Beruflich Dokumente
Kultur Dokumente
DOI: 10.1002/kpm.1570
RESEARCH ARTICLE
1
Faculty of Management, Univerza na
Primorskem, Koper, Slovenia The paper presents a conceptual model of factors affecting knowledge management
2
Ekonomska fakulteta Bihać, Univerza v effectiveness and determines whether knowledge management exerts a positive
Bihaću, Bihać, Bosnia and Herzegovina
3
impact on business performance in trade enterprises of Bosnia and Herzegovina.
Ekonomski fakultet, Evropski univerzitet u
Brčkom, Brčko, Bosnia and Herzegovina Research data have been collected through a survey. The research sample was com-
Correspondence posed of 317 Bosnian companies that employ from 10 to 600 employees. Collected
Roberto Biloslavo, Faculty of Management,
Univerza na Primorskem, Cankarjeva 5, Koper
data were analysed by use of factor analysis and structural equation modelling. This
6000, Slovenia. is the first research carried out to prove influence of some organisational factors on
Email: roberto.biloslavo@fm‐kp.si
knowledge management effectiveness in developing country such as Bosnia and Her-
zegovina by use of structural equation modelling. The research results suggest that
organisational culture mediates the impact of human capital, information technology,
organisational structure, and leadership on knowledge management effectiveness and
confirm the hypothesis that the latter influences financial and nonfinancial indicators
of business performance. The findings carry theoretical implications for knowledge
management literature as they extend the scope of research on knowledge manage-
ment from examining a set of independent organizational factors to examining a sys-
tem‐wide mechanism that connects organisational elements and knowledge
management effectiveness. The results of this study also provide a practical reference
for the business when the latter considers investment into knowledge management
system development, thus increasing their chance for success especially within devel-
oping countries.
Knowl Process Manag. 2018;1–12. wileyonlinelibrary.com/journal/kpm Copyright © 2018 John Wiley & Sons, Ltd. 1
2 BILOSLAVO ET AL.
and how is this related to business performance in trade enterprises of 5. Weak knowledge about intellectual property rights and lack of
Bosnia and Herzegovina (BiH). This last issue is critically important transparent rules that create gaps and inefficiencies in innovation
because investments in developing information and knowledge man- systems.
agement systems are financially demanding and often subject to mar-
ket failure (Chua & Lam, 2005; Frost, 2014). According to Arrow According to Bartlett et al. (2012), all of the above weaknesses
(1971), production of knowledge and its acquisition is a risky activity, are very much present in BiH. BiH is the third country in size that
especially in the uncertain environment such as the one that was established in the area of former Yugoslavia. After the war,
characterised the transition economies (Bartlett, Čičić, & Ćulahović, which lasted from 1991 to 1995, BiH experienced a complete stand-
2012). still, much worse than was experienced in other former Yugoslav
This article is structured as follows: the first and second parts Republics. During this period, most companies were completely
cover theoretical review, the third part focuses on creation of the con- destroyed due to war operations, and there was no new investment.
ceptual model of factors that affect knowledge management, and the Most Bosnians, especially those with higher education, migrated
fourth part contains a discussion of empirical data on different key around the world. After the war, the country tried to put itself on
factors affecting effectiveness of knowledge management and conse- the “own feet,” but with a large backlog in social and economic
quently business performance of companies. development. In BiH is still seen stagnation in science, education,
leadership, decision‐making, and economic and sustainable develop-
ment (European Commission, 2010). According to Ateljevic, O'Rouke,
2 | KNOWLEDGE MANAGEMENT IN A
and Todorovic (2004), many transformational models that show to
D E V E L O P I N G E C O N O M Y : A CA S E OF B I H
be relevant in different international context have not been effective
in BiH, due to their lack of a holistic, equitable, and future‐oriented
Knowledge management (KM) is an interdisciplinary business prac-
approach. This finding shows how difficult and complex the socio‐
tice, which roots lie in several disciplines, including business, econom-
economic situation in BiH was and still is. However, BiH is one step
ics, psychology, management, and IT (Skyrme, 1999). Chou, Chang,
closer to joining the European Union (EU) since it formally applied
Cheng, and Tsai (2007) define knowledge management as processes
for membership in the February 2016. And yet it will remain a
and practices pertaining to creation, transfer, dissemination and appli-
candidate country until it makes more progress in implementing
cation of knowledge, skills, and experience. On the other hand, Čater
agreed laws and policies. In practice, for businesses, this entails a
(2001) defines knowledge management as part of the entire manage-
need for development of know‐how on EU requirements, but
ment process that focuses on systematic analysis, planning, collection,
especially competencies related to business internationalisation,
creation, dissemination, storage, and utilisation of organisational
cost‐efficiency, human resource management, and knowledge
knowledge. This process transforms human knowledge into structural
management (Madžar, 2015).
