Examining and Studying the Knowledge Economy

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Sustainable competitive advantage in a hyper competitive field depends on the effective utilization of available knowledge. Knowledge is the foundation of an organization's competitive advantage and, ultimately, the primary driver of its value (Luo, 2009). Efficient knowledge management is made up with providing accurate information to the right people exactly when they require. Knowledge Management (KM) focuses and supports "not only the know-how of a company, but also know-where, know-who, know-what, know-when and know-why" (Ramanujan & Kesh, 2004). According to Lim and Klobas (2000), the interest in KM has grown with the sophistication of technology for sharing knowledge.

Recognition of knowledge as the key resource of today's organizations affirms the need for processes that facilitate the creation, sharing, and leveraging of individual and collective knowledge (Fernandez & Sabherwal, 2001; Drucker, 1993). Among the various forms of knowledge management, knowledge sharing has been identified as a major focus area for knowledge management because knowledge sharing provides a link between the level of individual knowledge workers, where knowledge resides, and the level of the institution, where knowledge attains its value for the institution (Ford, 2004; Lindsey, 2003).

One of the problems of local knowledge is the non-availability of mechanisms to access distant knowledge. Knowledge sharing across space and time raises serious problems due to the "localness of knowledge" (Davenport & Prusak, 1998). Sarker asserts that one of the key prerequisites for enabling collaboration and communication among members with diverse backgrounds in terms of domain and levels of expertise is the member's ability to create a sense of mutuality and a shared frame of reference. Clearly this would necessitate a sharing of knowledge from one member to another (Sarker, 2002).

Recently, more organizations are attempting to set up knowledge management systems and practices in order to effectively use the knowledge they have. There are many features like cultural, technological and organizational factors which has impact on KM's success, although people are considered as the most important and major factor for its success. The key to success is now dependent on the connections between individuals within the organization (Brown & Duguid, 1991; McDermott, 1999). When people are motivated enough to share, a KM initiative will find its success (Connely & Kelloway 2003). Involving the entire organization in knowledge sharing activities, particularly within the large organizations seems useful only when employees are willing to apply the knowledge and share it with their colleagues.

Knowledge sharing is a complex process in which there are many factors that influence the willingness of employees to share knowledge. There are many potential barriers in the organization towards knowledge sharing which may arise from individuals, organizational and technological aspects. The goal of this research is to achieve barriers embedded in individual and organizational context within a large multinational organization based in Malaysia. Malaysia is a developing country which is planning to become a K-Economy nation in 2020. The notion of knowledge management in Malaysia is still at the beginning stages and the issue of knowledge sharing is under investigation by scholars. In order to illustrate better landscape about this research area, the introduction is designed as follows:

1.1 K-Economy

The revolution of information and communication systems and the emergence of K-Economy have brought in lot of changes. Land, labour, machinery and raw materials are not considered as the resource for sustaining competitive advantage and survival of the organization. This is in contrast to a production-based economy, where knowledge plays a less prominent role, and growth is driven largely by the accumulation of the traditional factors of production. In a K-based economy, educated and skilled human resources, or human capital, are the most valuable asset.

Information and knowledge are replacing capital and energy as the primary wealth-creating assets. The information and communication technology and knowledge revolution fuel each other as it is only in the fusion of the electronic network infrastructure of the internet and other digital systems and services, and the rapidly developing knowledge tools and systems in the knowledge-driven economy, that the full implications of electronic business and knowledge management to transform our lives can be fully realized. The rapid development of information and communications technology has changed the basis of trading and doing business. It transformed the majority of wealth-creating work from "physically-based" to "knowledge-based". The wealth of the nation no longer depends on the ability to acquire and convert raw materials, but depends on the abilities its citizens and their skills with which organization's knowledge-based resources are acquired and developed. We are in the midst of an economic transition from an era of competitive advantage based on information to knowledge creation. It is now said that value added in most businesses today is in the form of knowledge, not "stuff". The extended IT industry has been quick to promote the notion that knowledge management not only lowers cost structures and increases strategic flexibility but also facilitates knowledge creation and utilization, especially in firms competing in dynamic environments.

