IMPACT OF KNOWLEDGE MANAGEMENT ON

ORGANIZATIONAL PERFORMANCE (A CASE STUDY OF

SELECTED FIRMS IN ABUJA)

ABSTRACT

This study focusses on effects of Knowledge management on organizational

performance in Nigeria focusing on selected firms in FCT Abuja. A descriptive

study design was used to gather information about knowledge management. The

survey tool was used, and 102 respondents were chosen using stratified non-

probability sampling. The data was analyzed using a quantitative approach.

Knowledge management tactics include inductions and training, HR policy,

organizational culture, and rewarding, according to the findings. Training, education,

remuneration, and recognitions were shown to be factors in knowledge management,

whereas difficulties included a lack of management support, altitude, and limited

time. Employees recommended that training, communication, participation, and

management assistance be implemented. Conclusion on knowledge management,

tactics include induction and training, HR policy, organizational culture, and

rewarding, and variables include training, education, and acknowledgment. Support

from management, altitude, and a restricted amount of time are all concerns that

must be addressed. Communication, training, involvement, and managerial

assistance are all recommended by the study.

CHAPTER ONE

1.0 INTRODUCTION AND BACKGROUND

1.1 General Introduction

Knowledge management (KM) has overtime been overlooked by organizations and

establishments to their own peril. The recognition of the fact that knowledge not just labour land

or capital is the key resource of production, making it the “new wealth” of organizations is

largely responsible for the development and implementation of knowledge management (KM)

strategies in corporate organizations (Ahn & Chang, 2012). In other to achieve performance or

profitability in any establishment, knowledge management has to be given adequate treatment.

For many companies, the time of rapid technological change is also the time of incessant struggle

for maintaining a competitive advantage. It is obvious that knowledge is slowly becoming the

most important factor of production, next to labour, land and capital. Even though some forms of

intellectual capital are transferable, internal knowledge is not easily copied.

This means that the knowledge anchored in employees’ minds can get lost if they decide to leave

the organization. Therefore, the key objective of management is to improve the processes of

acquisition, integration and usage of knowledge, which is exactly what knowledge management

is all about (Bagozzi and Yi, 2008). Knowledge management is a process that through creating,

accumulating, organizing and utilizing knowledge helps achieve objectives and enhance

organizational performance. Knowledge management also consists of strategy, cultural values

and workflow. In order to maximize its value, a change in strategies, processes, organizational

structures and technologies needs to be made.

(Artail,2006). One of the key benefits of introducing knowledge management practices in

organizations is its positive impact on organizational performance. The research conducted in

Croatia suggests that knowledge management positively affects organizational outcomes of

company innovate on product improvement and employee improvement.

According to Fugate etal, results collected in a logistics operations context prove the existence

of a strong positive relationship between a knowledge management process and operational and

organizational performance. Still, it is not well understood how different knowledge

management strategies affect organizational performance. Choi et al show that combining the

tacit-internal-oriented and explicit-external-oriented KM strategies indicates a complementary

relationship, which implies synergistic effects of KM strategies on performance. The results of

the study conducted by Zheng et al suggest that KM fully mediates the impact of organizational

culture on organizational effectiveness, and partially mediates the impact of organizational

structure and strategy on organizational effectiveness.

1.2 Statement of the Problem

The general average or below average performance of organizations in Nigeria when compared

to their counterparts in the advanced world has become a source of concern. This neglect of

knowledge management by Nigerian corporations has grossly affected the gross domestic

product or economic fortunes of Nigeria. The present economic hardship may not be

unconnected to the present neglect of knowledge management in Nigeria (Benbya, 2009).

Adequate knowledge management in companies and organizations has been neglected especially

in Nigeria where knowledge generally is not placed at the front burner of the society, this has led

to the lack of consistent progress in terms of profitability in Nigeria. This has regrettably spilled

over to the economy which today has been a far cry from what it used to be in the 70’s and early

80’s. Investing in Knowledge is an expensive venture most serious minded and business-oriented
organizations must invest in, if they are to strategically align themselves above competitors with

substitute products/services (Winter, 2012). Creating, Designing, implementing and managing a

robust knowledge system effectively in an organization is where most managers find it difficult.

The aim of every KM system is to share knowledge in the organization in the most effective

manner and improving performance in the process. This aim is usually not achieved because of

poor communication structures that exist in most public or government owned organizations in

Nigeria.

(Orji, 2008). KM goes beyond mere training and retraining of staff to review of lessons learnt

from each training. Every member of the organization contributes to the organization by sharing

knowledge on a subject matter for strategic positioning of the organization. When there is a cut

in the communication flow, knowledge is not effectively shared. According to Orji (2008), an

internship student can contribute immensely to an organization by sharing his/her experiences in

his/her previous job that could strategically align the organization in a vintage position.