capital in order to develop competitive advantage and achieve the
The potential of knowledge management to improve efficiency
core organisational goals (Čater, 2002). Based on different definitions,
and innovation capability has been often cited as a key source of
knowledge management can be defined as a systematic approach
competitive advantage (Rahimli, 2012), even more is this important
that involves an entire organisation and requires a synergy between
for companies established in developing countries. Bosnian companies
the processing of data and information, with the support of informa-
are characterised by some organisational weaknesses regarding their
tion–communication systems, and creativity and innovative capacities
potential for development of effective knowledge management as
of people. In its narrowest sense, knowledge management is the abil-
long and slow information flow that prevents effective internal
ity to exploit intellectual capital with the aim of achieving
communication and change initiatives, bureaucratic organisational
organisational goals (Rubenstein‐Montanoa, Buchwalterb, &
culture that does not support innovation and knowledge exchange, tall
Liebowitz, 2001), and a formalised and active approach to manage-
organisational structure with an imbalance between competency,
ment and optimisation of knowledge resources in an organisation
authority and responsibility, and low level of knowledge management
(Wong & Aspinwall, 2005).
competencies among top management (Djonlagic, Delic, & Kovacevic,
According to Mytelka and Oyeyinka (2003), there are five sys-
2013). Beside that, Bosnian companies have also lack of available
temic weaknesses common to developing and transition countries
capital. Therefore, Bosnian companies must do more with less that
related to knowledge management:
means manage knowledge with limited resources and within evident
organisational constraints. The challenge for Bosnian companies, as
1. Organisational rigidities hinder adjustments conducive to acquir-
ing knowledge. for other companies in developing countries, is to effectively capture
knowledge embedded in people's head and work practice and
2. Suboptimal knowledge networks limit interactions between criti-
leverage it throughout the organisation. Development of relevant
cal business ecosystem actors.
competencies in the field of knowledge management can represent
3. There is a strong systemic inertia as a result of self‐reinforcing one of the key drivers for development of Bosnian companies and
obsolete business networks that fear change. indirectly for economic growth of the country (Drašković, Jovovic,
4. Weak connections between businesses and research and training Draškovič, & Jereb, 2013). This is especially true for trade enterprises,
facilities that supply skills and knowledge production unrespon- which are the largest contributor to BiH's GDP based on the World
sive to business needs. Bank's data.
BILOSLAVO ET AL. 3
Davenport, De Longand, and Beers (1998) identify eight factors that Figure 1). The model included six hypotheses (H1–H6) that repre-
are common to all effective knowledge management projects. Skyrme sented the six key factors and their influence on knowledge manage-
(2000) underlines the following key factors that affect effectiveness of ment (H1–H6) and two hypotheses (H7–H8) that represented a
knowledge management: business strategy, knowledge on knowledge, positive impact of knowledge management effectiveness on financial
integration of vision and organisation, leadership, a systematic knowl- and nonfinancial indicators of the company's business performance.