In sustaining competitive advantage in this K-Economy, the willingness and opportunities of employees as a knowledge-based resources for adapting, acquiring new information and knowledge become extremely important because of two reasons, firstly, the nature of the work has changed, many jobs require employees to think, plan or make decision rather than to lift assemble, or build. This kind of wok requires both tacit and explicit knowledge and the ability to apply knowledge to the work. Secondly, work continues to change in unpredictable ways. It is often difficult to state exactly what kind of knowledge a person needs to succeed on the job and it is impossible to predict what type of knowledge he or she will need in the future. The development and sharing of new knowledge is so rapid in the new economy. Development of information systems, internet, networks, and communications make it easier and faster to share knowledge. Knowledge can be distributed between different sectors and units in few seconds through networks. Surprisingly, knowledge is the only resource which increases when it useed rather than diminishing. The more it is used the more valuable it becomes.

Due to the importance of knowledge in a growing global economy, managing knowledge effectively has become an important managerial tool. The recognition of knowledge as the key resource of today's organizations affirms the need for processes that facilitates the creation, sharing, and leveraging of individual and collective knowledge (Becerra-Fernandez & Sabherwal, 2001; Drucker, 1993). Knowledge management is, therefore, fast becoming the imperative to compete, grow and win in the new knowledge-based economy. Today, more organizations are attempting to set up knowledge management systems and practices to more effectively use the knowledge they have, and numerous publications have discussed the importance of knowledge in organizations. knowledge management systems and tools are becoming an important managerial tool. The technology provides the means to access , process and distribute vast amount of data and information than ever, but this remains an almost meaningless activity without the process of knowledge management to translate data and information into relevant knowledge which can be productivity utilized. Knowledge management provides means and strategies to generate, distribute and use knowledge in the way that add value to business activity and provide new opportunities for enterprise.

Companies are adopting integrated approaches to identify, manage, share and capitalize on the know-how, experience and intellectual capital of employees (Steyn, 2002; Todd, 1999; Katz, 1998; Martensson, 2000). During the past decade, many companies invested heavily in electronic knowledge management (KM) systems hoping to increase their ability to manage the vast array of knowledge hidden within the many nooks and crannies of organizational life (Eginton, 1998; Sbarcea, 1998). But many of these projects failed, the matter is that critical knowledge is embedded in the mind of employee and success of knowledge management system depends on employee's willingness to share knowledge, but because of challenges and barriers in knowledge sharing, many of KMS projects failed. Experienced users of electronic KM systems now realize that managing knowledge is a complicated process and heavy investment in IT infrastructure and information systems only is not adequate to support the success of KM. What makes it even more complicated to manage are the myriad of enablers and barriers that impact individual's willingness and ability to share knowledge.

Early empirical research efforts have begun to shed light on factors involved in knowledge sharing (KS), some of them defined as a set of behaviors involving exchange of knowledge or assistance to others (Connelly, 2000). Factors such as perception of management's support (Connelly & Kelloway, 2003), trust (Huemer et al., 1998; Connelly, 2000), reward structures, organizational status differentials (Connelly, 2000), leadership (Kelloway & Barling, 1999), social networks (Cross et al., 2001; Rush, 2001) and organizational cultures (McDermott & O'Dell, 2001) have been linked with the sharing process. However, our understanding about enablers and barriers for KS in the workplace is still in its infancy as we have only scratched the surface of the intricate process of knowledge flow within and between organizations (Ichijo, von Krogh, & Nonaka, 1998).

As a summary, above was a brief introduction to the subjects including K-Economy, knowledge management and the significance of knowledge sharing as a key component of knowledge management system. In different countries, different researches were conducted to identify factors affecting knowledge sharing processes within organizations. Malaysia as an Asian developing country which has the plan of being the K-Economy nation involves in new stages of implementing knowledge management plans to speed up its journey to achieve the vision of 2020. There are only few researches about knowledge sharing in Malaysia.

Knowledge Economy (from Business services and the knowledge economy in Malaysia)

Knowledge as a resource causes great confusion for economists, as it is the only resource which increases with use rather than diminishing. Knowledge may be expensive to generate but there is little cost to diffusion. Unlike physical goods that are consumed as they are used, providing decreasing returns over time, knowledge provides increasing returns as it is used. The more it is used, the more valuable it becomes, creating a self-reinforcing cycle (Clarke, 2001).


