A Strategy-Based Process for Implementing Knowledge

Management: An Integrative View and Empirical Study

Ing-Long Wu
Department of Information Management, National Chung Cheng University, 168 University Road, Ming-Hsiung,
Chia-Yi, Taiwan. E-mail: ilwu@mis.ccu.cdu.tw
Han-Chang Lin
Information Technology Division, First Commercial Bank, 30 Chung King South Road, Sec. 1, Taipei, Taiwan.
E-mail: i97267@mail.firstbank.com.tw

Knowledge resource is unique and valuable for a link to

competitive advantage based on the knowledge-based
perspective. Effective knowledge management is the
major concern of contemporary business managers. The
key determinant of effective knowledge management is
the firms competitive strategy. The link between business strategy and knowledge management, while often
discussed, has been widely ignored in practice. Moreover, while knowledge management is complex in nature,
it is difficult to directly translate a firms competitive strategy into the specific knowledge management activities.
This requires first defining knowledge strategy to guide
further information technology (IT)-supported implementation approaches. Finally, the ultimate goal of knowledge
management lies in the realization of firm performance.
Previous studies have just discussed partial relationship
among these relevant knowledge concepts rather than
in an integrative manner. Thus, this research proposes a
complete process-based model with four components:
competitive strategy, knowledge strategy, implementation approach, and firm performance. Empirical results
have shown positive relationships between any two consecutive components and useful insight for knowledge
implementation practice.

Introduction
In the last decade, the role of knowledge and knowledge
management (KM) in explaining differences of firm performance has been the object of a passionate debate among managers, consultants, and academicians (Prahalad & Hamel,
1990; Conner & Prahalad, 1996; Ghoshal & Moran, 1996).
Managers, on one side, understand that the only competitive advantage that the future firm will have lies in its ability
to learn faster than its competitors (DeGeus, 1988; Hansen,
Received April 24, 2008; revised July 23, 2008; accepted October 13, 2008
2009 ASIS&T Published online 6 January 2009 in Wiley InterScience
(www.interscience.wiley.com). DOI: 10.1002/asi.20999

2002). KM is critical to the capabilities of effective organizational learning. Consultants, on the other side, continue
offering KM models and solutions to meet a firms appetite
for effectively managing knowledge assets. Finally, academicians attempt to explain how knowledge, as a resource that
is valuable, rare, inimitable, and unsubstitutable based on the
knowledge-based perspective (Dunford, 2000; Schultze &
Leidner, 2002; Melville, Kraemer, & Gurbaxani, 2004), is the
ultimate source to sustainable competitive advantage. This
perspective builds on and extends the resource-based view of
the firm initially discussed by Barney (1991).
Although recent empirical effort has found support for the
direct impact of KM on firm performance, we should take
the positive results with some cautions (Decarolis & Deeds,
1999; Yeoh & Roth, 1999; Tanriverdi & Venkatraman, 2005).
A simplistic analysis for the conclusion of these studies could
mistakenly lead managers to think that the more learning
the better and the more knowledge the better. But two key
concerns for KM arise. First, KM encompasses much more
than technologies for facilitating knowledge store and sharing. In fact, practitioners have realized that people and the
culture to the workplace are the key drivers to ultimately
determining the success or failure of KM (Alavi & Leidner,
2001). Second, emphases on technologies force a narrow
view that may affect the growth and diffusion of KM in a firm
(Rubenstein-Montano, Liebowitz, & Buchwalter, 2001).
Thus, technical and organizational initiatives, when
aligned and integrated, can provide an integrated infrastructure to support KM implementation. While an integrated
infrastructure tends to enhance KM capabilities to exploit and
explore knowledge, it does not insure that a firm is making
the best investment of its knowledge or that a firm is managing its knowledge in the right way (Zack, 1999a). How
should a firm determine which knowledge effort is appropriate or which knowledge resource should be developed? The
main context for determining the activities of KM in a firm

JOURNAL OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE AND TECHNOLOGY, 60(4):789802, 2009

is the firms competitive strategy (Davis, 1998; Earl, 2001;

Desouza & Awazu, 2005). The firms competitive strategy
provides a blueprint for predicting the need of future knowledge resources and further determining the activities of KM
to effectively support the firms mission and objective. However, the link between business strategy and KM, while often
talked about, has been widely ignored in practice (Davenport,
DeLong, & Beers, 1998; Ruggles, 1998).
Moreover, while KM is complex with multifaceted
concepts across functional and organizational boundaries,
it is unsure of how to translate a firms competitive strategy more intelligent into the specific KM activities. This
creates a need to first define what we call knowledge strategy for guiding further implementation practice (Hansen,
Nohria, & Tierney, 1999; Zack, 1999a). As a result, the
implementation approaches would be properly identified in
line with knowledge strategy. Finally, the major concern
behind the implementation is the association with firm performance (Gold, Malhotra, & Segars, 2001; Lee & Choi,
2003; Tanriverdi, 2005). Existing literature has just discussed
partial relationships among these relevant knowledge concepts rather than in an integrative manner, such as KM
and firm performance (Carlsson, 2003; Lee & Choi, 2003;
Darroch, 2005). Therefore, this study proposes a complete
process-based model with four components for implementing
KM, competitive strategy, knowledge strategy, implementation approach, and firm performance. This model is further
examined empirically for its practical validity.
Literature Review and Hypotheses Development
First, although knowledge can be considered as a strategic resource to gain and sustain competitive advantage, an
organization must articulate its strategy intent among the
competitors and identify the knowledge strategy to execute
its intended strategy (Zack, 1999a; Dunford, 2000; Teece,
2000). Next, many studies have examined the relationship
of the strategy in managing knowledge and firm performance (Gold et al., 2001; Lee & choi, 2003; Darroch, 2005;
Tanriverdi, 2005). The knowledge managing strategy refers
to the development and use of knowledge assets through the
capabilities of knowledge processes, including knowledge
creation, sharing, application, and integration (Zack, 1999a).
In addition, as more firms begin to incorporate KM into their
competitive strategy, many are showing great interest in the
approaches and the role of information technologies for KM
implementation in order to support and enhance the capabilities of knowledge processes (Hansen et al., 1999; Zack,
1999b; Bloodgood & Salisbury, 2001; Carlsson, 2003). The
overall logic for building the process model can be derived
from a summary of the above partial relationships regarding
the relevant concepts in the literature. These partial relationships, for example, include the relationships of competitive
strategy and knowledge strategy, knowledge strategy and
firm performance, and knowledge strategy and implementation approaches. Accordingly, Figure 1 provides a pictorial
depiction of this process-based model. Furthermore, a more
790