1.3 Objectives of the Study

 To examine various Knowledge management strategies which could be used in order to

enhance organizational performance in selected firms in FCT Abuja.

 To examine factors which influence Knowledge management for achieving good

organizational performance in selected firms in FCT Abuja.

 To examine the challenges faced during the implementation of Knowledge management

practice in selected firms in FCT Abuja.

 To examine employees’ opinions on improving Knowledge management in selected

firms in FCT Abuja.

1.4. Research Questions

 What are Knowledge management strategies that could be employed in order to enhance

organizational performance in selected firms in FCT Abuja?

 What are the factors which influence Knowledge management for achieving good

organizational performance in selected firms in FCT Abuja?

 What are the challenges faced during the implementation of Knowledge management

practice in selected firms in FCT Abuja?

 What are employees’ opinions on improving Knowledge management in selected firms in

FCT Abuja?

1.5 Significance of the Study

This study will be of immense benefit to captains of industries, organizations who are interested

in improving their organizational performance and productivity. This study would also be

beneficial to researchers who intend to know more on this topic.

1.6 Scope of the Study

This study on the impact of knowledge management on organizational performance will

determine the relationship between knowledge management and organizational performance

using selected firms in FCT Abuja as a case study.

1.7 Limitations of the Study

The most obvious limitation of the study is the inability to cover all the firms in FCT Abuja as a
whole, the work is only limited to some selected firms in FCT Abuja. due to large size and
financial constraints.
Time constraint- The researcher will simultaneously engage in this study with other academic
work. This consequently will cut down on the time devoted for the research work.

1.8 Operational Definition of Terms

Knowledge: These are Facts, information, and skills acquired through experience or education;
the theoretical or practical understanding of a subject.

Knowledge Management (KM):. Knowledge management is the process by which an enterprise

gathers, organizes, shares and analyzes its knowledge in a way that is easily accessible to
employees. This knowledge includes technical resources, frequently asked questions, training
documents and people skills.

Management: Management is a process of planning, decision making, organizing, leading,

motivation and controlling the human resources, financial, physical, and information resources of
an organization to reach its goals efficiently and effectively.

Organization: It is a group of people assembling or congregating at one place and contributes

their efforts to achieve a common goal.

Organizational Performance: Organizational Performance refers to the analysis of an

organization’s performance against its objectives and goals. Or comparing the intended results vs
the actual results.
CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Overview

This chapter provides the review of various literatures on what have been done and known in the

whole area of Knowledge management and the effects of Knowledge management strategies on

organizational performance.

Knowledge is recognized as the critical resource in the organization and Knowledge

management is an important aspect for competitive advantage within an organization which

enhances organizational performance (Hislop, 2013). Most of business companies employ

knowledge management strategy in order to encourage Knowledge management activities among

employees for their benefits.

Knowledge management deals with the creating, acquiring, capturing, generating, codifying and

sharing of knowledge across the Institutions (Pearson & Saunders, 2009). Knowledge

management is one of the critical components of knowledge management (Pearson & Saunders,

2009). Knowledge management is the exchange of experience, events, and problems, thought

and understanding about something with an expectation to gain more insights (Sohail & Daud,

2009); it includes the communication of both explicit knowledge and tacit knowledge

(Hawamdeh, 2003). There are various effects which are supported by Knowledge management

practices within business companies for employees and employer, most organizations attain

competitive advantages by encouraging and promoting Knowledge management among

employees (Liebowitz, 2001).

2.1 Conceptual Framework

2.1.1 Knowledge

Scholars define knowledge in a variety of ways. For example, Nonaka and von Krogh

(2009:636) define it as “the actuality of skillful action” and “the potentiality of defining a

situation so as to permit skillful action.” Probst et al. (2005:22) define knowledge as the entirety

of proficiency and skills that individuals use for problem solving. That means all theoretical

skills, as well as rules on how to act. Knowledge uses data and information, but is always

connected to individuals. Knowledge is developed from individuals and represents the

expectations about cause-and-effect relations.

Knowledge-creating concepts begin life as data (Smith, 2001). It helps producing information

from data or more valuable information from less valuable information. Thus, knowledge is

basically similar to information and data, although it is the richest and deepest of the three, and is

consequently also the most valuable (Becerra-Fernandez et al., 2004). Becerra-Fernandez et al.

(2004) judge knowledge to be at the highest level in a hierarchy with information at the middle

level, and data to be at the lowest level. According to this view, knowledge cites to information

that enables action and decisions, or information with direction.

