependent and independent variables relative to the problem
statement.
Problem Statement: Merging HRM and KM practices lead to poor competitive advantage.
Dependent Variable:
Poor Competitive Advantage: Merging HRM, and KM practices make a company a weak
competitor. In other words, it takes away a company’s competitive advantage.
Independent Variables:
Human Resource Management Practices (Training, Pay, Conflict Management etc., to name a
few), and KM practices help make knowledge management a success story within an organization.
The better the human resource functions, especially in terms of ensuring happy working
relationships internally, the easier it becomes to realize those goals.
Competitive Pay
Conflict Management
Smart Recruitment
Training
Technology
Knowledge Sharing
Knowledge Retention
Knowledge Audits
Poor Competitive
Advantage
Independent Variables Dependent Variable
Please refer to the conceptual framework below for a diagrammatical or visual understanding.
Figure 1.0
The above framework seeks to explain how effective human resource management, and knowledge
management processes help organizations achieve a competitive edge in a vastly, and rapidly
growing competitive business world. It looks at how HR practices such as competitive salary or
pay practices, effective conflict management, smart recruitment, proper training, among many
others, and Knowledge management practices such as knowledge creation, technology, knowledge
sharing and implementation, knowledge audits, and knowledge retention etc., complement each
other in order to make organizations more competitive, and better competitors. The research also
seeks to investigate the following hypothesis:
RESEARCH HYPOTHESIS
Hypothesis 1:
Ho: Competitive pay does not give a company competitive advantage
Ha: Competitive pay does give a company competitive advantage
Hypothesis 2:
Competitive Pay Practice
Effective Conflict Management
Smart Recruitment
Training (Employee Development)
Knowledge Audits
Technology
Knowledge creation and sharing
Knowledge Retention
Poor Competitive Advantage
Ho: Effective conflict management does not give a company competitive advantage
Ha: Effective conflict management does give a company competitive advantage
Hypothesis 3:
Ho: Effective recruitment does not give a company competitive advantage
Ha: Effective recruitment does give a company competitive advantage
Hypothesis 4:
Ho: Effective training does not give a company competitive advantage
Ha: Effective training does give a company competitive advantage
Hypothesis 5:
Ho: Knowledge audits do not give a company competitive advantage
Ha: Knowledge audits do give a company competitive advantage
Hypothesis 6:
Ho: Technology does not give a company competitive advantage
Ha: Technology does give a company competitive advantage
Hypothesis 7:
Ho: Knowledge creation, and sharing does not give a company competitive advantage
Ha: Knowledge creation, and sharing does give a company competitive advantage
Hypothesis 8:
Ho: Knowledge retention does not give a company competitive advantage
Ha: Knowledge retention does give a company competitive advantage
RELATED TERMINOLOGIES
HRM Human Resource Management
KM Knowledge Management
SECI Socialization, Externalization, Combination,
Internalization
SWOT Strengths, Weaknesses, Opportunities,
Threats
IC Intellectual Capital
OBJECTIVES AND RESULTS TO BE ATTAINED
This study is meant to unearth reasons why many organizations do not focus on knowledge
management, or use human resource management to enhance effective knowledge management,
the effects that failure to do so has on those organizations, and the benefits they stand to gain
were they to use human resource management as a tool to boost the intellectual property of the
firm, as well as its organizational memory, and competitiveness.
This paper aspires to provide results of real companies, relative to how their human resource
systems, processes, and/or policies influence effective knowledge management in their
respective organizations, how those organizations create, categorize (ie. as Explicit, Implicit, or
Tacit) and retain knowledge, and apply said knowledge to gain a progressively better
organizational memory, and competitive advantage.
CHAPTER 2
THEORY AND RELATED RESEARCH
Here, we look at the theories and key concepts of HRM and KM, make reference to some existing research works that
relate to them, and seek to understand how KM is supported by HRM processes, and or vice versa,
in helping organizations realize their goals, and gain competitive advantage as previously
mentioned in the framework. It is vital to point out that companies need to be able to identify what
they are better at compared to their competitors, and then build on that to maintain their edge or
advantage over their competitors. However, this does not happen in a vacuum but through creating
and or harnessing advantages in their products, intellectual capital or knowledge assets, processes
that are both external and within the entity, and definitely in their human resource management
practices or policies.
Competitive Advantage: What is it?
Also called the “First mover advantage”, and firstly coined by Michael E. Porter,
competitive advantage is the edge or advantage companies have over their rivals in
their ability to generate greater value for themselves, and their shareholders. This
means a company should know what it is best at doing and focus on being the best
at doing that in order to remain ahead of its competitors.
See Figure 1.1 Dummies.Com below, for a look at a simple formula for competitive
advantage with a list of a few companies as examples.
Gaining competitive advantage requires careful research of the things your
competitor may be doing, doing those things better, and r because by knowing these
things, organizations have the advantage in the sense that they can fine tune those
things or even do them better to attract customers. Some key tips for obtaining
competitive advantage as discussed below:
Online Search Visibility
Do an online search to determine who your online competitors are, and how
they fare online in terms of the weight of their online presence, and how
consistently and easily visible they may be. By doing this, you may be able to
see how well you measure up against them. By knowing the things they are
doing well in order to compete with you, you get the data you need to enable
you make adjustments and improve more.
Develop and Market your content
With top keywords handy, organizations can then start to develop their
content marketing strategy around such keywords; content that should be
valuable, relevant, and consistent so as to attract the targeted market or
consumer base.
Social Media Activity and Success
Investigating or researching the social media websites or networks that your
competitors have more activity on, will show you which social media
network, and the type of content that may be claiming the most attention
amongst your target audience. Again, with this information handy, you have
the advantage to ameliorate what your competitors may be doing in order to
kick ahead of the competition they protrude.
Top Performing Keywords
By identifying the keywords that help your competitors rank better when they
are searched, you can amass or create a list of such keywords as well, try
adding more top keywords your competitors may not have, in order to perform
better than them, and hence, reach a larger target audience.
It is worth noting that all of this requires knowledge in order for implementation to
be successful because without the required knowledge, none of the aforementioned
tips will be successful. Therefore, competitive advantage cannot be attained in the
absence of the requisite knowledge to drive it.
HRM and Competitive Advantage
From several existing studies, we find that HRM practices, if effectively applied, do help
companies or organizations gain competitive advantage. Some of those practices may include
hiring or recruiting personnel with the desired experience, motivation of them by offering
competitive salaries and rewards as well as recognizing their achievements, offering them effective
training, etc. All of these factors or elements, either directly or indirectly confront the strengths
and weaknesses, and the opportunities and threats scenario about the company, firm, or entity.
When a company knows its strengths and weaknesses, and the opportunities and threats that
confronts it, such information enables it (ie. the firm) to know the types of personnel to recruit;;
personnel that may be well fit or placed to perform accordingly, thereby improving the company
by strengthening it further; making it a better competitor.