Competitive
strategy

Knowledge
strategy

Implementation
approach

Firm
performance

FIG. 1. The process model.

detailed literature is discussed for these concepts in this

process model and relevant hypotheses development.
Effect of Competitive Strategy to Knowledge Strategy
Competitive strategy. The identification of competitive
strategy must be able to predict future development, take lead
in thinking of business process, and draft plans for emergencies to meet the future and uncertain challenges. Two detailed
strategic typologies in the business level were developed
based on comprehensive studies from rich data and case studies, which are the major stream to the strategic literature. One
is Miles and Snows (1978) typology of strategies and the
other is Porters (1980) generic strategies.
Miles and Snow (1978) argued that a firms strategies
could be classified based on how the firm responds to three
key elements of what they refer to as an adaptive cycle.
These key elements are as follows: the entrepreneurial element, relating to how the firm orients itself to the marketplace;
the administrative element, embracing how the firm attempts
to coordinate and implement its strategies; and the technological element, referring to the technology and processes
used to produce the firms products or services. Accordingly,
they derived a typology of strategies, which considered four
major firms strategies, prospector, defender, analyzer, and
reactor. A firm following the prospector strategy frequently
changes its products or services, consistently attempting to
be the first movers in the market. The focus of such a firm
is on innovation and flexibility in order to quickly respond
market conditions. The analyzer strategy intends to maintain
a relatively stable base of products or services while selectively moving into new areas with demonstrated promise.
It tends to emphasize formal planning process and tries to
balance cost and efficiency with risk taking and innovation.
A defender strategy tries to provide a relatively stable products or services to certain defined market. It emphasizes
tight control and continually seeks operating efficiency to
lower cost. A firm with the reactor strategy essentially

JOURNAL OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE AND TECHNOLOGYApril 2009
DOI: 10.1002/asi

lacks any clear strategy and only responds to competitive

circumstance when forced to do so in an accidental manner.
Porter (1980) suggested that in any industry there are three
potentially successful generic competitive strategies, cost
leadership, differentiation, and focus. The cost leadership
and differentiation strategies seek competitive advantage in
a broad range of the industry, while the focus strategy is used
with either the cost leadership strategy (cost focus) or differentiation strategy (differentiation focus) in a narrow segment
of the industry. The specific actions required to implement
each generic strategy vary widely from industry to industry
and firm to firm. According to the Porter, explicit choice of a
specific generic strategy is important because achieving both
cost leadership and differentiation simultaneously is usually
difficult because the differentiation is usually costly. A study
of the 64 largest U.S. manufacturing firms found that skills
and resources needed for a cost leadership are incompatible
with those for a differentiation.
While the two typologies presumably classify the same
phenomena, they are different for each stressing somewhat
different aspects of business strategies. The strategies defined
in the Miles and Snows typology are mutually exclusive in
their content and are usually selected for one of them during
certain time periods. With the Porters typology, organizations are sometimes mixed with the cost leadership and
differentiation together for certain competition situations. In
essence, the cost leadership and differentiation, while being
often in certain forms of coexistence, may not be distinctively
defined (Segev, 1989). In addition, the Porters typology
places less emphasis on the aspect of organizational behavior
of implementing a strategy (Wiseman, 1988; Segev). As the
two issues are the major concerns in this study, the Miles and
Snows topology would be the choice for our defining the
strategic types. Moreover, since the reactor strategy essentially lacks a consistent strategy, no a prior prediction needs to
be made for its behavior. We, thus, exclude it from formal consideration in strategy formulation (Shortell & Zajac, 1990).

Knowledge strategy. Knowledge strategies can be defined

as the set of strategic choices that direct and shape the
organizations learning process and subsequently determine
the firms knowledge resources (Hansen et al., 1999; Zack,
1999a). In the study of Bierly and Chakrabarti (1996), knowledge strategies were defined by using cluster analysis to
group pharmaceutical firms over different time periods based
on the variables: (a) balance between internal and external
learning, (b) preference for radical or incremental learning,
(c) learning speed, and (d) balance between breadth and
depth of knowledge base. The findings finally concluded
four generic knowledge strategy groups, innovator, loner,
exploiter, and explorer. The innovator is described as the most
aggressive and fastest learner in the industry, who combines
internal and external learning as well as radical and incremental learning. The loner is the isolated learner, with high level
of internal learning but low level of external learning. In addition, the loner is slow in applying new knowledge and has a

narrow knowledge base, focusing on certain areas of expertise. The exploiter has high level of external learning but a
low level of internal learning. It learns in an incremental way,
instead of a radical way, and has a broad but shallow knowledge base. Finally, the explorer is a less aggressive learner
than the innovator, who combines internal and external learning and presents a high level of radicalness. The firms in the
innovator and explorer groups tend to be more profitable than
the firms in the exploiter and loner groups.
Zack (1999a) argued that knowledge can be considered
the most important strategic resource of the firm, and, further,
that the firm must explicitly address, as part of their knowledge strategy, a range of decisions regarding the creation,
development, and maintenance of their knowledge resources
and capabilities. Furthermore, two classification variables
(knowledge exploitation versus exploration orientation and
internally versus externally acquired orientation) were used
to define knowledge strategies, as indicated in Figure 2.
More specifically, the firms with exploiting internal knowledge are defined as the most conservative knowledge strategy
while the unbounded innovator (the firms that optimally
integrate knowledge exploitation and exploration regardless
organizational boundaries) is considered as the most aggressive knowledge strategy. The firms pursuing an aggressive
strategy tend to outperform those competitors pursuing less
aggressive strategies over time.
Yeung et al. (1999) suggested that the firms must determine their knowledge strategy based on whether their efforts
are best focused on learning methods from direct experience or the experience of others and learning orientation of
exploration or exploitation. Accordingly, a framework was
proposed with four knowledge strategies, i.e., innovator, skill
acquirer, copier, and continuous improver, as indicated in
Figure 3. The innovator constantly seeks new ideas to do
their work within the industry. The skill acquirer encourages
employees to acquire new competencies. The copier mainly
learns by broadly scanning what other companies do. The
continuous improver primarily benchmarks itself, measuring
progress against the previous performance.
In summary, these various models are quite similar in the
procedure for defining knowledge strategies and practically
applicable in business with the defined knowledge strategies. In general, these models are mainly defined based

Aggressive

Unbounded

External

Internal Conservative
Exploiter
FIG. 2.

Innovator

Zacks knowledge strategy topology.

