Ehsan Shahidifar
Islamic Azad University, Iran, Islamic Republic of
E-mail: e.shahidifar@mail.com
Submission: 21/04/2016
Revision: 24/05/2016
Accept: 31/05/2016
ABSTRACT
Knowledge
management is extensively used in large, medium and small firms. However, the
larger the scale, the more knowledge management practices might be used in
organizations. Unfortunately, application of knowledge management in new
ventures is not sufficiently discussed in the extant literature. Thus this
paper attempts to concentrate on this issue. Therefore, environmental,
organizational and individual factors are enumerated and their effect on
application of knowledge management in new ventures is examined. Findings
revealed that all these factors significantly affect knowledge management
application is new ventures.
Keywords: Knowledge management
application, Entrepreneurship, New ventures, Iran
1. INTRODUCTION
Knowledge Management (KM) in organizations
has already been recognized as an important factor of the competitiveness of an
enterprise. One of the advantages it brings is speeding up the innovative
process by accessing the right knowledge at the right time (EL-KORANY, 2007).
Some indicators, which act as a
predictor to the current level of knowledge management application, could be
used by firms to take appropriate actions to increase the level of KM
application (MOHAYIDIN et al., 2007). In fact, KM is an emerging field that has
commanded attention and support from the industrial community (RUBENSTEIN-MONTANO
et al., 2001).
The purpose of KM is to enhance
organizational performance by explicitly designing and implementing tools,
processes, systems, structures, and cultures to improve the creation, sharing,
and use of all three types of knowledge that are critical for decision making (DAVID;
FAHEY, 2000). There is a general
recognition among academics that KM is a cross-functional and multifaceted
discipline (LEE; CHOI, 2003).
The power of KM is in explicitly
enabling and enhancing the productivity of organizational activities and in
leveraging their value for the group as well as for the individual (RUGGLES,
2007). On the other hand, in some firms, KM is a firm-wide initiative involving
upgrading the technical infrastructure, deploying workstations to professional
staff desktops (ALAVI; LEIDNER, 1999).
It is the systematic underpinning,
observatism, measurement and optimization of the company's knowledge economies
(DEMAREST, 1997). In practice, what companies actually manage under the banner
of KM is a mix of knowledge, information, and unrefined data—in short, whatever
anyone finds that is useful and easy to store in an electronic repository (VARUN
GROVER, 2001).
Now that KM is widely known and
practiced in many large organizations, it might be useful to look back a bit
and try to give some perspective on how this old but new subject developed and,
in particular, how some of the specific antecedents of today's KM work (PRUSAK,
2001).
It means that the topic is old in
nature, but as an academic field, its age is less than a decade. An overarching
theory of KM has yet to emerge, perhaps because the practices associated with
managing knowledge have their roots in a variety of disciplines and domains (BARCLAY;
MURRAY, 1997).
In sum, KM is a management function
that creates or locates knowledge, manages the flow of knowledge and ensures
that knowledge is used effectively and efficiently for the long‐term benefit of the organization
(DU PLESSIS, 2007; SALAMZADEH et al., 2011). The present paper enables a more
nuanced understanding of the usage of what is increasingly becoming a
ubiquitous KM application in new ventures.
2. KNOWLEDGE MANAGEMENT IN NEW VENTURES
New ventures are young organizations
which need more attention in their early stages. These entities are normally
uncertain and unstable that they often have no choice but to be market-driven
and market-based in all aspects of their business, including their approach to
employees, strategic issues and KM (CARDON, 2003).
These firms face different problems
(SALAMZADEH, 2015a). For instance, because the new ventures are so small to
begin with, and because the new products are so unique, it is very difficult
for investors to find evidence or data on the tiny new ventures to plug into
their mental road maps (VASS, 2008). New ventures usually have organic
structures that permit speedy and effective flow of knowledge and its
subsequent use in new product development activities (ZAHRA et al., 2000).