A commonly held view is that data is raw numbers and facts, information is processed data, and

knowledge is authenticated information. Yet, the presumption of a hierarchy from data to

information to knowledge, with each varying along some dimension such as context, usefulness

or interpretability, rarely survives scrupulous evaluation (Alavi and Leidner, 2001). The key

distinction between information and knowledge is not found in their content, structure, accuracy

or utility, but in the fact that knowledge is information possessed in the mind of individuals.

Alavi and Leidner (2001) posit that information is converted to knowledge once it is processed in
the mind of individuals and knowledge becomes information once it is articulated and presented

in the form of text, graphics, words, or other symbolic forms.

Boissot (1998:12) opined that knowledge builds on information that is extracted from data. Data

may or may not convey information to an agent. Whether it does so or not depend on an agent’s

prior stock of knowledge. Thus, whereas data can be characterized as a property of things,

knowledge is a property of agents predisposing them to act in a particular circumstance.

Information is that subset of the data residing in things that activates an agent – it is filtered from

the data by the agent’s perceptual or conceptual apparatus. Information, in effect, establishes a

relationship between things and agents. Boissot (1998) further maintains that knowledge either

consolidates or undergoes modifications with the arrival of new information. In contrast to

information, knowledge cannot be directly observed. Its existence can only be inferred from the

action of agents. Tuomi (1999) argues that the hierarchy from data to knowledge is actually

inverse; knowledge must exist before information can be formulated and before data can be

measured to form information. His central argument is that knowledge does not exist outside of

an agent (a knower).

2.1.2 Classification of Knowledge

The classification of knowledge is the foundation on knowledge management processes (Choi,

2002). Choi, further observed that much research classifies knowledge into tacit and explicit on

the basis of Polanyi's (1997) classification (Nonaka and Takeuchi, 1995; Arthur D Little, 1998;

Delphi, 1998; Ernst and Young, 1998; KPMG, 1998). Tacit knowledge is personal, context

specific, and therefore hard to formalize and communicate. Explicit knowledge refers to

knowledge which is transmittable in formal and systematic language (Nonaka and Takeuchi,

1995).
Jang and Lee (1998) divided knowledge into task knowledge and domain knowledge. The

domain knowledge involved with manual, reports, patents, products, services, advertisement and

software and the task knowledge consists of know-how, skill, benchmarking, brainstorming,

analysis, meeting, best practice and so on.

Leonard-Barton (1995) classified knowledge into scientific, industry-specific, firm-specific

knowledge. From scientific to firm-specific knowledge, this knowledge is increasingly less

codified and transferable. Pan and Scarbrough (1998) divided knowledge into factual knowledge

and behavioral knowledge. Factual knowledge is an accumulation of structured information and

is transferable in formalized processes. Behavioral knowledge includes mind structures

coordinating to social interaction of individuals and organizations. Probst (1998) classified

knowledge into individual and collective knowledge. Individual knowledge relies on creativity

and on systematic problem solving. Collective knowledge involves the learning dynamics of

teams.

Ruggle (1997) classifies knowledge into process knowledge, catalogue knowledge, and

experiential knowledge. Schuppel et al (1998) classified knowledge along the four bipolar

dimensions. First, the inner and outer knowledge, related to the bearer of the necessary

knowledge. Second, the actual and future knowledge, related to content of the relevant

knowledge. Third, the explicit and implicit knowledge, related to the aspect of visibility and

communicability of knowledge. Fourth, the knowledge created out of experience and rationality,

related to the aspect of richness and validity of knowledge. Wiig (1995) distinguished between

different forms and types of knowledge. The forms are public, shared expertise, and personal

knowledge. The types are factual, conceptual, expectational, and methodological knowledge.
[Link] Explicit and Tacit Knowledge

Explicit knowledge refers to knowledge that is expressed by formal techniques. It can be more

readily and directly observed, captured, transferred or communicated to others (Cabrera and

Cabrera, 2002; Pardo et al 2006). Explicit knowledge exists in the form of documents and visual

materials. Examples of explicit knowledge include a recipe instruction for how to set up

projector, and textbooks. Choi and Lee (2003) define explicit knowledge as knowledge that can

be documented, created, written down, transferred verbally or through some medium of

communication such as emails, telephone or information systems. Another definition by Barth

(2002) summarizes explicit knowledge as knowledge that can be processed by information

systems, codified or recorded, archived and protected by organizations.

In contrast, tacit or implicit knowledge, which is broadly called local knowledge (Yanow, 2004),

is subjective; it refers to practical know-how or intelligence based on experiential learning,

which often is not openly expressed (Wagar, 1998; Haynes, 2005). Tacit knowledge, on the other

hand, is informal knowledge that is embedded in mental processes, is obtained through

experience and work practices, and can be transferred by observing and applying it (Choi and

Lee, 2003). Barth (2002) defines tacit knowledge as knowledge that exists in people’s mind and

is quite difficult to transfer. Tacit knowledge is knowledge embedded in individuals and is

invisible to the outside observer. Examples of tacit knowledge are hard-to-communicate skills

such as leading and managing a group, the ability to drive a car, or on-site investigation ability.