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791

Learn from
experience of others

Learn from
direct experience

Copier

Skill Acquirer

Continuous
Improver

Innovator

Exploitation

Exploration

advantage (Porter, 1980; Kettinger, Grover, Guha, & Segars,

1994; Tanriverdi, 2005). In practice, many executives are
also struggling to articulate the relationship between their
competitive strategies and intellectual resources and capabilities (Hansen et al., 1999; Zack, 1999a). Accordingly, we
may argue a link of competitive strategy to the strategy of
managing knowledge.
Hypothesis 1: Organizations classified as prospector, analyzer, or defender are likely to place emphasis on innovator,
skill acquirer, copier, or continuous improver.

FIG. 3. Yeung, Ulrich, Nason, and Glinows knowledge strategy typology.

Effect of Knowledge Strategy to Implementation Approach

on two classification variables, pattern of using knowledge (exploitation or exploration) and pattern of learning
method (internal or external experience). In particular, Zacks
framework attempts to define nine types of knowledge strategies in its topology. In fact, only two of them are clearly
defined in the strategy topology and the rest are left undefined. Both classification variables are described in a more
complex manner in this model, i.e., three discretely separated categories for each variable. For example, how do we
define our firm as an unbounded pattern of learning method?
This causes difficulty for its use in business practice. On the
other hand,Yeung et al.s framework is well defined with four
types of knowledge strategies in terms of two discretely separated categories for each variable. It would be concrete and
parsimonious for the identifications of the two variables
and knowledge strategy. For the purpose of simplifying
research design and interpretation later on, Yeung et al.s
framework would be our choice for defining the knowledge
strategies in this study.
Hypothesis development. Knowledge has been argued for
displacing natural resources, capital, and labor as the basic
economic resource in the new economy (Drucker, 1995;
Lee & Choi, 2003). Knowledge often created within the firm
is especially valuable because it tends to be unique, specific,
and tacitly held. Therefore, it is difficult for competitors to
imitate, making it strategically valuable. Knowledge from
outside of the firm, while being more abstract, more costly
to obtain, and more widely available to competitors, can provide a new thinking and context for benchmarking internal
knowledge. Commonly available external knowledge combined with unique internal knowledge can still result in new
and unique insight for a firm. As a result, knowledge has the
potential to link to a firms competitive advantage based on
the resource-based view of the firm (Mata, Fuerst, & Barney,
1995; Alavi & Leidner, 2001).
Moreover, commentators on contemporary themes of
strategic management stressed that a firms competitive
advantage will be mainly from its unique knowledge and
how it manages knowledge (Boisot, 1998; Nonaka & Teece,
2001). Thus, the strategy of managing knowledge can be
classified as the important source of a firms competitive
advantage. In essence, the achievement of a firms competitive strategy lies in the purpose of realizing its competitive
792

Implementation approach. Prior research in implementing

KM has been primarily focused on technological aspect to
support the management process of knowledge exploitation
and exploration. Insufficient attention has been given to organizational and people aspects, such as culture, commitment,
and reward system (Swan, Newell, & Robertson, 2000). They
argued that an information technology (IT)-based approach
to KM potentially attempts to codify tacit knowledge, but this
neglects the fact that some tacit knowledge cannot be easily
expressed and is probably difficult to codify (Tsoukas, 1996).
Alternatively, organizational, and people management practices need to be considered importantly for facilitating the
effective use of KM technology (Zack, 1999b). Specifically,
many researchers have elaborated the basic concept to discuss
the possible implementation approaches for practice.
Hansen et al. (1999) studied the KM practices of companies in several industries. When initially looking at consultants, they found that the firms did not take a uniform
approach to manage their knowledge. The consulting business employs two very different implementation approaches.
In some companies, the approach centers on information
technology. Knowledge is carefully codified and stored in
databases where it can be accessed and used easily by anyone in the company. They call this codification approach.
In other companies, knowledge is closely tied to the person
who created it and is shared mainly through direct personto-person contacts. They call this personalization approach.
To make this approach work, firms have to invest heavily
in building a network of people. Knowledge is shared not
only face-to-face but also by telephone, e-mail, and videoconference. The primary purpose of IT in such companies
is to help people communicate knowledge, not to store it
(Parent, Gallupe, Salisbury, & Handeliman, 2000). Furthermore, when they dug deeper for KM practices, they found that
effective firms excelled by focusing on one of the approaches
and using the other in a supporting role. This can be termed
an integration approach.
Bloodgood and Salisbury (2001) argued that the IT role in
KM, at its basic level, can be seen as embodying two general
capabilities with respect to knowledge: codifying knowledge
and creating networks. Knowledge may be codified into a
decision support or expert system by making it explicit. This
approach leverages the knowledge assets of an organization
as soon as possible, thereby enabling the organization to gain

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competitive advantage over competitors who transfer or learn

the knowledge more slowly. However, some knowledge has
greater value when kept in a less explicit or tacit form. As a
result, another capability involves not codifying the knowledge but helping firms employees with particular expertise
communicate easily and rapidly. One of the primary benefits
of tacit knowledge is its inimitability by competitors and thus
central to the firms competitive advantage (Nonaka, 1994).
Bixler (2002) discussed two different approaches for the
firms determining the emphasis on the access and reuse of
existing knowledge or on the capture of tacit knowledge.
Database technology is a tool enabling to support former
approach and collaborative environment with communication technology is developed to support later approach. If
an organizations strategy is to develop a more robust way
for employees to collaborate and capture tacit knowledge,
database technology may not be the best investment. In practice, the two approaches are not unique to the firms and the
differences could exist within the industries and in different
business units within the firms. Thus, the right choice between
the two approaches is a critical issue for contemporary KM.
Hypothesis development. Managing knowledge is difficult
with multifaceted concepts across functional and organizational boundaries (McInerney, 2002). A knowledge strategy,
which mainly describes the overall approach to effectively
develop and use knowledge resources and capabilities in an
organization, should be defined before physical implementation (Hansen et al. 1999; Hansen, 2002). To effectively
achieve KM, prior understanding is needed for defining
knowledge strategy and analyzing the role of IT in facilitating KM (Alavi & Leidner, 2001; Carlsson, 2003). Bixler
(2002) argued that a key perspective to developing an enterprise knowledge strategy lies in determining the right tools to
support KM. Tools are where the realities of KM emerge in
terms of the practical, well-designed and successful implementation. Thus, we can argue a relationship between knowledge managing strategy and IT-supported implementation
approach.
Hypothesis 2: Organizations pursuing innovator, skill
acquirer, copier, or continuous improver are likely to place
emphasis on codification, personalization, or integration.