Figure 1.1
Organizational
Capabilities
Environmental
Conditions
Strengths and
weaknesses
Opportunities and
threats
Strategic human
resource
management
Additionally, by observing and recording the organizational capabilities in terms of employees
strengths and weaknesses, and the environmental conditions in terms of the opportunities and
threats to the organization, effective human resource management may help organizations become
more competitive by addressing those strengths and weaknesses, and opportunities and threats; in
other words, by doing a SWOT analysis, human resource management can lead to competitive
advantage.
http://smallbusiness.chron.com/can-hr-become-competitive-advantage-organization-50913.html
Also, owing to how rapidly environments are becoming more dynamic, “a strategically minded
HR department may craft jobs, form networks among people, and provide training to make
everyone in the organization become part of its innovation engine”- Havard Business Review
(https://hbr.org/2008/06/connecting-hr-with-competitive)
Competitive Pay Practice as a contributor to Competitive Advantage
When people are paid equally as those that are their competitors or even better, they tend to be
hugely motivated to perform better. This tendency by employees to perform better, triggered by
competitive or better salaries, may seem to contribute by giving their organizations or companies
a competitive edge, or competitive advantage. However, it is to be noted, that the strategy does not
work such that companies or organizations pay each of their employees the same or better salaries
than their competitors at the same job levels but rather, that they focus on the strategic approaches
below to build their competitive advantage.
1. Set themselves at a higher level or position than the median range on the pay market. This
approach is mainly or most commonly the competitive advantage strategy used by smaller
firms who have to compete with larger ones of the same industry for the best out there. By
setting their pay scale higher than the pay market rate, firms become more attractive to the
best talents that may be seeking, and available for hire, and by hiring them, they hire
productive individuals who will contribute to the productivity of the firm, and give them
the competitive edge.
On the other hand, it is vital to note that setting the bar too high above the pay market rate
is a very high risk undertaking and companies have to be very careful doing this because
by doing so, firms will have to underwrite the increments in the costs and this takes away
from the margins gained on products and or services. When this happens, firms cannot
adjust fast enough and this downward trend negatively affects the firm in terms of the high
cost levels it require to keep the process operational. In other words, while the firm
struggles to manage adjustments to such high pay market position costs, its competitors
with lower pay market potions will have a large operating gap to decrease the same costs;
thereby taking back the competitive advantage from the high pay market position firms.
2. Competitive Pay Market position for strategic job positions
What this means is that firms identify their key or strategic positions, and then set the
competitive pay for those positions whilst at the same time keeping their other employees
within, or sometimes even bit below the median of the pay market. This approach is the
cheaper of the two approaches. However, it is indeed vital that firms ensure that in order
to avoid conflict internally, they reach an agreement regarding what they identify as their
key or strategic positions for which they may set the competitive pay higher in their drive
to establish a competitive advantage. This can be a effort draining undertaking for human
resource departments because sometimes the hierarchy of the organization, or top
management may not want to approve such proposals and this may result into prolonged
discussions as they (ie. top management) seek to clearly understand the merits and demerits
relative to its financial implications to the company.
Effective Conflict Management as a contributor to Competitive Advantage
To begin with, let us kick out the connotation that conflict is always a bad or counterproductive
thing because it is not always so. So, what is conflict then? Let us look at the definition by
dictionary.com; “a state of opposition between ideas, interests, etc; disagreement or controversy -
http://www.dictionary.com/browse/conflict.
There are some key words that stick out from this definition (ie. opposition, ideas, interests,
disagreement).
It is worth noting that conflict is an evitable phenomenon and as such, companies, and individuals
alike, cannot avoid it but rather develop strategies to be able to handle it whenever it occurs.
However, as initially purported, that conflict is not always a bad thing in the workplace, let us now
validate that statement.
Within a workplace environment, whenever conflict occurs, it exposes the dissatisfaction of
conflicting parties (ie. employees involved in the conflict), dissatisfactions that may be based on
their opposition to how others categorize or critique their performance, on how certain actions by
other workmates negatively impact or sabotage their interests at the workplace, etc., the causes for
those dissatisfactions, and then suggests ways and means for not only resolving them, but also
preventing them from reoccurring. Therefore, by not talking about conflict and welcoming them
in a positive way, companies may be missing out on potential opportunities that may well bring
about positive change. However, by accepting that conflict is inevitable, companies see the value
it brings in exposing the ills in the workplace, and they become better conflict resolvers thereby
helping build teamwork amongst staff members which enhances better productivity that make
them competitive.
Smart Recruitment as a contributor to competitive advantage
When we think about recruitment, I would like to start with the words “talent acquisition” because
it makes understanding recruitment much easier.
Human resource managers and their supporting staff are flooded consistently with job applications
from so many different people from different cultural and social orientations, work experiences,
ideologies, expectations, motivations and the list goes on and on. The task of sifting through all of
those applications and the relative profiles that they contain in order to acquire the right talent that
fits the job and may potentially add the giving the company a competitive lead, can be truly
daunting to put it mildly. This is so because recruiting or acquiring the wrong talent or individual
may cost the company a lot more than they would have foreshadowed. Because of this, it is
extremely important that human resource managers get it right the first time and getting it right the
first time requires that several questions be answered; some of which are as below:
1. Does the talent to be recruited or acquired fit the culture of the organization?
2. Why did the person leave their previous job?
3. What would they say is their biggest weakness, and why?
4. Have they been criminally apprehended even if for a minor reason and what was the
reason?
5. How long do you they intend working with your firm?
6. What is their salary expectation?
7. How do they handle conflict?
In other words, their approach to recruiting people should be strategic; not just because a position
needs to be filled.
In order to get it right the first time, organizations must develop a strategy or set of strategies to
achieve the desired outcome.
Training (Employees Development) as a contributor to Competitive Advantage
Talent management, employees development, however you may choose to refer to it, workplace
training is one of the best ways to achieve real competitive advantages on so many levels that a
firm may be able to compete. Training contributes the human capital of firms and this is definitely
needed because it is people that ultimately have to apply their skills, using resources made
available to them in order for them, in their efforts to make the entities competitive. In other words,
it is people that compete; hence those people must be consistently trained in order to keep being
competitive.
Additionally, properly trained employees immensely contribute to the competitive nature of their
establishments because training builds up so many values within organizations; some of those
values are:
1. It builds communication skills – when people are well trained, it helps them communicate
better within the language of their discipline and this in turn helps the receiver understand
because the transmitter would have been well equipped to ensure the message gets through
be ensuring it is clear, and easy to understand by the receiver. However, it should also be
noted that because communication is not a one way process, the transmitter of the message
must always look out for feedbacks relative to whatever he communicates and then analyze
the feedback, decode it, and then either change or improve aspects of the message
previously communicated. This process can easily be understood by looking at the diagram
of the communication cycle below:
Figure 1.2
1. Before communicating a message, the “Aim”, or purpose of the message has to be
clarified or made very clear so that the receiver understand and acts or responds
accordingly. However, without the proper training, communicating messages within
respect disciplines can be a difficult task, especially when communicating to others
that are or may not be as trained and versed in said discipline.