Regions around the world have increasingly become pitted in a fierce competition to lure and retain high-quality firms to provide stable employment with moderate to high wages to underpin broader community and nation-building objectives. While it may once have been the case that manufacturing firms were the principal prizes, more recently service sector firms have become the focus of attention. Some of the support for this new emphasis on the importance of the service sector is drawn from theories of the ''knowledge economy'' in development from the 1960s onwards. These theories emphasise the enhanced status of knowledge in economic growth. As it is argued that knowledge-intensive activities bring the greatest returns, the World Bank has encouraged countries to expand the role of knowledge in their economies in order to achieve higher productivity and growth. This obviously involves a substantial reallocation of funds into what would be deemed as knowledge-oriented projects, such as the information and communication technology (ICT) sector, which has increasingly come to symbolise the knowledge economy.

Developing countries, in their respective efforts to build knowledge economies, face serious challenges due to comparative weakness in their reservoirs of knowledge (World Bank, 2007).

The emphasis on developing knowledge economies is driven by the belief that knowledge has replaced machinery, land and labour as the principal resource in economic growth and production (Bell, 1973; Richta, 1977; Machlup, 1962; Beniger, 1986; Parker, 1973; Porat, 1977; Drucker, 1993). This implies that developing countries that are deficient in the traditional inputs of production, typically capital, would still be able to achieve sustainable economic growth if they developed knowledge economy oriented activities. A good example of this is India's rise in software development.

While there seems to be almost universal recommendations that governments pursue strategies to develop ''knowledge economy'' sectors to further their own economic and social development, it is also clear that some countries have far more advantages than others in doing so do. As an influentialWorld Bank report makes clear, there is a ''danger of a growing ''knowledge divide'' between advanced countries, which are generating most of this knowledge, and developing countries, many of which are failing to tap the vast and growing stock of knowledge because of their limited awareness, poor economic incentive regimes, and weak institutions'' (World Bank, 2007, p. 1). However, what the report does not point out is that advanced countries often do not share their knowledge with developing countries due to economic and strategic reasons. Even if they do want to share technology, knowledge gaps between the two groups of countries make this difficult to do.

Multimedia super corridor

The MSC has been created with a USD 20 billion investment in physical infrastructure in and around the capital city, Kuala Lumpur [5]. The first cluster consists of the Putrajaya, the new seat of government administration consisting of government buildings and services. The second cluster consists of the Cyberjaya, a state-of-the art information technology (IT) industrial park. The MSC also includes a Multimedia University, research centres, environmental friendly ''green'' zones, residential areas and civic amenities such as hospitals and schools to serve MSC employees, and a business start-up incubator. It draws on a web of infrastructural support based on a 2.5-10GB per second capacity fibre-optic backbone and 5-GB direct link to surrounding Southeast Asian countries, Japan, the USA and Europe (Ramasamy et al., 2002, p. 8).

While there is much to be positive about the growth of business services industry in terms of improving service quality, operational efficiency and providing greater access by customers to firm services, this process is not without difficulties. Raising quality in these new types of operations remains a key industry concern around the globe; some operations struggle with the new organisational form to such an extent that it is arguable that efficiency is improved.

From Mahatir Mohamed's speeches, it is clear that the government intended to make the MSC a hub of cutting-edge research, services and software solutions (Ariff and Goh, 2000).

1.1.1 Knowledge Economy in Malaysia

1.2 DHL

1.3 Background of Problem

According to Bhirud, Rodrigues, and Deasi (2005) "the success of knowledge management in the organization depends on effective knowledge-sharing" (2005), and "doing things right, knowledge sharing is more pragmatic and focuses on doing the right things" (Malhorta, 2000). Recently, sources of competitive advantage have migrated from being based on economies of scale to being based on economies of expertise derived by leveraging knowledge distributed in the organization's network through intra-organizational and inter-organizational relationships. Subramani and Venkatraman's (2003) study found that, while physical asset specificity was a determinant of governance in the industrial age, domain knowledge specificity had the potential to be a key determinant in the knowledge-driven economy.

In organizations it is essential to address effective knowledge flow among employees, as well as knowledge collaboration across organizational boundaries, while limiting knowledge sharing barriers (Lee, & Ahn, 2005; King, Marks, & McCoy, 2002; Parikh, 2001; Paraponaris, 2003).