3.2 | Impact of knowledge management on business to successfully use structural equation modelling, validation of the
assumptions with factor analysis was carried out beforehand and then
performance
structural equation modelling was used to empirically validate the
Anantatmula and Kanungo (2006) argue that it is very important to assumptions. Validation of the conceptual model provided an insight
measure business results of knowledge management as they can serve into general adequacy of the proposed model and possible improve-
as an excellent basis for planning future investments in such activities. ments to be done.
In similar way, Wiig (1997) emphasises that the purpose of knowledge
management is to maximise effectiveness of activities related to
4.1 | Questionnaire
knowledge and maximise profitability of return on assets invested in
knowledge. The impact of knowledge management on business per- For the purposes of the empirical research, a questionnaire was
formance has been studied by numerous authors, who have designed. The questionnaire was divided into three sections. The first
4 BILOSLAVO ET AL.
section included some general questions about organisation involved. TABLE 2 Test for normal distribution of knowledge management
The second section aimed at determining the influence of individual elements
factors. The third and last section was related to knowledge manage- Knowledge Shapiro–Wilk
ment and organisational effectiveness. A more detailed description management
elements Statistics df Sig.
of the questionnaire applied is given in Appendix A.
KM1 0.76 317 0.00
The questionnaire was first tested on 10 managers of Bosnian
KM2 0.75 317 0.00
companies; they were subsequently also included in the study. The
KM3 0.81 317 0.00
purpose of testing was to validate the questionnaire and collect addi-
KM4 0.75 317 0.00
tional information. Based on the feedback, some questions related to
KM5 0.82 317 0.00
leadership and organisational culture was slightly changed. In terms
KM6 0.75 317 0.00
of influence of each factor (organisational culture, leadership, informa-
tion technology, reward system, human capital, and organisational
structure), we assessed individual factors in relation to knowledge
4.4 | Structural equation modelling
management effectiveness. The financial indicator (FI) of business per-
formance was measured by profitability. The nonfinancial indicator 4.4.1 | General adequacy of the model
(NFI) of the business performance was assessed by market share. The purpose of assessing the general part of the model is to determine
Respondents were asked to rate how true is the given statement for the degree of the entire model's consistency with the empirical data.
their organisations using a 5‐point Likert‐type scale from 1 (not at When assessing the model's general adequacy, consistency of the
all) to 5 (completely). model with available empirical data is also determined. The model is
assessed with several adequacy measures as presented in Table 4.
General acceptance of the model is assessed in terms of several
4.2 | Sample dimensions. From the results, it is evident that values for certain ade-
quacy measures are adequate; others are less than adequate.
The empirical study was carried out in trade enterprises across BiH in
the last quarter of 2015. The target population was composed of busi-
ness entities in wholesale and retail trade with at least 10 and not
4.4.2 | Structural model: Knowledge management
more than 600 employees (large, medium‐sized, and small companies).
effectiveness
The questionnaire was sent all over BiH, that is, all 10 cantons of Fed-
As indicated above, we followed aggregate approach and then calcu-
eration of BiH, Republika Srpska, and Brcko District in 1,657 copies.
lated composite variables as mean values of the variables with
Three hundred seventeen completed questionnaires were returned
weighting coefficients on individual factors. After validating the struc-
and used for statistical analysis.
tural model, it is determined that the model fits the data well enough
The highest response rate was among companies with 10 to 50
to be considered. The results are displayed in Figure 2. In Figure 2,
employees (47.3%), followed by companies with 50 to 250
abbreviations are used where OC stands for organisational culture, L
employees (32.5%). The questionnaire was answered mainly by
for leadership, IT for information technology, RS for reward system,
retailers dealing in food, beverages, and tobacco products sold in
OS for organisational structure, HC for human capital, KM for knowl-
specialised shops (18%); second‐hand goods retailers (13%); and
edge management, FI for financial indicator, and NFI for nonfinancial
wholesale food and beverages suppliers (11%). As many as 37.5%
indicator.
of the sample is represented by companies that are in business
General adequacy of the model was assessed in terms of several
between 10 to 20 years. Most respondents were men (68.1% of
measures. Findings indicated that certain measures identified the
317 that responded).
model as good, whereas others showed it to be less adequate. Once
an attempt had been made to examine posited hypotheses with the
data obtained through the questionnaire, it was found that four of
4.3 | Factor analysis the posited hypotheses could not be confirmed (see Table 5).