2. Encoding or composing a message also requires anticipating the possible hurdles that
the receiver may encounter, and then composing the message in a way that avoids or
limits such hurdles for the receiver. Such a foresight requires experience that may
come from trained personnel, and may differ relative to different positions and also
job descriptions.
3. Transmitting then takes place because the sender, a trained employees is not
confident that the message will be well receive and clearly understood.
4. Receiving Feedback then becomes a necessity as the sender must check for any issues
that may confront the receiver, in order to be ready to clarify those issues further.
5. Analyzing or decoding the issues should be the next step if there are any issues found
6. Finally, the sender, must be able to either change elements within the message oor
improve them; this comes with training and experience and again, the approach
differs relative to different disciplines and the training gained or that should be gained
in those disciplines.
So, as described above, the communication process does not happen in a vacuum but rather
comes with training and experience over time.
It is worth articulating, that when employees are well trained, they are able to serve their
customers better, use their skills to be innovative, and in some instances, use the ethics of their
training to avoid conflicts or manage situations that may have the potential to bring about
conflict within the workplace. Therefore, those virtues; better customer support or service,
innovation, and conflict management, all contribute towards the competitiveness of the firm or
organization as a result of having well trained employees. As it is generally stated, that
“employees are the greatest assets of a company”, the statement can be qualified to add that this
is mostly true for companies that provide consistent training for the employees especially for an
aging employee population that may soon have to be replaced.
The bottom line here, as has been implicitly mentioned, is that companies have to realize that
rather than simply using the internet or other media to occasionally show people how to do
certain things, they need to look at the bigger picture of identifying the capabilities they have,
and how to harvest those capabilities at an organizational level in order to remain competitive, or
lead the competition because offering effective, and continuous training for employees
establishes the link between organizational capabilities, and the outcomes businesses desire or
anticipate. However, again, this does not happen in a vacuum but it is about how businesses
empower people by the training they offer them, and how knowledge obtained is utilized to
enhance organizational competitiveness. Therefore, training is about improving knowledge but
even more about how such knowledge is successfully transferred for the good of the company or
organization.
Knowledge Management (KM) and Competitive Advantage
As most assets are bedrocks that lead to the revenue generating capacity of firms, and are treated
carefully and attentively, the knowledge within a firm should be treated likewise; if not better. It
is increasingly becoming evident that the intellectual capital and or knowledge in the heads of
employees make them extremely valuable such that firms fear losing them because losing them,
means losing knowledge; and said knowledge may be hired by a potential competitor at the
detriment of the company; a detriment that may translate to lost market share and client base.
As stated by the authors Erickson, G.S. & Rothberg, H.N. (2000) in their journal
“INTELLECUTAL CAPITAL AND COMPETITIVENESS: GUIDELINES FOR
POLICY", Competitiveness Review: An International Business Journal, Vol. 10 Iss: 2, pp.192 -
198”, “Whether termed intellectual capital, knowledge management, or something else, the
practice of managing an institution's knowledge base has received increasing attention in recent
years. After some of the highly publicized downsizings of the late eighties and early nineties, a
number of organizations discovered that an enormous amount of institutional memory and unique
knowledge was walking out the door with exiting employees. Further, the nineties have seen
tremendous growth in firms with few assets besides what is between the ears (ie. in the heads) of
some of their key people. Both trends have focused managers on knowledge as an asset of the firm,
to be developed and managed in the same manner as more traditional assets”. By using knowledge
as assets, firms or organizations are able to leverage the knowledge in the firm to their advantage;
something that can be done via a systemic, and careful review, analysis, and optimization of the
knowledge circulating within the firm.
Knowledge Audit as a contributor to Competitive Advantage
One of the meanings of the word “audit” is “the official examination or inspection of an individual
or organization’s account, typically by an independent body”. However, in terms of knowledge
management, knowledge audit has to do with the efforts by organizations relative to how they
identify knowledge gaps within the organization, and how they management those knowledge
assets in order to secure a competitive advantage.
For us to be very clear, knowledge assets are compiled documents that contain a structured, and
proven blueprint relative to specialized areas of practice within organizations. However, I will like
to add to this definition by saying that knowledgeable employees possessing strategically critical
skills set that enables organizations to compete, are also knowledge assets because losing such
employees, especially to a competitor, impacts the competitiveness or the losing organization.
Therefore, in order to successfully audit an organization, knowledge auditors must not only audit
the knowledge bank or repository exist in explicit form, but they must also audit the skill or
knowledge level of existing employees in order to determine how progressive the knowledge may
have developed over time, what knowledge they lack, inform management, who will then have the
responsibility to guard against being competitively weak by offering to provide the lacked
knowledge set for such employees. To help explain this concept, I created a conceptual framework
as shown below:
Figure 1.3
The figure above basically means that the knowledge base and skilled or knowledgeable
employees within organizations should be audited periodically in order to determine the gaps in
firm’s knowledge. This process may or should differ from one organization to another because
different organizations have a different number, and category of people they think are those
strategically placed, and must therefore be audited because of the crucial nature of their position,
and how may it impact the firm’s competitive advantage. It is within this capacity that knowledge
audit functions as a contributor to helping organizations gain a competitive edge.
Questions organizations should expect to be asked by knowledge auditors
When an organization is serious about getting ahead of the competition, as already stated, it should
invite knowledge auditors to audit it, and be ready and willing to answer several questions but
especially the four basic knowledge management questions below:
The “We” in the questions refers to the company or organization.
1. What do we know we know?
This question seeks to know the level of knowledge the company has both in the heads of
its employees (ie. tacit knowledge), and in written form (explicit knowledge). I like to
relate this to the SWOT analysis, where the “S or Strength” component in SWOT
Knowledge Base
(ie. skilled employees) Knowledge Audit as a coontributor Competitive Advantage
somehow speaks to the strength of the organization because they know what they know
and it is a strength in itself.
2. What do we know we don’t know?
This question relates to knowledge that the company knows she does not have. In other
words, companies get to know there are things they don’t know by doing a knowledge
audit in order to get to know those things or identify the knowledge gaps. Relating this to
the SWOT analysis, we may consider this a weakness that the company needs to work on
in order to be able to accomplish its goals; hence the “W or Weakness” in SWOT
because now the company knows what (knowledge or skill sets) she does not know.