Given that new ventures usually face
severe internal knowledge shortages, they can overcome this by gaining access
to different sources of knowledge in their industry and elsewhere (LARRAÑETA et
al., 2012). Typically, the managerial decisions about KM and renewal are laden
with various competing risks as well (BRUTON et al., 2007). However, to some
scholars KM in new ventures has merely one purpose, namely the creation of more
innovation (DURST; WILHELM, 2011).
For instance, a key aspect of
knowledge management in firms is the role of knowledge spillovers (MUDAMBI;
SWIFT, 2009). Moreover, research suggests appropriate investments in KM
initiatives can enhance organizational performance (MILLS; SMITH, 2011). In
fact, in business, there has been an upsurge of interest, among scholars, in KM
in firms for the last decade (TIEP, 2007).
In case of new ventures, the
challenges of KM in firms that are in the process of building up their first
core capabilities require a more specific analysis (LORENTZEN, 2009). The
development of works on KM in firms and organizations is linked to a widely
shared belief that knowledge has become a critical resource that can provide a
competitive advantage if it is explicitly integrated into a strategy and
managed effectively (PONS; VAN ZANTEN, 2007).
Lack of appropriate mechanisms of KM
in new ventures hampers or even disenables effective creation and dissemination
of market knowledge and consequently appropriate reaction on this knowledge (KMIECIAK;
MICHNA, 2012). The process of knowledge accumulation and utilization in the new
venture creation process in different industries seems to be almost identical
to the processes observed in general industries (BLOMSTERMO; SHARMA, 2004).
Within this context, over the last
decades there has been an upsurge of interest among scholars on the importance
of KM in new ventures as a crucial source of strategic competitive advantage (PISCITELLO;
RABBIOSI, 2003). KM research is more focused on large firms (PILLANIA, 2008).
New ventures do not manage knowledge
in the same way as larger organizations. Viewing new venture KM practices as
scaled-down versions of the practices found in larger organizations is
incorrect. New ventures have understandable resource constraints, and hence
have to be creative in working around these limitations in order to manage
knowledge (DESOUZA; AWAZU, 2006).
There is established evidence to
suggest that new ventures face different KM challenges than those encountered
by large firms (SPARROW, 2005). Potential competitive advantage of KM may be
more profound in a new venture. KM is essential for new ventures due to several
reasons.
First, knowledge creation became one
of the important outcomes of KM in organizations, and this is of more
importance when it comes to new ventures. In fact, new ventures gain a whale of
information and tacit knowledge. Thus, it is inevitable for them to handle such
knowledge. Therefore, new ventures must take advantage of an appropriate system
to manage knowledge (NONAKA; VON KROGH, 2009).
Second, firms might promote new
venture creation by implementing organizational learning as well as KM
practices and procedures (LUMPKIN; LICHTENSTEIN, 2005). Issues related to new
ventures are mostly ignored or marginalized (PILLANIA, 2008).
Affecting factors on implementing KM
in new ventures have not been systematically investigated (WONG, 2005). There
is a lack of research on main issues in the KM in new ventures context in
general, and in Iranian new ventures in particular (KAWAMORITA KESIM et al.,
2013; SALAMZADEH, 2015B; SALAMZADEH; KAWAMORITA KESIM, 2015). This paper makes
an attempt to fill this research gap.
3. RESEARCH METHODOLOGY
A meta-analysis is considered to
elaborate the findings. In the meta-analysis, the main factors affecting
knowledge management application in new ventures are identified through
systematically reviewing and synthesizing the relevant published research.
Meta-analysis is a methodology employed to synthesize the outcomes of various
studies related to the same topic or outcome measure (HUNTER et al. 1982).
It is typically conducted as a
quantitative procedure geared toward the comparison of effect sizes across a
variety of research studies. Qualitative meta-analysis, also referred to as
meta-synthesis, follows the same replicable procedures of a quantitative
meta-analysis; however, it is interpretive rather than aggregative (PATERSON et
al. 2001).
Thus, different databases (Scopus,
Web of Science, Ebsco, ProQuest, and Google scholar) were initially searched to
identify relevant research on factors affecting knowledge management
application in new ventures. Not surprisingly, most papers in this domain were
published after 1990, when knowledge management in new ventures was in its early
stages of its emergence. The papers were further categorized based on the
factors affecting knowledge management application in new ventures (OSTERWALDER;
PIGNEUR, 2013).