Effect of Implementation Approach to Firm Performance

Firm performance. Measuring the expected benefits of KM
is a difficult task because its values will not be effectively
assessed without a deep understanding of organizational
operations and a continual and long-term monitor of the
occurred changes. Even more difficulty for the agencies of
public sector is because their outcomes are relevant to social
benefits, rather than specific financial profit. Both financial
measures, such as new product profitability and sale (Sinkula,
1994; Moorman & Miner, 1997) and nonfinancial measures,
such as time-to-market, market share, and new product innovativeness (Griffin & Page, 1993; Brockman & Morgan,

2003), are often used for knowledge-based performance.

Financial measures are more likely to be focused on a
short-term basis and may be significantly confounded by
many uncontrollable factors such as technological change,
economic fluctuation, and institutional policy. Alternatively,
nonfinancial measures with qualitative attributes in a longterm basis may be more stable in terms of the effect
of various external factors. These measures may provide
insight into the value-added aspect of the organizational
resources (Byrd & Turner, 2001; Melville et al., 2004; Wu &
Chen, 2006).
Moreover, many researchers have discussed the issue of
effective KM from the aspect of knowledge capabilities
and have further concluded the link between the capabilities and firm performance (Gold et al., 2001; Lee & Choi,
2003). As discussed in strategic management literature, organizational effectiveness is a measuring concept that has
not been well defined and likely to be more complex in
terms of its descriptions and dimensions than financial measures (Hart & Banbury, 1994). The outcomes of managing
knowledge resources are basically focused on the improved
organizational creativity, which is the key to the understanding of firm performance (Woodman, Sawyer, & Griffin, 1993;
Lee & Choi, 2003; Brockman & Morgan, 2003; Tanriverdi,
2005). This study was thus based on the summary of Gold
et al. (2001) from a comprehensive literature review for defining the key elements of organizational effectiveness. These
elements are improved ability to innovate, improved coordination efforts, rapid commercialization of new products,
improved ability to anticipate crises, quick responsiveness
to market change, and reduced redundancy of information
and knowledge. These criteria are mainly focused on a longterm basis and not tied to fluctuation in financial ratios.
Accordingly, they are more suitable for assessing the relative
contributions of KM.
Hypothesis development. A central tenet underlying KM
implementation is the association with firm performance
(Davenport et al., 1998; Gold et al., 2001; Lee & Choi,
2003; Tanriverdi, 2005). For example, Tanriverdi (2005)
investigated how IT-related assets are prepared and managed to support knowledge capabilities and, in turn, whether
and how knowledge capabilities impact firm performance.
Gold et al. (2001) suggested that knowledge infrastructure
and knowledge processes are two essential knowledge capabilities for effective KM and, further, performance realization. The knowledge processes include knowledge creation,
sharing, application, and integration. IT-supported implementation approaches codification, i.e., personalization, and
integration, are the basic approach or tool to support these
two knowledge capabilities (Zack, 1999b; Carlsson, 2003).
Thus, we may argue a relationship between IT-supported
implementation approach and firm performance.
Hypothesis 3: Organizations using codification, personalization, or integration are likely to positively impact various
indices of firm performance.

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793

Research Design
A survey research was used to collect empirical data. The
design of research is described below.

change, and reduced redundancy of information/knowledge.

A total of six items was defined in this scale.
Sample Firms and Respondents

Instrumentation
The instrument contains a five-part questionnaire as indicated in the Appendix. The first part uses a nominal scale,
while the rest use 7-point Likert scales.
Basic information. This part collected organizational characteristics, including industry, annual revenue, and number
of employees, together with respondents characteristics,
including education, age, experience, and position.
Competitive strategy. This part was adapted from the
instrument developed by Conant, Mokwa, and Varadarajan
(1990) with three constructs: entrepreneurial, administrative
and technological. Furthermore, entrepreneurial construct
was defined with four measuring items: product market
domain, success posture, surveillance, and growth. Administrative construct was defined with four measuring items:
dominant coalition, planning, structure, and control. And
technological construct was defined with three measuring
items: technological goal, breadth, and buffers. As a result, a
total of eleven items was defined for measuring this scale.
Knowledge strategy. This part was adapted from the instrument developed by Yeung et al. (1999) with two constructs:
the choice of learning methods (direct experience versus
experience of others) and the choice of learning orientations
(exploration versus exploitation). Furthermore, the former
construct was defined with five measuring items: speed of
environmental change, competitive strategy, slack resources,
current success of the organization, and ambiguity of technology. The latter construct was defined with six measuring
items: industry life cycle, technological trajectory, competitive strategy, potential payoff, resource commitment, and
certainty for return on investment. Thus, a total of eleven
items was defined for measuring this scale.
Implementation approach. This part was adapted from the
instrument developed by Hansen et al. (1999) with three constructs: economic model, IT support, and human resources.
The three constructs were used to distinguish the choice
of the two implementation approaches: personalization and
codification. Each construct was further defined with two
measuring items. Accordingly, a total of six items was defined
in this scale.
Firm performance. This part was adapted from the discussion of Gold et al. (2001) for the major contributions
of KM capabilities to organizational effectiveness, including improved ability to innovation, improved coordination
efforts, rapid commercialization of new products, improved
ability to anticipate crises, quick responsiveness to market
794

This study mainly aims at exploring KM implementation

from the perspective of competitive strategy. Specifically, it
involves strategic planning on knowledge resources and further needs the support of massive IT investment. Thus, it
was assumed that knowledge intensive industries would be
more likely to have this experience. Knowledge intensive
industries are described as being good at using knowledge
to provide unique products or services and, further, that
they are in a favorable position to create profit and gain a
sustained competitive advantage (Davis & Botkin, 1994).
Organization for Economic Cooperation and Development
(OECD) defines knowledge intensive industries to include
both manufacturing and service industries. Manufacturing
industries comprised the industries of aerospace, computer
and office automation equipments, pharmaceutics, communication, semi-conduct, scientific instrument, automobile,
electrical machinery, chemical engineering, transport equipment, and so on. Service industries comprised the industries
of software service, banking and insurance, transportation
and warehouse, consultant service, healthcare service, legal
service, and so on.
Accordingly, a study sample of 550 manufacturing firms,
150 service firms, and 100 banking and financial firms
was randomly selected from the listings of 2006 for the
largest 1000 manufacturing firms, 500 service firms, and 100
banking, and financial firms in Taiwan. Furthermore, chief
knowledge officers (CKO) were the persons more likely to be
familiar with the KM practice in firms. If CKO was not available in some firms, chief information officers (CIO) should be
the appropriate persons to be responsible for the task. Thus,
either CKO or CIO was selected as the major respondents
in this survey while, at the same time, being able to avoid
response bias by using a single informant.
A total of 800 surveys for the sample was sent to either
the CKO or the CIO for the first time. 96 respondents replied,
with four incomplete responses deleted, resulting in 92 valid
respondents during the first 3-week period. Improving survey returns were followed up for non-respondents by a query
using telephone or letter to understand their intention to continuously participate in the survey. After that, we judged
their answers and decided that 200 surveys for the nonrespondents were sent out for the second time. 37 respondents
replied, with one incomplete response deleted, resulting in 36
valid respondents during the second 3-week period. A total
of 128 respondents were collected for a 16.0% of response
rate. The seemingly low response rate raised the concern
about non-response bias. A test for non-response bias was
conducted using two responding subsamples: early and late
respondents. The two subsamples were correlated on their
annual revenue, number of employees, and working experience. This result indicated no systematic non-response bias
in the responding sample.