3. What don’t we know we know?
This question seeks to answer the fact that there may be knowledge in the company that
may be needed but the company just does not know that she has such knowledge. This is
a hidden asset because getting to know what we don’t know provides us the opportunity
expand our knowledge database. Therefore, this, relative to the SWOT analysis can
represent the “O or Opportunity” component in the SWOT analysis because now the
company has the opportunity to find, and probably utilize knowledge or skill sets she did
not know she had.
4. What don’t we know we don’t know?
Now, here is the one that turn heads. Let me ask the same question another way; like this
- What do we not know we do not know? Catch their drift? Head spinning? Take a deeper
breathe and settle down slowly. We can best understand this by thinking in terms of
preparing for the unforeseen. For example, we do not know that our competitors are
investing in acquiring the best KM advisers in order to improve their customers support
services which may well lead to their dominance in the market in which we are all
competing; hence giving them a competitive advantage. Therefore, because we do not
know this, it is definitely a threat to us because it gives our competitor an advantage over
us; an advantage that we are oblivious to because we did not even ask ourselves this
question. Again, relating this to the SWOT analysis, we can map this to the “T” in SWOT
because it is a treat to us that we don’t know something, and we don’t that we don’t know
it; I am confident you are not losing your head now.
From the above expose, we can see how vital knowledge audit is in helping organizations gain
competitive advantage and because of this essence, it is prudent that companies that did not
think about knowledge management start doing so because it will truly prove worthwhile.
Technology as a contributor to Competitive Advantage
As mentioned in my introduction, in this information and communication age, we are beset from
all angles by the need to use technology to enable us reach our customers or target market, and
other audiences that we would not have reached within so short a time had it not been for the
availability of the technology we have at our disposal now.
Assume for a moment that two competing businesses or companies (ie. Company A and Company
B) are situated in an area without easy access to transportation or Banks. However, Company B
does have internet access and owns a website while company A depends mainly on verbal
communication via phones or face to face salesmanship. Company B will be able to reach a larger
audience, have them make purchases online via her online payment gateway on her website. By
doing so, company B has a higher probability to make sales than company A. This means that
company B have an advantage over company A and we call this advantage the competitive
advantage.
How information is digitized, and managed has a big say in how competitive organizations may
be because it is fast becoming a fact that organizations can no longer heavily rely on intuition,
experience, etc.; vital aspect they are indeed, but information being what it is in terms of its
complexity at times, and mainly in terms of its value, cannot be effectively managed without
digitization and digitized processes; processes that are functional outputs of technology. A good
example of how technology helps make companies competitive is the use of customer relationship
management software or CRMS which has gained huge acclaimed across businesses the world
over.
Let’s remember that businesses exist because of the audience they target; in other words,
customers. Therefore, heeding and being truly attentive to customer needs is a prime factors if
organizations intend to remain competitive or better still, lead the competition they are bound to
be confronted by.
A company that has a poor customer rating has no good chance being a better competitor than one
that has happy customers who may most probably be more than willing to recommend them to
other potential customers, there by extending their customer base, and consequently, improving
their market share.
The more technologically capable an organization is, the more competitive it becomes. However,
it should be noted that technology does not work in isolation of the required know-how by people
who operate or utilize it. As argued by Leif Edvinsoon (2002), that the actual assets of an
organization is the skill sets or knowledge of its employees; technology only helps the process.
Helping the process, in a very big and crucial way, technology adds speed and quality to the
execution of duties; hence, making the organization more effective and competitive.
Even though not all technological change positively impact an organization, the overall value of,
deployment, and use of modern technology, open up doors for innovations and more innovations
help organization become even more competitive.
Knowledge creation, and sharing as contributors to Competitive Advantage
The something new, and of good value is created, it is admired by others. Think about when the
first telephone was made by Alexander Graham bell, or when the first car was made; imagine the
thrill such inventions made. Similarly, when new knowledge is created, and proven to be of value,
it creates its own buzz, and threatens competition from competitors within related industries, and
instantly helps give the owner of the created knowledge, an advantage over her competitors.
Additionally, what good is knowledge (existing or newly created) if it is not shared for the greater
good of a company? The Prophet Muhammad (pbuh) of Islam, it is reported, said “Acquire
knowledge, and impart it to the people” - Sunan Tirmidhi, Hadith 107. So the essence of sharing
knowledge is not a new thing. The sharing of acquired knowledge is very important. From the
deliberations above, we can see that it is essential for organizations, businesses, or companies to
invest in the process of creating new knowledge, improving on existing knowledge, and in the
sharing of said knowledge so that it becomes more competitive because its intellectual capital
would have been improved in the process; thereby making the more competitive.
A good way to help explain the process of creating knowledge, is the SECI Model; a model
authored by the Japanese authors Ikujiro Nonaka &. Hirotaka Takeuch, in their book, “The
Knowledge Creating Company”. Before digging deeper into how knowledge creation and sharing
contribute towards competitive advantage, let us look at the knowledge creation process, in order
to see how knowledge is created, and then shared, why it should be shared, and what happens when
it is shared effectively within an organization.
Let it be noted that knowledge refers to both written, and intangible knowledge (ie. knowledge in
the heads of employees).
The Knowledge Creation Process – The SECI Model
Nonaka argued that as opposed to the general view that knowledge is just a part of many factors
that help make a company or business more competitive, knowledge it actually the primary
source that drives a company’s competitive advantage for the long run. It is via this thought
process that he classified the four dimensions which he referred to as SECI as listed below:
a. Socialization,
b. Externalization
c. Combination
d. Internalization.
SECI MODEL
This model was introduced in 1996 after extensive work about explicit and tacit knowledge. The
concept captured the attention of the western world who, according to Nonaka, were more focus
on the explicit, written or codified form of knowledge. He argued that despite the value of
explicit management of knowledge, organizations should also focus on the managing the tacit
knowledge aspect of managing the skills set in the heads of their employees.
A good way to start explaining this model is to firstly decipher the acronym SECI. In the
acronym SECI, the “S” stands for Socialization, the “E” for Externalization, the “C” for
Combination, and the “I” for Internalization.
Knowledge can be created, exchanged through social interactions with others either at a party,
picnic, conference, etc. and then possibly written down or recorded for storage, or externalized
so that it can be retrieved and reviewed at a later date as may be necessary, then combined with
other documented or recorded explicit knowledge, thereby creating more explicit knowledge,
and then internalized or absorbed or studied; hence transforming the explicit or documented
knowledge into tacit knowledge(ie. knowledge that is learned and stored in the head/mind).
This is just a simplified example aimed at helping you fathom the process as there may be more
complex examples depending on the nature of the organization involved, and the type of
business or information exchange they may be restricted to.
Whatever the situation, the bottom line is that knowledge is created in a variety of way, and that
this model helps organization understand some of those ways by conceptualizing the process
which in cases may vary a bit as it is all not engraved in stone because markets are dynamic and
so too are organizations who must consistently be able to adapt to such dynamism in order to
remain competitive.