There are two types of factor analysis: exploratory and confirmatory. Results of the bivariate regression analysis confirmed positive
In addition to other things, when performing factor analysis using influence of key knowledge management effectiveness factors such
SPSS software, factor extraction method, rotation type, and limits of as organisational culture, leadership, information technology, reward
factor weighting coefficients must be decided. In this study, it was system, and human capital, linked with hypotheses H1, H2, H3, H4,
suitable to use the Shapiro–Wilk test where the null hypothesis (H0) and H6; the exception was the organisational structure factor (H5),
is that the data are normally distributed and the alternative hypothesis which did not have a statistically significant influence on effectiveness
(H1) is that data are not normally distributed (Shapiro–Wilk Test for of knowledge management. However, when the conceptual model
Non‐Normality 2008). According to Fornell and Larcker (1981), reli- was tested with structural equation modelling, only two of the six
ability is adequate if the composite reliability coefficient > 0.60 (see assumptions (H1–H6) could be confirmed; these two assumptions
Tables 2 and 3). were leadership (H2) and human capital (H6), which had a statistically
Interpretation of the results of factor analysis is presented in the significant positive influence on effectiveness of knowledge
next section. management.
6 BILOSLAVO ET AL.
TABLE 4 Model adequacy indicators Results of the bivariate regression analysis also showed that knowl-
Adequacy Model Reference General adequacy edge management had a statistically significant positive influence on
measure value value of the model financial and nonfinancial indicators of business performance; in this
χ2 (p value) 0.001 p ≥ .05 NO respect, the confirmation of hypotheses H7 and H8 was made possible.
RMSEA <0.07 RMSEA ≤ 0.100 YES Because the aim of the study was to determine the influence of knowl-
CFI 0.97 >0.95 YES edge management on business performance in the conceptual model,
NFI 0.95 >0.95 YES these two hypotheses were examined with structural equation model-
GFI 0.97 >0.95 YES ling. Results enabled the confirmation of both hypotheses (H7 and H8)
S RMR 0.06 S RMR < 0.05 slightly over the seeing that knowledge management had a statistically significant posi-
threshold tive influence on financial and nonfinancial performance of companies.
NNFI 0.91 >0.95 YES These findings as well as not a very good overall fit of the concep-
IFI 0.97 >0.95 YES tual model to the statistical data lead to making an additional step and
Chi 34.9 modifying the conceptual model.
df 13
FIGURE 2 Model of knowledge management effectiveness ple of the population, such model may be entirely inadequate. Because a
(standardised regression coefficient) [Colour figure can be viewed at specific sample was used in the study and the original model was not
wileyonlinelibrary.com] completely adequate, a decision was made to modify it.
BILOSLAVO ET AL. 7
After an examination of the entire conceptual model, it was found Based on the modified model, statistically significant correlations
that there are multiple possible scenarios for change. could be determined between the factors (organisational culture,
Evaluation of the conceptual model has shown that it is a direct human capital, leadership, organisational structure, information tech-
link between organisational culture, leadership, reward system, and nology, and reward system) and effectiveness of knowledge manage-
knowledge management effectiveness and that the correlation is sta- ment as well as positive influence on effectiveness of knowledge
tistically significant and positive. management, confirmed by cited studies.