The problem being addressed throughout the study is that existing knowledge is not being effectively disseminated throughout organizations. Weiss, Capozzi and Prusak (2004) cited an International Data Group IDC report, which estimated that an organization with 1,000 workers might easily incur a cost of more than $6 million per year in lost productivity when employees fail to find existing knowledge and recreate knowledge that was available but could not be located. On average, six percent of revenue, as a percentage of budgets, is lost from failure to exploit available knowledge (So & Bolloju, 2005). There are only few researches conducted in Malaysia about knowledge management systems and knowledge sharing challenges and it needs more attention from scholars. Identifying and measuring the factors that affect knowledge sharing is the problem of this research.

Leaders of businesses can use these findings to develop new processes and procedures for overcoming resistance to knowledge sharing, which might translate to increased innovation, productivity and competitive advantage.

1.4 Research Questions

Based on the research and studies performed, this study investigates the factors that influence one multinational company based in Malaysia's perception of knowledge sharing issues and barriers. The following are the research questions arising from the background studies and researches.

Question 1:

What are the individual barriers that employees resist the sharing of knowledge?

Question 2:

What are the organizational barriers that employees resist the sharing of knowledge?

Question 3:

What are the technological barriers that employees resist the sharing of knowledge?

Question 4:

What are the key reasons employees' lists for not wanting to share their expertise?

1.5 Research Objectives

In this study, an attempt will be made to find out the issues and challenges for knowledge sharing in one multinational organization in Malaysia. The focal point of this investigation shall be on presenting a qualitative and descriptive report of the knowledge sharing issues and challenges in Malaysia. Specifically the following objectives are formulated to achieve the overall goal of this study:

To discover the challenges with reference to knowledge sharing initiatives amongst Malaysian companies;

To find out the extent of knowledge exploitation amongst Malaysian organizations;

It is hoped that this study will shed light to some of the important issues and challenges with reference to knowledge sharing in Malaysia by providing a more thorough and clear picture of the knowledge management status amongst Malaysian organizations. This could in turn help top managers and decision makers to develop a more insightful agenda to ensure success for their knowledge management initiatives.

1.6 Significance of Study

In a society and a business environment that operates at a rapid rate and where every conceivable competitive advantage is potentially valuable, focusing on knowledge sharing mechanisms can result in a more adaptive organization with the ability to change at an accelerated pace. Through the learning effort, resource waste can be eliminated, productivity enhanced, morale improved, and organizational change expedited. Although these are laudable goals, the study of knowledge sharing is relatively a new field of study. It has only been a little over a decade that academics or practitioners have been interested in the area. Because of the short-term history of knowledge sharing, models have not been accepted yet (Thompson, 2009), and the variables contributing to the knowledge sharing process such as human, organizational structure, motivation, and technology are still debated. Ipe (2003) asserted that further research in the knowledge-sharing process and factors that can influence this process are needed. Bock, Zmud, and Kim (2005) supported the need for this research in the statement, "The existing understanding of the factors that shape individuals‟ intentions to engage in knowledge sharing is anything but mature".

A key reason for lack of knowledge management viability is the unwillingness of employees to share their knowledge effectively with their peers. The results of the study identified various barriers to knowledge sharing. The beneficiaries of the study will be researchers, practitioners, scholars and organizations (leaders and employees) due to the fact that the research has provided a new dimension and theory that knowledge sharing are important to organizations in order to influence performance. The study will also benefit researchers interested in the areas of organizational structure and functions, and provided a better understanding of the importance of building relationships across the organization and transferring knowledge to improve performance.

1.7 Scope of the Study

This study will have a research on one multinational company based in Cyberjaya, Malaysia which is DHL IT Services. It will be about the characteristics, impact and benefits knowledge sharing in this company to improve their routine tasks.

1.8 Organization of Study

Chapter 1 presented the breadth of the study and showed the importance of knowledge and knowledge management in organizations, acknowledging that the evidence is not clear that such knowledge is freely shared with the rest of the organization. Chapter 2 will examine, review, and provide qualitative analysis of the supporting literature relevant to this topic-with special emphasis on KM, knowledge sharing, and knowledge sharing barriers. Chapter 3 describes the methodology and procedures in the study and explains case study methodology, some theoretical perspectives, choice of paradigm, and research design (questionnaire design, data collection, and subsequent data analysis). Chapter 4 will present the results, and chapter 5 will interpret the results and offer recommendations for further study.