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TABLE 1.

Construct reliability, convergent validity, and discriminant validity.

Squared correlation

Scale
Competitive strategy

Knowledge strategy
Implementation approach

Firm performance

Construct

Factor loading

Composite reliability

AVE

En/Ld/Ec

Entrepreneurial
Administrative
Technological
Learning methods
Learning orientation
Economics
IT support
Human resources

0.850.88
0.810.83
0.820.92
0.800.82
0.810.85
0.810.85
0.800.82
0.830.90
0.790.88

0.95
0.92
0.96
0.92
0.90
0.92
0.90
0.89
0.87

0.78
0.83
0.81
0.81
0.78
0.81
0.78
0.72
0.73

0.58
0.46

0.50

0.52
0.46

Ad/Lo/Is

Te//Hr

0.55

0.41

Note. En indicates entrepreneurial; Ad, administrative; Te, technological; (Ld), learning method; Lo, learning orientation; Ec, economics; Is, IT support;
and Hr, human resources.

Scale Validation

Demographic Characteristics

First, pretest for the instrument was examined by practitioners and academicians in this area, including translation, wording, and structureits initial reliability and
validity should be in an acceptable level. Confirmatory
factor analysis (CFA) with AMOS software was used for
scale validation. First, a measurement model should be
assessed for a goodness of model-fit. The criteria were as
follows: chi-square/degree of freedom (2 /df) should be less
than 3; adjusted goodness-of-fit index (AGFI) should be
larger then 0.8; goodness-of-fit index (GFI), normed fit index
(NFI), and comparative fit index (CFI) should be all greater
than 0.9; and root mean square error (RMSE) should be
less than 0.10 (Henry & Stone, 1994). Next, reliability was
evaluated by the index of composite reliability. Convergent
validity was examined by three criteria: item loading ()
greater than 0.7 and statistically significant, composite reliability larger than 0.8, and average variance extracted (AVE)
for each construct higher than 0.5 (Fornell & Larcker, 1981).
Discriminant validity was assessed by the measure that each
constructs AVE is larger than the square of its correlations
with other constructs.
There are four measurement models for the structure of
this questionnaire. The measurement model of knowledge
strategy indicated a poor model-fit. AGFI (0.77) and GFI
(0.88) were below the acceptable levels. It also showed
that one item in the construct of choice of learning orientation had factor loadings lower than 0.7 (as presented
in the Appendix, the second item of this construct). The
literature suggested that the degree of model-fit could be
improved by redefining the model with the one item deleted
(Segars & Grover, 1993). The reevaluation result showed a
good model-fit with 2 /df (0.96), AGFI (0.82), GFI (0.91),
NFI (0.92), NNFI (0.93), and RMSE (0.03). The other three
measurement models, competitive strategy, implementation
approach, and firm performance, all indicated a good modelfit. Furthermore, indicators for reliability, convergent validity,
and discriminant validity in terms of the four measurement
models were all above the acceptable levels, as reported in
Table 1.

Demographics of the responding firms and respondents

were summarized in Table 2. The responding firms were statistically identical to the known profiles of the study sample.

TABLE 2.

Demographic characteristics.
Frequency

Percent (%)

Industry type
Manufacturing
Financial and banking
Service

81
28
19

63.3
21.9
14.8

Annual revenue
<5000M
5000M 10000M
10000M 50000M
50000M 100000M
>100000M

40
45
25
13
5

31.2
35.2
19.5
10.2
3.9

No. of employee
<1000
1000 2000
2000 5000
>5000

18
71
20
19

14.1
55.5
15.6
14.8

Working experience
<10 years
10 20 years
>20 years

30
55
43

23.4
42.9
33.7

Education level
PhD
Graduate college
College
High school

10
50
63
5

7.8
39.1
49.2
3.9

Position
Chief information officer
Chief knowledge officer
Manufacturing executive
Financial executive

74
22
27
5

57.8
17.2
21.1
3.9

Age
<30
30 40
40 50
>50

8
35
40
45

6.3
27.3
31.2
35.2

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This would raise external validity of the data collection process and the generalizability of the research findings as well.

Analysis of Knowledge Strategy

Analysis and Findings

Analysis of Competitive Strategy
This study would conduct an exploratory analysis to
empirically examine the Miles and Snows typology of
strategies. The cluster analysis with hierarchical and nonhierarchical procedures in combination was used to group the
responding firms based on the entrepreneurial, administrative, and technological variables. The hierarchical procedure
with Wards algorithm initially identified the appropriate
number of clusters and nonhierarchical procedure with
K-means further adjusted or fine-tuned the previously
obtained results. This analysis finally confirmed that a threecluster solution was the best choice, with firm sizes of 29, 57,
and 42 in clusters 1, 2, and 3, respectively. The three-cluster
solution implied a fact in practice. The sample firms in this
study were mainly attributed to larger firms in the industries
and a large proportion of these firms would maintain a welldefined strategic mechanism for market competition. A firm
with reactor strategy indicates a lack of any clear strategy and
responds only to competitive pressure in an accidental manner. As a result, the reactor strategy would not be significantly
defined in the classification.
To further understand the three clusters in terms of the
Miles and Snows strategic types, Scheffes method for multiple pair-comparisons was used to analyze the differences
of their group means. Clusters 1, 2, and 3 were basically
presented in a descending order in terms of their group
means and, thus, can be distinctively defined as prospector, analyzer, and defender strategies in terms of the Miles
and Snows strategic topology. The percentage distributions
for the strategies of prospector, analyzer, and defender were
22.6%, 44.5%, and 32.9%, respectively. The reason behind
this may be discussed as below. Certainly, the firms with
knowledge intensive properties tended to be more innovative
in products or services to quickly respond market change.
More specifically, their major goal should be currently
focused on exploiting marketing opportunities to provide
appropriate products rather than on exploring new marketing opportunities to offer innovative products. Thus, there
were a high proportion of the firms toward adopting the analyzer strategy (44.5%). The prospector strategy would be the
next goal to pursuit for the firms in Taiwan. In order words,
most firms were currently more likely to maintain a relatively
TABLE 3.