On the other hand, the evaluation of the conceptual model has
also shown that it is reasonable to consider the link between informa-
tion technology (IT), human capital (HC), organisational structure (OS), 5 | DISCUSSION
leadership (L), and knowledge management (KM) effectiveness
through the organisational culture (OC). Effective organisations look for ways to turn their knowledge into
When checking the validity of measures and testing the modified improved business processes and decision‐making process that result
model, the RMSEA value was found to be <0.05, which indicated a in the increase satisfaction of their customers and other stakeholders.
good fit of the model. Compared with the original model, the modified Based on different empirical research, tacit knowledge hard to be cop-
model was adequate. The value of nonnormed fit index of the modi- ied (i.e., know‐how, patents, personal and organisational networks,
fied model was NNFI = 0.99, meaning the model was a good fit with and specific organisational culture) and effective knowledge manage-
regard to this measure. The value of CFI = 1 was indicative of an ade- ment represent the main source of competitive advantage for all types
quate model. In this case, SRMR = 0.03, indicating a good fit. The of organisations and especially those in the service sector (Preece,
value of GFI was 0.99, which is consistent with values of adequate 2015). The purpose of this study was to design a conceptual model
models. This led to the conclusion that the model fit the data very well of factors affecting knowledge management effectiveness and deter-
(see Table 6). mine whether knowledge management effectiveness exerts a positive
In the case of the modified model, all regression coefficients are impact on business performance.
statistically significant (see Figure 3). Review of literature and research done in the field of knowledge
The data clearly show that the model fits the empirical data very management revealed a large range of definitions of knowledge man-
well (see Table 7). agement, citing various key factors influencing effectiveness of knowl-
The model modified in accordance with the listed measures edge management and proposing different models of knowledge
showed a better fit than the original model. The modified model was management effectiveness. Nonetheless, sources rarely provide some
less parsimonious, which could be expected due to greater complexity specific and assessed models of knowledge management effective-
in comparison with the original. The conclusion is that the modified ness, which could be used as a standardised solution for measuring
model is adequate and better fit to the data than the original. effectiveness of knowledge management in organisations.
Knowledge management represents one of the ways in which risks
TABLE 6 Indicators of model adequacy
and unpredictability of the business environment can be transformed
Adequacy Model Reference General adequacy into opportunities and potential competitive advantage. To this end,
measure value value of the model
factors that influence effectiveness of knowledge management were
χ2 (p vrednost) 0.671 p ≥ .05 YES
analysed based on the theoretical papers. The next step was looking
RMSEA <0.05 RMSEA ≤ 0.100 YES
at empirical studies on factors that influence knowledge management
CFI 1 >0.95 YES
and examining which factors are identified by researchers as key factors
NFI 0.98 >0.95 YES
of knowledge management effectiveness. By comparing and combining
GFI 0.99 >0.95 YES
these studies, key factors that influence effectiveness of knowledge
S RMR 0.03 S RMR < 0.05 YES
management were outlined. It was concluded that key factors influenc-
NNFI 0.99 >0.95 YES
ing effectiveness of knowledge management are the following:
IFI 1 >0.95 YES
organisational culture, human capital, information technology, reward
df 13
system, organisational structure, and leadership.
8 BILOSLAVO ET AL.
FIGURE 3 The modified structural model (standardised regression coefficients) [Colour figure can be viewed at wileyonlinelibrary.com]
An additional aim of the study was to determine with the use of a Given the fact that the original conceptual model was not entirely
questionnaire which of recognised factors—organisational culture, adequate and did not sufficiently fit the statistical data, a decision was
human capital, information technology, reward system, organisational made to modify the model, which leads to new findings and insights.