Tacit knowledge is not directly expressed or captured in formal ways (Pardo, Cresswell,

Thompson and Zhang, 2006). Some scholars argue that tacit knowledge is a source of

competitive advantage for organizations and can be distinguished from explicit knowledge
(Kogut and Zander, 1992; Winter, 1998; Nonaka and Von Krogh, 2009).

Explicit knowledge has a universal character, supporting the capacity to act across contexts.

Tacit knowledge is related to the senses, experiences, intuition, unarticulated mental models, or

implicit rules of thumb (Nonaka and Von Krogh, 2009). People possess slightly different types

of tacit and explicit knowledge and apply their knowledge in unique ways. Individuals use

different perspectives to think about problems and devise solutions. They share knowledge and

group physical and intellectual assets in new and creative ways (Ashkenaset al., 1998).

2.1.3 Knowledge Management

Knowledge management comprises a range of practices used by organizations to identify, create,

represent, and distribute knowledge for reuse, awareness, and learning (Ezigbo, 2011:308). It

also enables the adoption of insights and experiences. Such insights and experiences as found in

Ezigbo, (2011:309) include knowledge either embodied in individuals or embedded in

organizational processes or practice.

The term knowledge management is multi-faceted and at the same time hard to conceptualize

(Keller and Castrup 2009:11). Alavi and Leidner, (2001) sees knowledge management as a

structured process that enables knowledge to be created, stored, distributed, and applied to

decision making. The experience from industries has identified the necessary factors that are

required to ensure success of knowledge management approach, and also to increase the

effectiveness of an organization. The goal of knowledge-oriented management is the generation

of knowledge out of information to use the gathered knowledge as competitive advantage, which

can be measured as business success (Hussock, 2009:10). The fundamental terms in this view

can be represented in North’s “knowledge step”.

The knowledge step is a model that tries to show all the elements in this context. Keller and

Castrup (2009:11) interpret the model as product of several building blocks that follow a process.

The smallest parts of the model are symbols, which become through order rules (syntax) to data.

Data are symbols, which are not interpreted. The creation of information based on data is

possible when the data are brought in relation to something. Information is therefore the

representation of data in a context and could be used for the preparation of decisions from an

operational point of view (North, 2005 cit. in Hussock, 2009).

Keller and Castrup (2009:12) opine that North’s “knowledge step” points out the value of the

human in the process. To create new knowledge, information has to be combined with contexts

based on experience, so humans are interacting with information. The model shows the relation

of each step towards the goal of knowledge management to be competitive. The value of

knowledge is visible for the company, it is transferred to a “competence” that means to transfer

the “what” into “how” and – to speak in practical terms – to gain knowledge by implementing

steps of permanent education, but also to use the education to transfer it to skills (North 2005 cit.

in Hussock, 2009).

The step “action” is explained in Hussock (2009) as how the organization is able by adding value

channel motivation to generate knowledge out of information and how the knowledge is used for

problem solving. The capacity is the “competence” of an organization or a person. Krogh and

Roos (1996) as noted in Hussock (2009:12) see “competence as an event, rather than an asset.

This simply means that competencies do not exist in the way a car does, they exist only when the

knowledge (and skill) meet the task.” The difference makes transferring knowledge into a

purposeful action. Competiveness according to North is defined with the core competencies in a

company. The core competencies are a construct of skills and technologies existing on explicit
and tacit knowledge distinguished by stability in terms of time and influence on other products.

Core competencies generate a value to customers are unique compared with competitors, it

provide the capability to access new markets and are not easy to imitate or to transfer. The core

competencies of a company are representing its competiveness. The model helps organizations to

identify where links between each of the steps are missing (Hussock, 2009).

The three main aspects to knowledge:

− Individual knowledge – (i.e. the sum of an individual’s capabilities and experience),

determines the possible actions open to an individual and, consequently, the contributions they

are able to make to a particular project or task”, the individual knowledge is made up of the

knowledge of the individual members of the organization and their interactions;

− Data – internal and external data sources, which means that all available documented

knowledge (explicit knowledge);

− Action – includes physical and mental actions (e.g. problem solving) and the results to

complete an individual task often result in large amounts of data, both previous mentioned

aspects provide input for the action level – here the business processes are enacted and the value

creating processes are represented.

According to Wah (2000:308-309), the essence of knowledge management in organizations is to

prevent the waste of resources by seeking the best practices and by not reinventing the wheel.