Total

796

Based on the Yeung et al.s framework, the responding

firms were clustered by the following procedure. The firms
were clustered into the continuous improver, while both the
value of learning method and the value of learning orientation
were less than four (mean value) in the 7-point Likert scale.
The skill acquirer was identified with the values of the
two variables greater than four. The innovator and copier
were identified with the values of the two variables either
less than four or greater than four. The percentage distributions for the innovator, skill acquirer, continuous improver,
and copier were 25.0%(32), 21.9%(28), 21.1%(27), and
32.0%(41), respectively. Basically, the results reported similar rates among them except for the copier. One third of the
firms were externally oriented rather than internally focused
on knowledge generation. Their knowledge was widely available to competitors and was difficult to keep uniqueness
and rareness. Their competition in the market was mainly
based on lower cost rather than differentiation of the products. Nevertheless, many externally oriented organizations
can use various channels or mechanisms for communication
with their customers to exchange knowledge. These channels or mechanisms comprise user groups, Web sites, e-mail,
customer care centers, conferences, and so on. These firms
would create better competitive performance among competitors even with lower cost and at least maintain an unstable
growth in the market.
For testing the relationship between competitive strategy
and knowledge strategy, a contingency table based on the
above analysis was summarized in Table 3 because both
variables were with categorical attributes, i.e., competitive
strategy with three discrete types and knowledge strategy
with four discrete types. Therefore, Hypothesis 1 can be
tested for their association using Table 3 with 2 statistic.
Although the testing result showed 2 = 18.2 with df = 6,
the probability was less than 0.01. Thus, Hypothesis 1 was
accepted. Moreover, the impacts of competitive strategies
across the knowledge strategies were further examined for
providing insight to practitioners. For the firms adopting
the prospector strategy, there were a high proportion of the
firms adopting the innovator strategy (55.2%), while the rates
of adopting other knowledge strategies were relatively low,
around 11%20%. This phenomenon is quite obvious and
may be explained below.

Relationship between competitive strategy and knowledge strategy.

hhh
hhhKnowledge strategy
h
Competitive strategy hhhhh

Prospector
Analyzer
Defender

stable base of products and customers in the market and did

not intend to be the first movers in the market.

Innovator

Skill acquirer

Continuous improver

Copier

Total

16 (55.2%)
11 (19.3%)
5 (12.0%)

6 (20.7%)
18 (31.7%)
4 (9.5%)

3 (11.0%)
14 (24.5%)
10 (23.8%)

4 (13.1%)
14 (24.5%)
23 (54.7%)

29 (100%)
57 (100%)
42 (100%)

32

28

27

41

128

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First, the firms following the prospector strategy put

emphasis on searching new marketing opportunities and
innovation in products or services. To pursuit this strategy,
the firms require a special type of knowledge strategy capable of continuously exploring new knowledge in processes,
organizational forms, and technologies, as well as learning
from new direct experience internal to the firm. The innovator
strategy would be the best choice for the firms adopting the
prospector strategy. Next, while the analyzer strategy intends
to maintain a stable base but selective innovation of products
or services and tries to balance cost and differentiation in market competition, this strategy with mixed goals needs a wider
approach for KM. As a result, the rates for the firms adopting
the four knowledge strategies were not statistically notable.
Finally, the major focus of the defender strategy is on seeking
operating efficiency to lower cost while maintaining relatively stable product and market domains. Therefore, a high
proportion of the firms (54.7%) adopted the copier strategy
for emphasizing the learning from what competitors did.
Analysis of Implementation Approach
The same cluster analysis, as described previously, was
used to examine the types of implementation approaches
based on three grouping variables: economics, IT support,
human resources. This analysis finally confirmed that a fourcluster solution was the best choice, with firm sizes of
45(35.1%), 35(27.3%), 36(28.1%), and 12(9.5%). The four
clusters can be distinctly identified as codification, personalization, integration, and others by the method of multiple
pair-comparisons. The adoption rates for the three approaches
were not significantly different, but the codification approach
had the highest adoption rate among them, which may be
explained below. There were a high proportion of the firms
(63.3%) from manufacturing sector and this type of sector
was currently focused on production-related activities rather
than on new product design and development. These activities
were mainly classified as routine-based and well-documented
practices and the knowledge required for these activities, usually in explicit form, should be codified and stored in database
for easy access and reuse by anyone in the company.
For testing the relationship between knowledge strategy
and implementation approach, a contingency table based on
the above analysis was summarized in Table 4 because both
variables were with categorical attributes, i.e., both variables
with four discrete types. Thus, Hypothesis 2 can be tested for
their association using Table 4 with 2 statistic. While the
testing result showed 2 = 26.7 with df = 9, the probability
TABLE 4.

```

Analysis of Firm Performance

This step evaluates firm performance after the previously
consecutive decisions. The data for the relationship among
the implementation approach and the six types of firm perwere summarized in Table 5. We used t statistics

formances
x
x , x
t = s/

= 4 in a 7-point Likert scale for each approach

n
to examine their significance. The testing results were all
reported with significance. This indicated a fact that an appropriate choice of the implementation approaches in a firm
would have positive effect on the KM-related firm performance. As a result, Hypothesis 3 was accepted. While further
looking at the six types of firm performances across each of
the three implementation approaches, the improved coordination efforts (ICE) were best performed on the codification

Relationship between knowledge strategy and implementation approach.

Implem. appro.
```
Knowledge strat. ````
Innovator
Skill acquirer
Continuous improver
Copier
Total

was less than 0.01. Thus, Hypothesis 2 was accepted. Moreover, the impacts of knowledge strategies across the implementation approaches were further examined for providing
insight to practitioners. For the firms adopting the innovator
strategy, there were a high proportion of the firms adopting the
personalization approach (53.2%) and a medium proportion
of the firms adopting the integration approach (31.2%). This
strategy primarily has emphasis on exploring new knowledge
by the exchange of tacit experience among employees. Therefore, the personalization approach was the approach being
able to provide a collaborative environment to facilitating
the exchange of their idea. Next, the integration approach
was discussed previously as often focusing on one of the two
approaches, in particular, the personalization approach in this
study, and using the other in a supporting role, in particular,
the codification approach in this study. This may explain the
reasons for the relationships.
Similarly, the skill acquirer strategy indicated a high proportion of the firms adopting the personalization approach
(50.0%) because this strategy places emphasis on the exploration of new knowledge rather than on the exploitation
of existing knowledge. On the other hand, the continuous
improver and copier strategies reported a similar pattern for
almost 50% of the firms adopting the codification approach.
Both knowledge strategies are mainly centered on exploiting existing knowledge internal or external to the firm,
and, thus, the codification approach is more appropriate to
allow employees to easily search for and retrieve codified
knowledge at any time. In addition, the continuous improver
strategy was also correlated to the adoption of integration
approach (37.0%) because this strategy encourages the learning from direct experience in developing new knowledge.