The conceptual diagram below shows, with short examples, each phase of this process and the
type of knowledge (ie. Tacit or Explicit) that is created, and how it is then transformed or
transferred into another type or form of knowledge through Socialization, Externalization,
Combination, and Internalization.
Figure 1.4
To begin with, let us define what tacit and explicit knowledge are.
Tacit knowledge is the type of knowledge that is not easy to explain. It is intuitive knowledge
that has its foundation in experience, practice, values, etc.; it is contextual as well.
Explicit knowledge, on the other hand, is easier to record, explain, edit and retrieve. The model
shows the various dimensions of knowledge, how those dimensions are interrelated, transferred
or converted, and how they function in the creation of knowledge; in this context, within an
organization.
Below are brief explanations of each phase:
TACIT TO TACIT or (Socialization Phase)
Knowledge here is mostly shared through social interactions like focused group meetings,
meeting of people sharing similar or the same interests, wherein they explain or exchange
concepts or ideas that are not explicit or written down already. Some examples of tacit
knowledge are body language, emotional intelligence, leadership, etc. These are skills that are
difficult to teach, because they mostly come with experience, context, and practice; they cannot
be thought explicitly.
TACIT TO EXPLICIT (Externalization Phase)
Here, the idea is that knowledge in the heads of people (i. tacit knowledge) is transferred, and
recorded or codified. Codification is the process of preserving knowledge by writing it down. As
illustrated in the example, teaching Math to someone, a teacher will explain the concepts from
his head and the student writes it down in a note book, or codifies it.
EXPLICIT TO EXPLICIT or (Combination Phase)
This occurs when codified or written volumes of knowledge are compiled to create a wholesome,
better, or new knowledge. Again, as shown in Figure 1.3 above, a good example is the process
through which population census is done. In order to get a realistic information from a
population census, bits of recorded or codified information are compiled, categorized, analyzed,
and finally stored for future references. With this type of knowledge transfer or sharing,
knowledge is easier to store, retrieve, edit, and even, if deemed expedient, discard. Explicit to
explicit learning is the easiest of the mentioned four in the figure above.
EXPLICIT TO TACIT (Internalization Phase)
This aspect of knowledge transfer requires the retention of explicit knowledge in the heads or
minds of employees. In other words, people learn from written information, and try to remember
such information such that it becomes a part of their accumulated knowledge over time. This can
also be seen from the point that an employee who knows something, records it, and another finds
the recorded information, and studies to remember it.
We may refer to this aspect as best described as a teacher and apprentice relationship wherein the
teacher teaches his apprentice the intricate knowledge from his experience; not from explicit
information.
It is vital for organizations to have a good understanding of this because it surely helps in the
improvement of the human capital of the organization at all levels.
Think for a moment, about a snowball; it gets bigger as it rolls around because more snow is
attached to it. By comparing a snowball to the level of knowledge in an organization, we see that
once knowledge is created, and shared, rot when existing knowledge is shared effectively within
an organization, the volume of knowledgeable people, and knowledge itself, starts to increase;
hence, making the company more and more a member of the knowledge economy, and a strong
competitor. The knowledge ball is created as a result of this, and because people and situation
change and constantly improve, the knowledge will keep rolling and growing as more knowledge
is created.
Consequently, we must be careful about the snowball analogy because sometimes snow melts.
Therefore, we must qualify the analogy by arguing that there is a equal reaction in terms of
knowledge that is not properly and or correctly shared. In other words, when knowledge is shared
wrongly, people learn the wrong things, and this may negatively contribute by negatively
impacting the competitive nature of the business, and its bottom line; hence we can relate this to
the analogy that the snowball (knowledge ball) is melting. Another way that knowledge may not
be shared, or according to the analogy, the knowledge ball may start to melt, is when
knowledgeable employees quit because by quitting, they take along their tacit knowledge;
something which greatly impacts a company’s competitive edge especially if such employees was
a key knowledge asset.
I call it the knowledge ball because knowledge is like a snow ball that keeps getting bigger and
bigger, every time as new spheres of ideas and innovations are encountered.
It is worth noting that a snowball may also melt depending on the environmental conditions.
After all of this, the question thus arises; shouldn’t created knowledge be managed? If so, how?
To answer this question, KM or knowledge management systems must step up. It is the KM
systems that help manage created knowledge for organizations or that should do so.
Organizations will have to create a KM system that is unique to them. However, below are a few
steps that may help them do so:
1. There must be a consensus, and a commitment by all participants in the creation ot the
KM system.
2. Compilation of all existing materials vital to the system (ie. documents, reports, data,
etc.)
3. Assembling the right tools and methodology to execute the process; tools like KM
software, CRMS software, etc
4. Sharing
After input, there has to be an output for all the work and this output will be additional
knowledge or new knowledge to the organization; knowledge that must be shared
accordingly and effectively.
All of the above creates a cycle that the organization may use as her knowledge management
system. However, it is subject to change and adjustments over time because there will be pats of
the cycle that may be affected over time, and for better results, firm may hire the services of
knowledge auditors to help them do a more expert knowledge audit.
Knowledge Audit
A process that attempts to determine where an organization stands in terms of its knowledge, and
knowledge assets.
One may think of a knowledge audit in terms of preparing for an exam. In order to ensure you
are truly ready for the exam (competition with other students also taking it), you review your
notes (a form of knowledge audit), and then identify the topics (get an inventory of areas you
need to read more), and then actually read or focus on those topics. Think of yourself as the
company, your notebooks as your employees, and your lessons or notes as your knowledge
assets or inventory. So, after reviewing or auditing your notebooks, you get to know what you
know and what you don’t know and this places you in a position to improve on the topics you
have not got a clear hold on, or improve on those you are weak on. Doing this will certainly give
you an advantage over other students who may fail to do so; it makes you more knowledgeable,
and competitive.
It is important to note that organizations cannot actually leverage to their advantages without
having to know what their knowledge assets are.
So what are knowledge assets then? According to the business dictionary dot com, it is
“Intellectual capital asset such as a copyright or patent that does or can generate income.” -
http://www.businessdictionary.com/definition/knowledge-asset.html
Intellectual capital is a composite terminology that constitutes human capital, relational capital,
and structural capital; all of which contribute to the competitiveness or organizations.
Human capital refers to the measure of the economic value of employee’s skills sets within the
organization they may work for.
Relational capital refers to the inherent value an organization has, or should have, relative to its
relationships with its customers, vendors, etc. Such valuable relationships definitely contribute to
how well the organization measures up to its competition in the eyes of those customers,
vendors, etc.
Structural capital refers to the platform upon which human capital functions. It constitutes the
physical or tangible assets like infrastructures that supports all of the processes that are required
for use by human capital. It is that part of intellectual property that remains even after people
leaving the organization.