Knowledge management objectives then, try first to capture, store, retrieve and distribute

tangible knowledge assets, e.g., copyrights, patents and licenses. Secondly, to gather, organize

and disseminate intangible knowledge, e.g., tacit and explicit knowledge and information. And

thirdly, they are used to create an interactive learning environment where people transfer, and

share, their knowledge, and apply it in order to accumulate new knowledge.

Tierauf (2001:97) also states that the essence of knowledge management is knowledge

discovery, knowledge organization and knowledge sharing. Knowledge management is a process

ruled by a knowledge management system, which is designed to improve corporate efficiency by

providing a framework, tools, and techniques for re-using captured intellectual assets. For

performance enhancement by applying knowledge, a knowledge management system needs

capturing, integrating and disseminating functions (Tierauf 2001:105).

2.1.4 Knowledge Management Process

Knowledge management process is the heart of knowledge management. Therefore, most

researchers present a phase of knowledge management. Boer (2005) stated that many scholars

argue that knowledge management deals with managing different knowledge processes.

Different scholars perceive the importance of each of the knowledge processes differently.

Arthur D Little (1998) developed a similar set of processes which includes; acquisition and

creation, saving, disseminating and use.

Delphi (1998) proposes four key knowledge management processes. Capturing is related to

obtain external knowledge and create knowledge by research or experience. Sharing is make

organization to access knowledge in anytime and anyplace. Ruggle (1997) proposed generation,

codification, and transfer. Knowledge generation includes all activities which bring to light

knowledge which is new, whether to the individual, to the group, or to the world. Knowledge

codification is the capture and representation of knowledge so that it can be re-used either by an

individual or by an organization. Knowledge transfer involves the movement of knowledge form

one location to another and its subsequent absorption.

Schuppel, Muller-Stewens, and Gomez (1998) suggest four knowledge management processes
that are composed of use and multiplication, development and acquisition, transfer,

institutionalization. McShane and Glinow (2000) classify knowledge into acquisition, sharing

and utilization. Knowledge acquisition is the development or creation of skills, insights, and

relationships. Knowledge sharing is the dissemination of what has been learned. Knowledge

utilization is he integration of learning so it is broadly available and can be generalized to new

situations. While Wiig, (1995) divided knowledge management processes into creation,

manifestation, use, and transfer.

Knowledge management processes are considered to be chains in some kind of knowledge value

chain, that either is, or should be followed iteratively and repetitively; Knowledge being created

becomes increasingly valuable for an organization when it is combined with other knowledge,

when it is shared among its members, when it is also used by these organization members and

finally when it is maintained and stored for future use (Boer 2005:17).

Even though it is believed that the distinction between the knowledge management processes is

not absolute and that they are interrelated, this research focuses on knowledge sharing. The

notion of ‘sharing’ is chosen, rather than notions like distributing, transferring or transmitting, in

order to stress the social and interactive nature of the process (Boer, 2005). In this context,

knowledge sharing is just one, yet very important knowledge management processes that will be

addressed.

2.1.5 Knowledge management Strategies

Literature identified several strategies such as training activities, HRM strategy, rewarding

systems, organizational culture and mechanisms (web 2.0 tools, social media tools, intranet etc.

(Cabrera & Cabrera, 2005; Hislop, 2013). HRM strategies and training is very important to equip

knowledge and skills among employees in boosting performance.

Organization conduct in-house and outside training to enhance employees way of doing work,

while HRM Strategies are employed to support Knowledge management by develop

commitment and loyalty as they influencing employees to share, codify, create knowledge and

motivate them in Knowledge management activities (Hislop, 2013). WHO (2005), described that

National policy-marker, WHO programs and Health specialist are main focus on the knowledge

management strategy in ensuring appropriate and accurate Knowledge management practices.

The implementation of this depends on strategic directions for ensuring knowledge management

targets are achieved including access to world health information, transformation of knowledge

into policy and action, sharing and applying experience and encourage electronic health in

different countries (WHO, 2005).

Rewards strategies include recognitions, bonus, high salary, promotion, incentive and

appreciation; are found to accelerate and enhancing Knowledge management among employees

(Leibowitz, 2003; Kankahill et al., 2005). Further it is supported of that organization rewards

such as bonus, high pay and promotion have great significant effects on enhancing Knowledge

management (Kim & Lee 2006). On the side of cultures as a totality way of doing thing and

practices within the organization, there are various activities conducted comprising element of

culture. Organization need to have its own culture which focus on their activities within

organization and engage employees on Knowledge management (Tohidinia & Mosakhani 2010).

