Academic journal article Review of Management

How Does Knowledge Management Drive Competitiveness in Egyptian Software Companies?

Academic journal article Review of Management

How Does Knowledge Management Drive Competitiveness in Egyptian Software Companies?

Article excerpt

(ProQuest: ... denotes formula omitted.)

Introduction

The field of strategic management focuses on understanding sources of sustainable competitive advantages (SCA) in organizations (Barney, 2001; Priem & Butler, 2001). Based on Resource-Based Theory (Penrose, 1959; Wernerfelt, 1984; Barney, 1991; and Peteraf, 1993), generating and sustaining competitive advantages (CAs) resides in the set of strategic resources and capabilities available to the firm. Knowledge and knowledge management (KM) resources are particularly significant and arguably the most important among these (Drucker, 1993; Spender, 1996; Grant, 1996b; Nahapiet and Ghoshal, 1998; and Liao, 2009) and considered a main source of CA (Connor and Prahalad, 1996; Grant, 1996a; Alavi and Leidner, 2001; Zhao et al., 2003; Halawi et al., 2005; Wong and Aspinwall (2006); and Ho, 2009). Although KM has been frequently cited as a prime source of organization competitiveness, analyses to date have been mostly conceptual (Choi and Lee, 2003; and Chuang, 2004), and only a limited number of studies have explored empirically the resource based view (RBV) of KM. Moreover, the mechanism through which this is achieved remains an area for investigation.

As we are living under a hyper competition environment; firms need to resort to continual innovation if they would like to obtain a CA (Liu et al., 2001; Lemon and Sahota, 2004; and Cooper et al., 2008), and an increasing attention should be given to innovation as a key success factor in a firm's SCA (Damnpour (1989); Damnpour (1991); Doyle (1998); Quinn (2000); Lee et al. (2005); Darroch (2005); Kleef, and Roome (2007); Plessis et al. (2007); Alegre and Chiva (2008); Liao (2008); and Rhee et al. (2009)). Effective KM was found to be an antecedent of innovation in some studies (Nonaka and Takeuchi, 1995; Dove, 1999; Carneiro, 2000; Darroch, 2005; and Liao and Wu, 2009). The KM competency is critical to successful innovation as innovation process is knowledge intensive (Gloet and Terziovski, 2004; and Gordon et al., 2007; Maqsood and Finegan, 2009).

However, it is difficult to draw conclusions from the extant literature about the relationship between effective KM and innovation because there is a dearth of empirical research that investigated relationships between the two constructs (Gloet and Terziovski, 2004; Darroch, 2005; and Hall et al., 2006). Besides; some of this literature takes a unidimentsional view of innovation which is ''technical innovation'' (e.g. Gerwin and Barrowman 2002; Gonzalez, 2007; and Liao et al., 2008) with relatively fewer studies conducted on organizational innovation based on the viewpoint of the organization as a whole (Weerawardena, 2003; and Dobni, 2008). Therefore, inconsistency in findings were found (Dobni, 2008). His study aims to (1) provide an empirical investigation for RBV of KM in Egyptian software companies, and (2) provide an explanation of how would this occur through organizational innovativeness (OI).

Previous studies

There is a general agreement that KM represents an important CA factor for organizations (Quinn, 1992 Drucker, 1993; Hall, 1993; Alavi and Leidner, 2001; Connor and Prahalad, 1996; Grant, 1996b; Zhao et al., 2003; Angelo et al., 2003; Halawi et al., 2005;and Ho, 2009), and that SCA in the 21st century will be accomplished through KM (Johannessen et al., 1999; Grant 1996b; Nahapiet and Ghoshal, 1998; Johannessen and Olsen, 2003; and Halawi et al., 2005). However, Halawi et al. (2005); and Chuang (2004) note that while the notion that KM might be able to create SCA for firms is provocative, working in this area is relatively underdeveloped, both empirically and theoretically. Chuang (2004) contended the research on KM and CA has emphasized 'description rather than empirical study' but that KM can lead to such an advantage. Choi and Lee (2003) in their attempt to provide an integrated view of KM that links KM enablers, process and organization performance, asserted that in spite of considerable discussion of KM processes and organizational performance, there is no clear link between them. …

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