Therefore, the first step before conducting a knowledge audit or assessment, is for organizations
to identify the knowledge assets it has to its disposal because by doing so, the knowledge audit
process is enhanced accordingly.
Figure 1.5
INTELLECTUAL PROPERTY
Human Capital
Employees skills sets-
the valuable knowledge
in the heads of
employees.
Relational Capital
Relationships
customers, vendors, etc
Structural Capital
Everything that remains
when people leave the
organization – buildings,
computers, etc
Why is it vital?
There are a plethora of reasons why knowledge audit is important, and some of those are as
below:
It helps ensure productivity in an organization
When a knowledge audit is done, the organization gets to know the areas it needs to improve,
and starts making efforts to improve those areas. In most instances, training is offered to improve
the weak areas and this adds to the intellectual capital, specifically, human capital of the
company, and hence its productivity because when people become more knowledgeable, they are
able to perform well (become productive enough) and this contributes to the overall productivity
of the company they work for.
Identifies areas where there are knowledge gaps
It is always helpful to know where there are gaps relative to what should be known, and why
those gaps should not exist and conducting a knowledge audit is a good way of knowing.
Accordingly to a report published in the Business Insider, “a nagging skills gap” is the reason
why there is a growing gap between the number of available jobs and the number of hires.
Please refer to the figure below from the Business Insider:
Figure 1.4
The figure above shows a steady 20% increase in the number of job openings while the number
of hires barely keeps up and according to the research, a gap in the skills required to fill those job
openings is a major cause or factor.
To quantify the information further, as depicted in the chart, for every 140 jobs, only about 50 of
those jobs are taken while 99 of them remain vacant due to the lack of required knowledge.
Hence, when a firm is audited, they see where the gaps are, and are then well placed to work on
closing them.
It shores up redundant knowledge
Not only does a knowledge audit of a firm shore up the gaps in knowledge, it also shows where
redundant knowledge lies around within the firm.
Knowledge vital indeed but sometimes firms, organization, or companies only need the
knowledge that are necessary for them. In other words, firms have to be careful of being
overloaded by knowledge; too much knowledge that is not needed. Relative to this, an audit of
the knowledge assets or inventory of a firm helps it unearth such redundant knowledge, and in
the process, create space for fresh knowledge that aligns with the objectives of the firm.
Suggests improvements to core competencies
Knowledge audit usually results in putting an organization in a position where it, after knowing
what it knows, and doesn’t know, improves on its existing knowledge and core strengths, and
setup policies or strategies (the concept of a learning organization echoes here), in order to create
new knowledge.
When an organization knows, after a knowledge audit, it’s knowledge inventory, it will then be
able to see its progress levels relative to its strengths, and then specifically focus on, or prioritize
improvements on those skills or knowledge areas that make it stronger, as a way to strategically
advance itself. In other words, knowledge the levels of its core competencies helps help an
organization take steps to help that may help it gain competitive advantage or fine-tune or tighten
up the competitive advantage it may already have.
Relative Human Resource to Knowledge Management Concepts
Primarily, this is about the management of people within organizations relative to how their
knowledge may contribute to the overall strategic advantage of the organization they work for.
This is not only about how they fit into the system, or how they are expected to conform to the
organization’s policies or culture but also about the effective procedures of recruiting the
potentially right (job-fit) employees, hiring them, training them, compensating them, appraising
them, and retaining them as may be deemed expedient over time. The above human resource
concepts all fit the human capital category. Hence, we can argue that both knowledge
management, and human resource management complement each other in the sense that they
both deal with employee management, and that there is a window to integrate them both.
In order to have a successful knowledge management system, there has to be a successful human
resource management system. Why? Because knowledge reside within people who, by nature,
are dynamic, and such dynamism maybe affected by motivation, emotions (good or bad
depending on situations), etc. In other words, because people are dynamic things like emotions,
conflicts, etc., may hinder their drive to share knowledge effectively, or even perform well.
Below is a diagrammatic or conceptual map of how those variables interrelate.
From the diagram, we can see that human resource practices help knowledge management and
vice versa. For example, companies want to hire individuals that have the right skills that fit the
job profiles they seek. This means that they look for people with the knowledge required to
execute the duties as required for the job offered. Here, we see that knowledge is a crucial part of
the decision making process. Additionally, despite having the knowledge, firms may still seek to
look into the human element of the potential employee; things like his job history, personality
type, criminal background etc., amongst other things. Therefore, the final decision about
whether or not to hire, is combination of factors that consider knowledge and human resource
elements of the potential employee.
A look at recognition and rewards also support the idea that when people are recognized and
rewarded for their performances, they tend to be motivated and then apply themselves (their
knowledge/ knowledge application) even more, to the benefit of the company.
CHAPTER 3
METHODOLOGY (The Why? How? and What?)
This research has to do with investigating how HRM and KM complement each other in helping
organizations gain competitive advantage. In this framework, the paper looks at the HRM
practices such as competitive pay practices, conflict management, smart recruitment and conflict
management strategies, and the KM concepts of knowledge audits, technology, knowledge
sharing, and knowledge retention, and extract supporting theories from existing theoretical work
on the subject. After doing so, a conceptual framework is formulated as an extraction of existing
theoretical framework on the topic, this serves as the basis that guides through the rest of the
research process.
The research method used here is qualitative; meaning, we qualify, not quantify, data generated
from questionnaires (ie. manual and online), interviews, emails, etc., with managers, and
company/business employees alike.
Qualitative research is “a strategy for systematic collection, organization, and interpretation of
textual information”. It is strategic because a thought process is given to it; it is a product of careful
thinking which includes careful steps to achieve a goal. It is systematic because it follows a set of
well-defined methodologies for collecting, organizing, and interpretation of qualitative data.
This method is appropriate to use because after being granted permission form companies or
organizational heads, in some cases, it enables us to easily confront managers, supervisors,
department heads, and employees who have a good experience working within organizations, and
who may tend to provide reliable answers to the research questions.
This method deals with, and analyzes information, gathered using those questionnaires, emails,
etc.; all of which draw on facts, and related theories.
A qualitative research method is used for this research because it has to do with generating,
classifying, and analyzing non-numeric data.
Conversely, a quantitative research is best suited for numeric data which is mostly objective rather
than subjective as in a qualitative research.
Also, because we are making predictions based on the data analysis which is a result of the
relationships between the variables, we tend to give more weight the regression analysis which is
best suited for qualitative research given that is does not only look at the relationship between
variables, but also predict results based on the value of one variable given that the other variable
is known. It is not quantitatively definitive because it is subjective; meaning that whereas
recruitment by lead to competitive advantage for some companies, it may not for some other
companies.
The conclusion and recommendation comes about as a result of the facts and findings from of the
data analysis which provides answers to the research questions, and how companies or businesses
handle relate to them.