Doodeward (2006) emphasized that online Knowledge management tool is one of critical source

considered in enhancing Knowledge management. Knowledge management activities involves

different organizations partners used for achieving main objectives; this has great value in

knowing problems on cultural, social, politics and economic to establish Knowledge

management strategies. In this regards organization have understood significance of internet as

great Knowledge management tool. Rural Uganda was used as one of the case study for

Knowledge management activities which made use of interconnection of various tools like radio,

video, dance, drama and website which enabled them to share agricultural knowledge found

online and elsewhere into their cultural practices. Stakeholders real need to use digital tools for

Knowledge management, therefore in Africa, a great effort to develop local solutions are needed

and encouraged to increasing sense of ownership and integrated local Knowledge management

behavior.

2.1.6 Factors Influencing Knowledge management and Organizational

Performance

Different literatures analyze different ways on these two concepts of the factors influencing

Knowledge management and organizational performance.

[Link]. Knowledge management

Noor and Salim (2011) identify factors, which influence Knowledge management and groups

them into two categories, which are technical factors like technology and non-technical factors

which are employees himself/herself, company cultures and company structures. All these have

great support on encouraging Knowledge management on work organization.

In other way firm culture, firm size, firm climate, information technology, and compensations,

together with work factors, stressors, work demands and their effects on sharing ideas are

recognized as most important factors on Knowledge management (Rehman et al., 2011).

According to Alhalhouli et al (2014) showed and support that the intention of Knowledge
management is related to sharing knowledge behavior, behavior monitoring. Management of an

organization have an impact on Knowledge management. Okyere-Kakye et al (2010) present the

personal influence to be critical effect on the Knowledge management in individual employees

characters in an organization and they also identifies this individual influences can be such as

individual awareness, trust and personality. In Knowledge management, these factors when

critically handled can give positive feedback and hence support employees to have knowledge

which can apply on their work and get expected performance.

[Link]. Employees Performance

Muda et al (2014), reported that work stress, employee’s motivations and proper communication

have positive or negative effects on the organizational performance; also suggest that all policies

and procedures should consider all determinants to help employee performing well, to facilitate

exchanges of information on the important effect of performance, and evaluating the

performance of workers and organizations which assist in developing workers performance plan.

Moreover, leaders’ perceptions, company culture, content of work and money incentives appear

to be the influencing factors and when in positive way have great advantages on the level

employees are performing (Saeed et al., 2013). In addition, employee’s problems were

discovered to be among things which can hinder performance of employees.

According to Al-Sinawi (2015) good transfer of knowledge (training), evaluation of

organizational performance, individual services performance is the important influential issues

on the performance of employees. With regard to training, organization ensures from time an

employee is employed and throughout employment period there are continuations of training

conducted to him/her. Also, Al-Sinawi (2015) explains that training and evaluation of
performance will increase products produced or services quality, reduce to produce unexpected

quality hence productivity levels increase. Furthermore, workers service and performance

depend on how knowledge is exchanged and the evaluation appraisal program.

2.1.7 The Challenges Hinder Knowledge management for enhancing

Organizational performance

Literature found various challenges which hinder the application of Knowledge management

practices. This study divides the challenges hindering the application of Knowledge management

practices into two groups which are: the company challenges and individual challenges as

follows:

[Link] Company Challenges

Company challenges are caused by company and its management in general. Sohail and Daud

(2009) report that, company challenges are challenges which are not inherent or caused by

individual employee; they can be environmental and can be caused by individuals in the

managerial positions within the company. Companies lack clear and well documented HRM and

institutional policies and procedures manual in order to guide the Knowledge management

practices. A written document shows seriousness on something and can make employees fully

committed. On top of that, the use of technological tools to facilitate the flow of knowledge from

one individual to another must also be guided by a clear policy. Gray(2009) mentions that, most

of companies lack clear policy and guidelines to support the implementation of various social

media tools (mechanism strategy) in order to be used to support Knowledge management

practices.
Paroutis and Al-Saleh (2009) report that, lack of rewards and recognition from the company

prohibits such employees to participate on Knowledge management practices. Most of

employees complain about lack of rewards, recognition and incentives after participating in

Knowledge management practices within the company. In addition to this, lack of rewards such

as money, training, attending seminars and conferences could prohibit employees to participate

on Knowledge management practices. Most of the organizations lack an organizational culture

which could lead the application of key strategies to enhance Knowledge management practices.

Lack of organizational culture makes employees feels uncomfortable to participate and share

knowledge freely. Other challenges as indicated in this category include: budget constraints, lack

of institutional structure, lack of institutional commitments, lack of good working environment

to support the implementation of key strategies used to enhance Knowledge management

(Hislop 2003; Mladkova 2011).

[Link] Individual Challenges

Individual challenges are derived from individually-driven considerations such as wrong beliefs,

wrong perceptions, technophobia, expectations, attitudes, feelings, lack of awareness on

Knowledge management practices and unwillingness to participate on Knowledge management

practices within a company (Sohail & Daud 2009). It was reported that, most employees

complain about lack of fairness, friendship, lack of trust and openness that prohibit them to share

their knowledge (Hislop, 2003).