Codification

Personalization

Integration

Others

Total

5 (15.6%)
6 (21.4%)
13 (48.2%)
21 (51.2%)

17 (53.2%)
14 (50.0%)
2 (7.4%)
2 (4.9%)

10 (31.2%)
6 (21.4%)
10 (37.0%)
10 (24.4%)

0 (0.0%)
2 (7.2%)
2 (7.4%)
8 (19.5%)

32 (100%)
28 (100%)
27 (100%)
41 (100%)

45

35

36

12

128

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797

TABLE 5.

Relationship between implementation approach and firm performance.

hhh
hhh

performance
hhFirm
hhh
hh
h

Implementation approach

IAI

ICE

RCNP

IAAC

RMC

RRI

Overall
average

Codification
Personalization
Integration
Others

5.53
6.35
5.98
2.56

6.32
5.52
6.01
2.70

5.53
6.15
6.26
3.18

5.56
6.12
6.05
3.09

5.48
6.20
6.12
3.28

6.21
5.52
5.86
2.78

5.77
5.97
6.05
2.93

Note. Cell value is average for cluster sample. IAI indicates improved ability to innovation; ICE, improved coordination efforts; RCNP, rapid commercialization of new products; IAAC, improved ability to anticipate crises; RMC, quick responsiveness to market change; and RRI, reduced redundancy of
information/knowledge.

approach, the improved ability to innovation (IAI) on the

personalization approach, and the rapid commercialization
of new product (RCNP) on the integration approach, which
may be explained below. The main purpose of the codification
approach lies in facilitating organizational communication
through well-documented rules stored in database. The personalization approach would primarily provide help to the
exchange of the ideas through direct people-to-people contacts with IT network support. The integration approach,
while considering one of the two approaches as a major
role and the other in a supporting role, tended to produce
a type of performance with a mix of the former two types of
performances, i.e., rapid commercialization of new product.
Discussions
In general, while the firms adopt different competitive strategies in the market, i.e., prospector, analyzer, and
defender, the choice of knowledge strategies will be different for effectively managing their knowledge resources, i.e.,
innovator, skill acquirer, continuous improver, and copier,
and, in turn, the implementation approaches for building
knowledge infrastructures and capabilities will be significantly distinctive, i.e., personalization, codification, and
integration. As a result, the KM-related firm performance,
while strictly following the process, will be well achieved.
The summarized results were reported in Table 6.
More specifically, the firms that follow the prospector
strategy in the market should consider the innovator as
the primary knowledge strategy for exploring internal new
knowledge in developing innovative products. Seeking innovation is the major concern of the firms employees, and, as
a result, they are in a position to often share important information. This knowledge strategy should be best supported
by a personalization approach. The analyzer strategy maintains a relatively stable base of products or services while
TABLE 6.

selectively being the first movers in the market. Therefore,

both exploiting internal knowledge and exploring external
knowledge to the firms are necessary for this target. Both
the skill acquirer and the continuous improver are the important knowledge strategies to support the accomplishment of
analyzer strategy. Subsequently, the personalization approach
is properly selected to support the skill acquirer and the
codification or integration approach to support the continuous improver. The defender strategy is mainly for providing
relatively standardized products with lower cost in the welldefined market. This strategy is typically a type of follower
strategy in the industry and the copier is the primary knowledge strategy to support this strategy. The employees in the
firms broadly scan and seek existing knowledge from external
sources and the knowledge is further codified and stored in
well-documented forms where it can be accessed and shared
easily in the companies. The codification approach is suitable
for supporting the copier strategy.
Some executives who tried to excel at both approaches
risked failing at both, while other executives had run into
serious trouble for failing to stick to one approach. Moreover, some companies were effective on KM by pursuing
one approach predominantly and using the second approach
in a supporting role. In practice, the exact procedure remained
ambiguous for effectively guiding the appropriate choice of
the implementation approaches (Hansen et al., 1999; Bixler,
2002; Bloodgood & Salisbury, 2002). More important, this
strategy-based process for KM practice demonstrated an
important value on providing useful guidance to the choice
of the appropriate implementation approach. Initially, if
executives of the firms fail to determine the right competitive strategy, employees of the firms will be no indication
of the priorities for seeking the most useful knowledge to
the firms immediate needs. This study also showed that
while the firms, in particular, for knowledge-intensive industries failed to select an appropriate implementation approach

Summary of the process-based analysis.

Emphasis on knowledge
strategy

Emphasis on implementation
approach

Prospector
Analyzer

Innovator
1. Skill acquirer
2. Continuous improver

Defender

Copier

Personalization
1. Personalization
2.1. Codification
2.2. Integration
Codification

Competitive strategy

798

JOURNAL OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE AND TECHNOLOGYApril 2009
DOI: 10.1002/asi