By analyzing the relationships between the dependent and independent variables in terms of the
correlation and regression results or findings between them, we deduce to either accept or reject
our null or alternate hypothesis. In other words, our conclusion is based on the results of our data
analysis, it is also upon those analysis that we make or propose recommendations that we believe
may help drive organizations or companies towards gaining competitive advantage if they do apply
the concepts herein appropriately, and with commitment.
CHAPTER 4
FACTS AND FINDINGS
From the research, below are the test results of the hypothesis purported.
However, because this is a qualitative research, we tilt more toward a regression analysis because
the data analysis for qualitative research is not purely quantitative or cannot effectively be
quantified.
Regression Analysis
This is an analysis that does not only deal with the relationship between two variables, but also
goes on to predict the value of one variable given that we know the value of the other variable to
be analyzed along with it whereby the answer to the question of how accurate the predict will be,
depends on the strength of the correlation between the two variables.
Regression analysis for the Human Resource set of Independent Variables
(Pay, Conflict Management, Recruitment, and Training)
Below are the correlation analysis results of findings of the four independent variables under the
HR component of the research which compliments the KM component in helping companies gain
competitive advantage.
Regression Analysis between Competitive Pay and Competitive Advantage
Below is a scatter plot graph of the regression analysis, between the two variables specified.
It shows that there is a relationship between the variables, but it also predicts the value of one of
the variables relative to the other variable as it attempts to answer the question of how accurate
such a prediction may be.
It is important to note that from lower left to upper right, there is a sort of straight line which
indicates that there is a positive linear correlation or relationship between competitive pay and
competitive advantage. In other words, employees are motivated when they are paid very
competitive salaries of even better then employees of their competitors, and this motivation
translates into high productivity by said employees; something that then translates into giving the
organization a competitive advantage in terms of the high productivity which boosts revenue.
Let us now see the tabular representation of the same two variables:
Here we also same a consistency between the scatter plot and this tabular result. The correlation
coefficient “R” is positive (ie. .015) as indicated by the straight line in the scatter plot.
Regression Analysis between Effective Conflict Management and Competitive Advantage
Below is a scatter plot graph of the regression analysis, between the two variables specified.
This analysis shows that there is not a positive correlation or relationship between conflict
management and competitive advantage as shown in the correlation analysis results as there is no
straight line trend from lower left to upper right.
Please see below, the tabular results of the same variables.
It is vital have a look at the correlation coefficient which is .19 or more than one. This means that
there relation between the variables is not positive but rather negative.
Under the coefficients table, we also see that the negative relationship (ie. -.190) which we already
have mentioned above.
Regression Analysis between Smart Recruitment and Competitive Advantage
Below is a scatter plot graph of the regression analysis, between the two variables specified.
The above scatter plot does show a positive correlation between the specified variables as
indicated by the straight upward line from the lower left to the upper right of the graph.
Below is the tabular repetition of the same two variables.
Under the Coefficients table, we can again see the positive standardized coefficient of 0.088
which is a positive correlation between the two variables.
Regression Analysis between Training and Competitive Advantage
Below is a scatter plot graph of the regression analysis, between the two variables specified.
Here, the graph also shows a positive correlation between the variables and this is also reflected
correctly in the correlation analysis between the two variables.
Below are the regression tables:
Correlation analysis for the Human Resource set of Independent Variables
(Pay, Conflict Management, Recruitment, and Training)
Below are the correlation analysis results of findings of the four independent variables under the
HR component of the research which compliments the KM component in helping companies gain
competitive advantage.
Correlation between Competitive Pay and Competitive Advantage
The correlation analysis above shows that there is a positive correlation between competitive pay
and competitive advantage. In other words, this means that if organizations or companies offer
competitive pay to their employees, those employees tend to be more motivated to work hard or
be more productive and this high level of productivity may lead to competitive advantage.
Correlation between Effective Conflict Management and Competitive Advantage
The correlation analysis here shows that there is a negative correlation between conflict
management and competitive advantage. This means that conflict management does not make a
company competitive or give it competitive advantage over her competitors. However, as a
researcher, I do not necessarily agree with this because being a qualitative research, I would like
to think that there are instances where a company may become more competitive by effectively
managing conflict in the workplace by keeping employees happy; happy people are people that
may work better and enhance teamwork.
Correlation between Smart Recruitment and Competitive Advantage
This correlation analysis shows a strong positive correlation between smart recruitment and
competitive advantage. This means that if organizations recruit smartly, meaning recruit
individuals that have the right experience for a given vacancy, have a positive image and an
exemplary track record as may be confirmed by previous employers, they will be recruiting an
added value to their team and such individuals are bound to help make the organization more
competitive.
Correlation between Training and Competitive Advantage
This correlation analysis shows a very strong positive correlation between training and competitive
advantage. In other words, it means that by providing the right training for employees, companies
become very competitive and tend to gain this advantage over her competitors. When people are
well trained, they have the confidence to work well and to also help others. People always want to
show that they know their job well and therefore acquiring current and updated training skills only
makes them more competitive; something that consequently makes their company also more
competitive.
Regression analysis for the Knowledge Management (KM) set of Independent Variables
(Knowledge Audit, Knowledge Sharing, Technology, and Knowledge Retention)
Regression Analysis between Knowledge Audit and Competitive Advantage
Below is a scatter plot graph of the regression analysis, between the two variables specified.
The scatter plot above does show a positive relationship between knowledge audit and
competitive advantage as show by the straight line trend from the lower left corner to the upper
right corner of the graph.
Please also see below, the regression analysis tables for the relationship between the variables:
Here ae see that there is also a positive relationship between the two variables (ie. .003) as also
shown in the correlation analysis.
Regression Analysis between Technology and Competitive Advantage
Again, we do see a sort of straight line trend from the lower left to the upper left corner of the
graph, and this indicates a positive relationship between the two variables.
In other words, we can predict that technology leads to competitive advantage as is the purpose
of regression analysis; it predicts based on the relationship between the associated variables.
Below is the regression tables showing even more details of the relationship between the
variables:
Regression Analysis between Knowledge Sharing and Competitive Advantage
The scatter plot above does also show a trended straight line from the lower left corner of the graph
to the upper right corner, and this can be interpreted as a positive relationship between the
variables. In other words, sharing knowledge amongst employees help organizations become more
competitive or give them a competitive edge over some of its competitors. Hence, it is advised that
organizations encourage the sharing of knowledge among employees.
Please also see below, the regression tables for this relationship:
There is, as shown above in the tables, a positive relationship between knowledge sharing and
competitive advantage as the figure .048 shows. The means that we can predict that
organizations can gain competitive advantage if they effectively share knowledge among their
employees.