structure, and leadership—influence effectiveness of knowledge man- Organisational culture serves not only as an antecedent to knowledge
agement in the case of companies from BiH. For the purposes of management effectiveness but also as one of the intervening mecha-
empirical examination of posited hypotheses, predicting that each of nisms through which other organizational factors as human capital,
the six factors (H1–H6) had a statistically positive influence on effec- information technology, organisational structure, and leadership
tiveness of knowledge management, factor analysis and structural influences knowledge management effectiveness. This research
equation modelling were used. result confirms findings of other authors (e.g., Zheng et al., 2010)
Results of the bivariate regression analysis confirmed positive that knowledge is created, made sense of, and utilised in accordance
influence of key knowledge management effectiveness factors such with a set of cultural values and norms that are embedded within
as organisational culture, leadership, information technology, reward employees' (i.e., human capital) sensemaking process and their struc-
system, and human capital, linked with hypotheses H1, H2, H3, H4, tural relationships as well as is reflected in leadership and information
and H6; the exception was the organisational structure factor (H5), technology applied. For example, knowledge‐sharing practices are
which did not have a statistically significant influence on effectiveness affected by cultural expectations such as what knowledge should be
of knowledge management. Influence of all six factors included in the shared and what should be hoarded by individuals, by structural rela-
conceptual model was then tested with structural equation modelling, tionships such as how quickly the knowledge flows through different
which yielded additional results. It was found that based on the con- hierarchical levels and among different business areas, and by informa-
ceptual model used and cumulative influence of key factors on effec- tion technology such as what knowledge is to be paid attention to and
tiveness of knowledge management, only two of the six hypotheses saved and what to be ignored. Based on the modified model, all six key
(H1–H6) could be confirmed; these two assumptions were leadership factors have a statistically significant positive influence on effective-
(H2) and human capital (H6), which had a statistically significant posi- ness of knowledge management, which confirms the six hypotheses
tive influence on effectiveness of knowledge management. (H1–H6) of this study.
BILOSLAVO ET AL. 9
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APPENDIX A
QUESTIONNAIRE
The 37 items of six critical success factors of knowledge management were used to ask respondents to describe their organisational practice
based on their experience and perceptions. Another 6 items were used to describe knowledge management effectiveness and two indicators
of business performance, one financial (i.e., profitability) and one nonfinancial indicator (i.e., market share). Content items are presented below,
and they formed the basis for formulation of the research questions together with the main sources used to develop them.
Leadership acts as a catalyst for KM Storey & Barnett, 2000; DeTienne, Dyer, Hoopes,
Leadership establishes the conditions required for KM development & Harris, 2004; Wong & Aspinwall, 2005;
Leadership acts as a model for the desired behaviour Akhavan et al., 2006; Singh, 2008.
Leadership encourages the creation, sharing, and use of knowledge
Leadership recognises KM as an important factor in business success
Leadership demonstrates commitment to KM
Leadership indicates support for KM
Use of proper ICT system to support KM needs Darroch, 2003; Lee & Choi, 2003; Kulkarni & Louis,
Use of technological tools (collaborative tools, knowledge database, 2003; Wong & Aspinwall, 2005; Wu & Wang,
document management systems, intelligent systems, etc.). 2006; Yeh et al., 2006; Du Plessis, 2007.
Use of knowledge maps supported by ICT tools
ICT solutions easy to use
Adequacy of ICT tools according to user needs
Use of ICT tools for storing knowledge
Use of ICT tools to improve the quality and efficiency of work
Use of financial rewards Sang, 2001; Chomicz, 2002; Akhavan et al., 2006;
Use of nonfinancial rewards Robinson et al., 2006; Šajeva, 2014.
Rewards based on individual work performance
Rewards based on work group performance
Top‐down knowledge flow supported Kulkarni & Louis, 2003; Salojärvi, Furu, & Sveiby,
Bottom up knowledge flow supported 2005; Wong & Aspinwall, 2005; Mahmoudsalehi,
Horizontal and vertical decision making process Moradkhannejad, & Safari, 2012.
Participation of external stakeholders (e.g., suppliers and customers)
Degree of centralisation of organisational decision making structure
Participation of employees in decision making processes
Further training to take up knowledge related rules Davidsson & Honig, 2003; Kubr, 2002; Bricklin, 2001;
Level of individual knowledge Argyris, 2002; Bozbura, Beskese, & Kahraman, 2007;
Level of individual skills and expertise Palacios‐Marques, Gil‐Pechuán, & Lim, 2011.
Work experience