Paroutis and Al Saleh (2009) say that, lack of organizational or management support in terms of

communicating the benefits, lack of necessary training and lack of rewards and recognitions
efforts are among the challenges which hinder employees participate in enhancing Knowledge

management practices. Lack of time, resources and interest on the application of key strategies

used to enhance Knowledge management practices are among the most common individual

challenges within many companies (Grosseck 2009).

2.2 Theoretical Literature Review

On theoretical literature review we will discuss in detail various management theories which

explain the impact of Knowledge management on organizational performance. The theories

guiding this study are the resource-based view of the firm (RBV) and knowledge-based view.

2.2.1 The Resource Based View (RBV)

The RBV emphasizes firm-specific resources or assets (tangible and intangible, human and

nonhuman) possessed or controlled by the firm which permits it to devise and apply value

enhancing strategies (Barney, 1991). The approach suggests that firms gain and sustain

competitive advantage by deploying valuable resources (Barney, 1991; Grant, 1996a). These

resources and capabilities that are valuable, uncommon, poorly imitable and non-substitutable

constitute firm’s unique or core competencies (Halawi, Aronson & McCarthy, 2005). Evolving

developments in the RBV suggests that capabilities are crucial contributors to organizational

performance (Teece, et al., 1997). In RBV, knowledge is seen as a strategic asset or capability

with the potential to be a source of sustainable competitive advantage (SCA) for an organization

(Teece, 1998).

As Hitt, Bierman, Shimizu & Kochhar (2001), puts it, intangible firm-specific resources like

knowledge permit firms to add up value to incoming factors of production, thereby generating
competitive advantage. It therefore promotes a knowledge-based perspective, which postulates

that competitive advantage (CA) is built upon those privately developed resources, tacit and

explicit, inside the firm that are less likely to be imitated easily (Collis & Montgomery, 1995;

Curado, 2006). These unique resources and capabilities are discussed under different names like

distinctive competences, core competences, invisible assets, core capabilities, internal

capabilities, embedded knowledge, corporate culture, and unique combinations of business

experience (Von Krogh & Roos, 1995).

Barney (1991) developed the VRIO platform for assessing kinds of resources that would present

sustainable competitive advantage. They are: value creation for the customers, rarity compared to

competition, inimitability, and organization.

2.2.2 The Knowledge Based View

A knowledge-based perspective of the firm builds upon and extends the resource-based theory of

the firm initially promoted by Penrose (1959) and expanded by others (Barney 1991; Werner felt,

1984 as cited in Alavi & Leidner, 2001). The KBV presents ‘knowledge’ as the most valuable

resource of the firm (Curado, 2006; Spender, 1996). The knowledge resident in human capital

allows firms to improve distinctive competencies and discern innovation opportunities (Hansen

et al., 1999; Wright et al., 2001; Takeuchi, 2013). When firms engage on improvement of their

management processes and develop new products, they require the ability of human capital to

produce creative ideas, develop innovative approaches, and exert new opportunities (Scarbrough,

2003). The KBV of the firm therefore holds that the firm's capability to create and utilize

knowledge is the most important source of a firm's SCA (Prahalad & Hamel, 1990; Grant,

1996a). In the current economy, where the only certainty is uncertainty, the one sure source of
lasting competitive advantage is knowledge (Nonaka, 1991). As Sher & Lee (2004) puts it

knowledge is gradually becoming the most important factor of production, next to labour, land

and capital.

2.3 Empirical Studies

There are many studies on knowledge management just as there are many researchers of

knowledge management. Empirical literature review bases discussions on Knowledge

management for enhancing organizational performance

Mills and Smith (2011) to examine the relationship between knowledge management capability

and organizational performance. They found that knowledge acquisition, knowledge application,

and knowledge protection are positively related to organizational performance, but not

knowledge conversion. They argued that the relationship between knowledge management and

performance is a complex one, and that each knowledge management process may not

necessarily be directly linked to performance even they are found to be correlated to performance

from a combined model. Their study showed that in summary, knowledge infrastructure

capabilities and knowledge process capabilities affect organizational performance positively.

A study by Rasoulinezhad (2011) looked at the role of knowledge management processes and

performance in commercial banks of Iran. The measure of knowledge management process

includes acquisition, distribution (conversion/transfer), utilization (application), creation, and

storage. Whereas, performance includes three perspectives – organizational financial

performance (OFP), organizational market performance (OMP) and the organizational

organizational performance (OEP). The result showed a significant relationship between

knowledge management processes and performance of the organizations.