Several steps were followed in the
process of synthesizing the facts presented in the various studies. First, the
main factors used in the studies were extracted from the text of the papers.
Second, the factors were pre-sorted based on their title only. As a next step,
the factor descriptions as provided in the papers were reviewed and concepts
were re-sorted. Finally, some hypotheses are proposed and tested.
A sample of 97 new ventures was
randomly selected from the list of startups which were established after 2011
and registered in the legal database of the Ministry of Cooperatives Labour and
Social Welfare. Response rate were 92% after 2 follow ups. Respondents were
founders of the surveyed new ventures. Cronbach’s alpha was 0.73 which is
higher than 0.7. Moreover, face validity was checked by experts of new venture
creation and entrepreneurship.
4. FINDINGS
As mentioned earlier, this paper
intends to investigate the factors affecting knowledge management application
in new ventures. To do so, the factors are categorized in three main
categories- based on a qualitative meta-analysis according to Gartner's (1985)
conceptualization of new venture creation, which are:
(i)
Environmental factors
Generally speaking, environmental
factors are defined as physical or social dimensions that determine a society's
organization and context (FOUGEYROLLAS et al., 2002). Current KM research
argues that environmental factors affect learning outcomes in firms (ARGOTE et
al., 2003).
KM initiatives directly result from
the environmental context in which a firm operates and environmental factors
are inseparable considerations in new ventures’ strategic decisions (CUI et
al., 2006). Prior research suggests that external environmental factors are
important exogenous variables (CHEN et al., 2014). Some of the main
environmental factors are competitor pressure, customer satisfaction, and
marketing approach (PARK; CHEN, 2007).
In new ventures, furthermore,
organizational supportive environmental factors are core catalysts for the
promotion of an effective learning process which leads to successful KM (SONG;
CHERMACK, 2008). Generally speaking, environmental factors are those changes in
the environment that present both constraints on and opportunities for
technological innovations, such factors encompass competitive intensity,
information intensity, and governmental support (LEE; KIM, 2007). Indeed, these
factors are expected to vary the effects of knowledge evolution on firm
performance (CHEN; LIANG, 2011). The following hypotheses are proposed based on
the qualitative meta-analysis:
(ii)
Organizational factors
Organizational factors are defined
as all of the hardware, knowledge, attitudes, and skills that exist within the
organization in which the innovation is to be implemented; they can be sub-
divided into “physical environment” and “support environment” (FARQUHAR; SURRY,
1994; SALAMZADEH et al., 2014). Recent years has seen increased attention being
given to organizational factors in KM (HUANG et al., 2014).
In basic terms, KM comprises a set
of processes through which knowledge is acquired, developed, gathered, shared,
applied and protected by the firm in order to improve organizational
performance. Organizational factors such as cultural values, leadership and
human resource (HR) practices influence knowledge exploration and exploitation
practices and innovation in new ventures (DONATE; GUADAMILLAS, 2011). The
following hypotheses are proposed based on the qualitative meta-analysis:
·
Pb1: There is a positive relationship
between physical environment and successful application of KM in new ventures.
·
Pb2: There is a positive
relationship between support environment and successful application of KM in
new ventures.
(iii)
Individual factors
Individual factors are those that
influence the ability to learn, such as the absorptive capabilities of the
individual, thus they indirectly determine the knowledge and competence an
individual acquires as a result of the learning process (LAM; SORENSEN, 2010).
Individual factors are also among
those key elements that need to be considered while studying KM behavior (TOHIDINIA;
MOSAKHANI, 2010). Training and education, knowledge sharing culture, and
knowledge sharing motivation are the most important factors mentioned in the
extant literature (Khalifa & Jamaluddin, 2012). The following hypotheses
are proposed based on the qualitative meta-analysis:
·
Pc1: There is a positive
relationship between training and education and successful application of KM in
new ventures.
·
Pc2: There is a positive relationship
between knowledge sharing culture and successful application of KM in new
ventures.