Firm performance
5.97
5.97
5.77
6.05
5.77

for their KM practice, their firm performance would not

be well achieved. This further confirmed that a concrete
stage-based process for KM practice, including competitive
strategy, knowledge strategy, and implementation approach,
was important to the practitioners.
Conclusions and Suggestions
Companies are coming to view knowledge as the most
valuable and strategic resource to be competitive in the
new economy. Effective firms on using knowledge resources
require KM models or solutions. The main focus of the efforts
has been on technological perspective to enhance an organizational ability to create, store, and use knowledge. The organizations should first determine what knowledge resources are
valuable to the competition before making the investment
of the knowledge. They must strategically assess the value of
knowledge resources and further base the output on defining
the knowledge strategy. This knowledge strategy is further
translated into technical infrastructure or implementation
approach to support KM practices, including creation, conversion, store, and use, for both tacit and explicit knowledge
forms. The firm performance is finally presented as the results
of this implementation process. Accordingly, this research
proposes a process-based framework based on a strategic
perspective for effective KM. Empirical examination has
concluded useful results for practitioners.
The implications for practitioners are discussed as below.
Because KM as a conscious practice was still in a growing
manner, executives were lack of successful models that they
could use as guidance. Clearly, empirical findings as summarized in Table 6 have shown certain decision patterns on effective KM for the practitioners, such as prospector-innovatorpersonalization and analyzer-skill acquirer-personalization
patterns. These patterns eventually would reach better firm
performance through effective KM. The practitioners would
be suggested to use the process model to plan their KM
projects in the future. The implications for researchers are
noted below. Although many researchers explored this issue
from knowledge infrastructure and process within organizational boundary, this study has approached it from the
perspective of the competitive strategy. While working with
this perspective, this study has shown the excellent capability
on defining knowledge strategy and, in turn, implementation
approach to effectively manage knowledge resource. In addition, a complete stage-based process for implementing KM,
while most research in this issue just partially discussed their
relationships among the four relevant components, could be
emerging as a new theoretical base.
Furthermore, subsequent research can be based on this
foundation. First, this research was based on survey-based
data. A case study with longitudinal observations can be
conducted for deeper understanding the validity of this framework in practice. Second, because this research was sampled
from a combination of diversified industries, the conclusions
were more general and comprehensive. Future research can
be targeted toward the particular and important industry,

for instance, financial and banking industry, to understand

their differences and similarities. This would provide more
insight for the practice of this industry. Third, although this
study was based on the Miles and Snows strategy typology,
further research can alternatively use the Porters strategy
typology as well, i.e., cost leadership, differentiation, and
focus. This would offer the practitioners with different views
on competitive strategies because this typology was also
widespread in practice.
Finally, although this research has produced some useful
results, a number of limitations may be inherent in it. First, we
assume that our approach to investigate KM practices in organizations was based on the closed rational system model as
opposed to the open natural system model (Kling & Jewett,
1994). Closed rational system model focuses on the rationality of organizational behavior by pursuing participants goals
and actions defined within a particular organizational system.
Second, the response rate was lower than desirable, despite
the various efforts to improve it, which may be due to insufficient experience on strategy-based implementation issues
for the current firms in Taiwan. Nevertheless, the responding firms showed no systematic non-response bias and were
well representative of the sample firms. Third, while CKOs
or CIOs were the major respondents in the survey, however,
manufacturing and financial executives were counted to a
rate of 25% of the total respondents. On the other hand, this
would avoid the bias from a single informant and further
increased the explainable variances on the variables of interest. Although the majority of the responding firms (63.3%)
were attributed to manufacturing sectors, the viewpoint from
their manufacturing executives should be well complementary with that of the CKOs or CIOs. Finally, although senior
management from larger firms was always busy for their
work, some questionnaires may have been completed by
subordinates, and, therefore, the data may have some biases.

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JOURNAL OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE AND TECHNOLOGYApril 2009
DOI: 10.1002/asi

Appendix
Part 1. Basic Information
1. Industry type:
2. Annual revenue (Millions):
<5000M
5000 10000M
10000 50000M
50000 100000M
3. Number of employee (Persons):
<500
500 1000
1000 5000
>5000
4. Education:
High school
College
Graduate college
Ph.D.
Other
5. Working experience:
<5 years
5 10 years
10 15 years
15 20 years
>30 years
6. Age:
<30 years
30 40 years
40 50 years
50 60 years
>60 years
7. Position:
1: Strongly disagree
5: Somewhat agree

2: Moderately disagree
6: Moderately agree

3: Somewhat disagree
7: Strongly agree

>100000M

4: Neutral

Part 2. Competitive Strategy

Entrepreneurial
1. Our firm provides products to the marketplace in an innovative, continually changing,
and broad manner.
2. Our firm has a reputation for being innovative and creative in the marketplace.
3. Our firm continuously monitors the changes and trends in the marketplace.
4. The increase in demand is due most probably to our practice of aggressively entering
into new markets with new types of product.
Administrative
1. Our staff tends to concentrate on developing new products and expanding into
new markets.
2. Our staff prepares for the future by identifying new trends and opportunities in the
marketplace for creating new product.
3. Our organizations structure is primarily market or customer-oriented in nature.
4. Our organizations structure is best described as decentralized and participatory in
encouraging the members to be involved.
Technological
1. Our technological goal is to insure that people, resource, and equipment required to
develop new products are available and accessible
2. The technological skills of our managerial employees are diverse, flexible, and enable
change to be created
3. The technological skills of our managerial employees are able to consistently
develop new products and new markets.

Part 3. Knowledge Strategy

Choice of learning method
1. It is useful for our firm to learn from the experience of others while external environment
does not change rapidly.
2. The competition for our firm is mainly through cost/price rather than product innovation
and differentiation.
3. It is more likely to learn from the experience of others while our resource is more limited.
4. It is more likely to learn from the experience of others if our performance is not
satisfactory.
5. It is better for our firm to learn from the experience of others while there is ambiguous,
not sure of cause-effect relationship in the running of a successful business.

JOURNAL OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE AND TECHNOLOGYApril 2009
DOI: 10.1002/asi

801

Choice of learning orientation

1. Our firm is attributed to young industry, competing for dominant and innovative design.
2. Our firm focuses on developing new competency-destroying innovations rather than
competency-enhancing innovations.
3. Our firm focuses on creating differentiated products and technological leadership.
4. The potential payoff for our firm is comparatively huge as the first mover in the market.
5. The resource commitment from senior management is comparatively high in our firm.
6. The uncertainty for return on investment is comparatively high in our firm.

Part 4. Implementation Approach

Economics
1. The focus of managing knowledge asset in our firm is on reusable feature.
2. The focus of managing knowledge asset in our firm is on generating large overall
revenues rather than high profit margins.
IT support
1. Our firm focuses on developing an electronic document system that codifies, stores,
disseminates, and allows reuse of knowledge.
2. Our firm invests heavily in IT and the goal is to connect people with reusable codified
knowledge.
Human resource
1. Our firm trains people in groups and through computer-based distance learning.
2. Our firm rewards people for using and contributing to document database.

Part 5. Firm Performance

1.
2.
3.
4.
5.
6.

Our firm has improved its ability to innovate new products.

Our firm has improved its ability to coordinate the efforts of different units.
Our firm has improved its ability to rapidly commercialize new products.
Our firm has improved its ability to anticipate surprises and crises.
Our firm has improved its ability to be responsive to new market change.
Our firm has improved its ability to reduce redundancy of information and knowledge.

802

JOURNAL OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE AND TECHNOLOGYApril 2009
DOI: 10.1002/asi