Interestingly, of the three measures for performance, organizational market performance (market

share) had the highest correlation (0.717) with the knowledge management processes whereas

the OFP and the OEP had 0.628 and 0.516 respectively. On an individual basis, knowledge

utilization (application) showed a correlation of 0.58, whereas knowledge acquisition and

knowledge distribution (conversion) showed a very weak correlation. Knowledge creation and

storage indicated a negative correlation with performance.

According to Hodge (2010), there is a correlation between knowledge management processes

and knowledge management capabilities. Knowledge management efforts typically focus on

organizational objectives such as improved performance, competitive advantage, innovation, the

sharing of lessons learned, integration and continuous improvement of the organization (Banes

2011).

2.4 Summary

Findings from the previous studies as reviewed above indicate that there is a gap which need to

go further into studies and come up with effects of Knowledge management on organizational

performance because most of the studies were conducted outside Nigeria.

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 Overview

This chapter includes research design, target populations, area of study, sampling procedures and

sample size, instrument of study, validity and reliability of instrument, data analysis procedures

and ethical consideration.

3.2 Research Design

Research design is the arrangement of conditions for collection and analysis of data. Descriptive

research studies are those studies which are concerned with describing the characteristics of a

particular respondents, or of a group, whereas investigate research studies determine the

frequency with which something occur or its association with something else (Kothari, 2014).

A descriptive research design applied for this study because, it mainly focuss on investigating

and describing to understand the effects of Knowledge management on organizational

performance in selected firms in FCT Abuja.

3.3. Target Population of Study

Study population in this study comprised all employees in selected firms in FCT Abuja.

3.4. Area of Study

The study conducted in selected firms in FCT Abuja which considered being one of area where

Knowledge management to enhance organizational performance is an issue or problem which

need critical study and bring out the recommendations.

3.5. Sampling Procedures and Sample Size

Sampling procedure is the process of selecting a subset of the study units to be studies from

larger universe to which they belong (Kothari 2004). There are two kind of sampling which

mainly are probability and non-probability sampling techniques (Kombo & Tromp, 2006).

According to Saunders et al., 2009 and Kombo & Tromp (2006) they described in details that

probability sampling provides equal chance for all participants to be selected and mostly for

quantitative study while non-probability sampling selection depend on the chance or probability

of each case to be selected and high applicable on quantitative approach. This study used non-

probability sampling by mainly consider stratified random sampling techniques which employed

to take into consideration all employees from different selected firms are involved in the study.

Therefore, the total sample size will be total 102.

3.6. Data Collection Method

Data collection methods refer to a process used for gathering various data which are collected

during the study (Saunders, Lewis & Thornhill 2009). There are various data collection methods

for both quantitative and qualitative approaches. This study employed survey method for data

collection. Survey is a group of research methods commonly used to determine the present status

of a given phenomenon (Powell and Connaway 2004). In other words, while a survey closely

considers something in a general or very broad way, or is a statistical study of a sample

population by asking questions about age, income, opinions, and other aspects of people's lives, a

questionnaire is a set of questions used to gather information in a survey.

3.6.1. Instruments of the Study

Data collection tools/instrument refers to a process for gathering various data which are collected

during the study (Saunders at el, 2009). In data collection or Instruments of study have different

techniques to collect quantitative and qualitative data. In this research the researcher used

questionnaire as main technique for collecting data and questionnaires distributed to the

respondent as sample size depict.

[Link] Questionnaire

Questionnaire is a tool of collecting data by asking people to respond to exactly the same set of

questions. They are often used as part of survey strategy to collect descriptive and explanatory

data, opinions, behaviors and attributes (Saunders et al., 2003). In this study the questionnaires

distributed to 102 respondents.

3.7 Validity and Reliability of Instruments

Validity and Reliability is the process of establishing documents evidence. This provides high

degree of accuracy that specific process constantly produces a product meeting its determined

specification and quality attributes (Cohen, 2000). In short Validity and Reliability of

instruments is the extent to which data collected truly reflect the phenomena being studied. In

this study data collections used one main instrument which is questionnaire. Then the

questionnaire pre-tested, to guarantee a common understating of questions among respondent

and assist to yield validity and reliability.

3.8 Data Analysis Procedures

In this study quantitative data analysis procedure for analyzing the collected data were applied to

enrich the value of the study. The quantitative data will be entered into the computer and

analyzed using Statistical Package for Social Sciences (SPSS). Quantitative data analysis added

value in the study as it is objective on analyzing the facts finding and it is very suitable data

analysis approach as data collected through questionnaire instrument.

3.9 Ethical Consideration

All ethical procedures with regards to confidentiality were strictly observed and participants

were given an informed consent for them to consent to take part into the study and their

information would be treated confidential and used only for the purpose of this study.