Regression Analysis between Knowledge Retention and Competitive Advantage
Once more, if we look to connect the dots from the lower left to the upper right corner of the
graph above, we will see that it forms a straight line. What this means is that there is a positive
relationship between the two variables analyzed. This is also confirmed in the regression tables
below, as well as the correlation analysis or results for the two variables as shown under the
correlations analysis of the variables.
Below are the regression tables for the relationship between the two variables:
Although weak, we still see that the relationship from the regression tables above, is a positive
relationship. We can predict, even though the prediction is weak, that retaining knowledge helps
organizations compete better, or give them a slight competitive advatange.
Correlation analysis for the Knowledge Management set of Independent Variables
(Knowledge Audit, Technology, Knowledge Sharing, and Knowledge Retention)
Correlation between Knowledge Audit and Competitive Advantage
From the above correlation analysis, we see that there is a high positive correlation between
knowledge audit and competitive advantage. This means that companies gain competitive
advantage when they perform an audit of their knowledge assets which are either explicit or tacit
but usually a combination of both. When knowledge audits are done, knowledge gaps are found,
and this puts the company in a position to start working on closing those knowledge gaps. The
lesser knowledge gaps there are,, the more competitive the company becomes because it means
that the company is progressively learning or getting more useful and applicable knowledge
Correlation between Technology and Competitive Advantage
This above table shows that there is a positive correlation between technology and competitive
advantage. This means that companies become more competitive or gain competitive advantage
if they deploy the right technology in the workplace. This variable is very essential because of
the ever increasing rate at which new technologies are emerging.
It is to be noted, that this works well with the HR component of training because there has to be
well trained employees to operate the right and new technologies that may be required for the
execution of their job.
Correlation between Knowledge Sharing and Competitive Advantage
This analysis shows a positive correlation between knowledge sharing and competitive
advantage which means that companies or organizations gain competitive advantage when they
internal share knowledge effectively and efficiently.
Knowledge shared can be either tacit, explicit or a combination of both.
Sharing knowledge also results in shared intellectual capital, and the power to share knowledge
lies in the hands of employees in terms of their capabilities to actually share knowledge. It is
vital to note that employees’ capabilities are determined not only in their execution of their jobs
or demonstration of their understanding or knowledge areas but also in how well they were
evaluated before being employed. This brings to mind the Human Resource Management aspects
of smart recruitment and training (both independent variables in this research) and
complimenting variables to knowledge management in ensuring organizations gain competitive
advantage.
Correlation between Knowledge Retention and Competitive Advantage
The above correlation analysis also shows a positive correlation between knowledge retention and
competitive advantage; this translates into the assertion that retaining knowledge within
organizations, or when organizations retain knowledge, it makes them more competitive because
it contributes to their knowledge assets, and their relational capital, and its human capital. Again,
the individual or employee is a crucial part in the knowledge retention process because it is the
employees that utilize knowledge or apply knowledge, usually for the overall good of the
organization. Knowledge is internalized by employees and then transferred or shared with others.
In most if not all cases, knowledge is also externalized or written down and stored; it becomes a
part of the organization’s knowledge assets. Such retained knowledge help organizations compete
better because they can retrieve information from it, improve upon it, and apply it accordingly to
their advantage over their competitors who might not be using knowledge as a competitive tool
but rather just the bottom-line or profitability.
Kindly find below, a Pie Chart presentation of the survey questionnaire response results
From the data amassed from respondents to the survey questionnaire, the following hold true:
Findings on the competitive advantage strategy
- That a combined total of 58% (17.2% strongly agreeing and 41.4% agreeing) of the
companies surveyed, have a competitive advantage strategy that is product based; not
knowledge based.
Findings on knowledge sharing strategy
Tacit Explicit
Findings on using technology to help the knowledge management process
Findings on Performing Knowledge Audits
Findings on knowledge retention
Findings on conflict management strategy used
Findings on the provision of training
For employees For department heads / managers only
Findings on having a working recruitment strategy
Findings on performance based on competitive salary
CHAPTER 5
CONCLUSION
Presented in this paper, is a conceptual framework of how knowledge management and human
resource management help organizations or business gain competitive advantage by
complementing each other. Given all of the aforementioned details and statistical data, it is safe to
conclude that, indeed, the application of effective HRM and KM strategies and or practices, does
help a company boost its competitive advantage. Given the results extracted of this research data
analysis, there is strong correlation between the HRM and KM independent variables and positive
regression analysis relationships to competitive advantage. The positive regression analysis means
that we can predict that the independent variables will help organizations or companies gain
competitive advantage. In other words, we reject the null hypothesis, and accept the alternate
hypothesis which hold true that the dependent variable is affected by the independent variables in
such a way that help companies become more competitive. It means that they should do more
knowledge audits, share knowledge more, acquire and utilize the best applicable technology, retain
knowledge, provide competitive pay, and manage workplace conflicts better and as much as may
be feasible. If companies apply effective to the independent variables, we can safely conclude, by
virtue of the research findings, that they will become more competitive than they currently are.
RECOMMENDATION
The world, being as ever progressively competitive as it increasingly is, behooves businesses to
owe it to themselves to prepare for the competition that will always confront them. In this light,
and given the product of this research, it is recommended that companies today seek to learn more
about knowledge management, provide adequate training for their employees in the field of
knowledge management, seek to answer the basic four knowledge management questions, and
merge their HRM and KM strategies in ways that will enable them to compete better than ever
because by doing so, they are strategically poised to understand where they may need to improve
on their management of their employees, how best to motivate them to perform better, where the
knowledge gaps are and what can be done to close those gaps as a step towards making them more
knowledgeable and completive, what best technologies needs to be deployed and what training
programs may be pursued for employees to be able to effectively, and efficiently operate or use
those technologies, etc.
In summary, companies should review their human resource management practices, their
knowledge management practices (if they have one; if not, start investing in one), and find a way
to compliment both to their advantage because it will only make them more competitive.
REFERENCES
Online/Internet Materials:
http://www.kmworld.com/Articles/Editorial/What-Is-.../What-is-KM-Knowledge-Management-
Explained-82405.aspx
How HR help a company become competitive:
http://smallbusiness.chron.com/can-hr-become-competitive-advantage-organization-50913.html
http://www.emeraldinsight.com/doi/abs/10.1108/eb046412
http://www.ibimapublishing.net/journals/CIBIMA/volume7/v7n7.pdf
https://www.psychometrics.com/wp-
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Sunan Tirmidhi, Hadith 107 – On Knowledge Sharing
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BOOKS
In “Figure 10.8” his book, “Knowledge Management; An Integrated Approach”, on page 309
Ashok Jashapara mentioned Stewart’s 1999 “Systematic training cycle” model
Mullin, R. (1996). Knowledge management: A cultural evolution. Journal of Business Strategy,
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Gemma Reucroft, Tim Scott Human Resources: A Practical Guide