·
Pc3: There is a positive
relationship between knowledge sharing motivation and successful application of
KM in new ventures.
Table 1 summarizes the results of
our survey that all of hypotheses are accepted with level of confidence %95 and
coefficient of correlation (cc) between 0.32 for H5 to 0.802 for H1. The
contribution of the study is to determine which factors successfully contribute
to application of KM in new ventures. In fact, although the topic seems to be
studied, it is not studied earlier as is.
It means that we used Gartner's
(1985) approach, as an extensively accepted approach, to conduct a qualitative
meta-analysis. Thus, we used this lens to shed more light on the importance of
KM in new ventures. It should be noted that in past most of the scholars used
to believe that KM is just good for mature organizations; however, this study
shows that KM could be applied in new ventures.
Table 1: Summary of
results
|
Results |
cc |
Sig |
Hypothesis |
Category |
|
accepted |
0.802 |
0.00 |
Pa1: There is a
positive relationship between competitor pressure and successful application
of KM in new ventures. |
Environmental |
|
accepted |
0.4 |
0.00 |
Pa2: There is a
positive relationship between customer satisfaction and successful
application of KM in new ventures. |
|
|
accepted |
0.378 |
0.00 |
Pa3: There is a
positive relationship between marketing approach and successful application
of KM in new ventures. |
|
|
accepted |
0.71 |
0.00 |
Pb1: There is a positive
relationship between physical environment and successful application of KM in
new ventures. |
Organizational |
|
accepted |
0.32 |
0.00 |
Pb2: There is a
positive relationship between support environment and successful application
of KM in new ventures. |
|
|
accepted |
0.73 |
0.00 |
Pc1: There is a
positive relationship between training and education and successful
application of KM in new ventures. |
Individual |
|
accepted |
0.434 |
0.00 |
Pc2: There is a
positive relationship between knowledge sharing culture and successful application
of KM in new ventures. |
|
|
accepted |
0.581 |
0.00 |
Pc3: There is a
positive relationship between knowledge sharing motivation and successful
application of KM in new ventures. |
5. CONCLUSION
As mentioned earlier, KM is a
critical issue, especially in established companies. Large companies take
advantage of KM practices to improve their status; however, less attention has
been drawn to application of KM in new ventures. Maybe this is due to dominant
belief regarding the application of KM in large companies instead of small
ones. Yet, there are several advantages associated with such applications (ZAHRA
et al., 2000; SALAMZADEH, 2015a).
There are several factors which
affect KM application, which could be categorized as follows: (i)
environmental, (ii) organizational, and (iii) individual factors. These factors
are enumerated in this paper and some hypotheses are proposed accordingly.
Results showed that the hypotheses were accepted, and thus these factors were
considered as effective factors on KM application. Our findings are consistent
with prior research (e.g. see FARQUHAR; SURRY, 1994; CUI et al., 2006; PARK;
CHEN, 2007; TOHIDINIA; MOSAKHANI, 2010; CHEN; LIANG, 2011; DONATE; GUADAMILLAS,
2011; KHALIFA; JAMALUDDIN, 2012).
But the most important theoretical
and practical contributions of the paper were to investigate the relationship
per se, as well as considering the Iranian context. Since "new venture creation and startup
atmosphere" is growing in the country (TANHA et al., 2011; SALAMZADEH,
2015b), startup teams and founders might take advantage of KM practices. To do
so, they might concentrate on the factors which are important in such
applications. Moreover, the findings draw the attention of scholars of KM to
study different dimensions of these practices in new ventures.
There were some limitations in this
research, such as lack of access to comprehensive databases of new ventures.
This was solved by using the legal database of the Ministry of Cooperatives
Labour and Social Welfare. Also, data gathering phase was a little bit hard,
but hopefully with two follow ups, enough data was gathered. Future researchers
might expand the factors individually and investigate those factors more
deeply. Also, scenario analysis and cross impact analysis might be used to shed
more light on different aspects of the topic. Finally, policy makers might use
the findings to devise appropriate policies for improving KM application in new
ventures.
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