Literature Review of Definitions and Explanations of Knowledge Management

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Introduction

The Literature review presents several definitions and explanation on what knowledge management is and how the life insurance industry can increase the Service Quality and customer satisfaction through knowledge management by different people.

What is Knowledge Management

There has been a growing recognition in the business community viewing knowledge as a critical resource knowledge resources matter ore than conventional one's e.g.Lan & capital(Wu & Wong,2006). The knowledge-based view provides a theoretical base on why knowledge-based resources are crucial resources are crucial in creating the sustainable competitiveness of the firm (Choi & Lee,20003 ;Spender ,1996) . Knowledge management (KM) practices enhance the flow of insight and advice between employees and therefore they can benefit from other's expertise (von Krogh et al.,2000). The idea that enterprises can improve employees' use of knowledge via K has been widely accepted among practitioners, whilst few organizations have tackled KM as successfully as they should. Parlby (20000) reported that many organizations still faced serious problems in managing knowledge, including lack of KM policies, difficulty of capturing tacit knowledge and knowledge overload.

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An innovation is described by Rogers (1995) as an idea, practice or object that is perceived as new by an individual or another unit of adoption. As stated above adopting a and applying KM is a relatively new phenomenon in any country for the life insurance industry. Ajzen and Fishbein (1980)'s Theory of Reasoned Action (TRA) posits that a person's behavior is a function of the person's intention determined by the attitude toward the act and the beliefs about the expectations of others, namely social normative beliefs. Technology Acceptance Model (TAM) (Davis,1986,Davis, 1989)suggests that a person's intension to use technology is determined by perceived usefulness and perceived ease of use. Perceived usefulness refers to the degree to which a person believes that using a particular system would enhance his or her job performance, while pericved ease of use refers to the degree to which a person belives that using a particular system would be free of effort . The propositions of TAM can be applied in examining what benefits KM would be free of effort.

In this study knowledge is defined as the understanding, awareness, or familiarity acquired through study, investigation, observation, or experience over the course of time (Bollinger and Smith,2001) . In the case of life insurance business, "Knowledge " refers to the familiarity and professional capability in new policy design underwriting, claim, customer service and so on. Carlsson (2001) suggest that KM is the process of identifying, managing and leveraging individual and collective knowledge to support the firm to become more competitive and provide a good service to the customers. Gupta et al. (2000) propose that K is a process that helps organizations find, select, systematize, disseminate and transfer important information and expertise necessary for activates. KM is also referred to manage the corporation's knowledge through a specified process for acquiring, organizing, sustaining, applying, sharing and reviewing the knowledge of the employees to enhance organizational performance and create value (Davenport and Prusak,1998:Alavi and Leidner,2001). According to Horwitch and Armacost (2202), we defined KM as the creation, extraction, transformation and storage of the correct knowledge and information in order to design better policy, modify action and deliver results for both the employees and organizations in the life insurance industry.

Life Insurance can be seen as an arrangement through which the risk of specific individuals can ne share by the general majority of people (Hsiao,2003). Different from other industries, the products sold by the life insurance are comparatively "invisible" and "untouchable" (Hsiao,2003) . "People" play an important role in conveying the knowledge and service to the customers in the life insurance industry. The Life insurance industry sells life insurance policies which are composed of the obligation, image, service and knowledge of the companies. K would be imperative for life insurance companies to enhance performance and gain competitive edge (Wang, 2005) . Although KM has employed in the business world for decades , its adoption and applications have been just lunched in Sri Lankan life insurance business recently . Innovation Diffusion (ID) has drawn much attention of researches in several areas (Baptista,1999; Carter et al., 2001; Wolcott et al., 2001). However, there is literature found on the adoption and diffusion of KM, particularly in the life insurance domain. Thus, this study lays emphasis on the adoption and diffusion of innovation to identify motivations and barriers among the employees who are important in undertaking KM activities in life insurance enterprises.

Attitude toward Knowledge Management Adoption

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"Attitude Toward the Behavior" is suggested by Ajzen and Fishbein (1980) to be the personal factor that is critical in influencing a person's intention which is viewed to be good predictors behavior. The personal factor is the individual's positive or negative evaluation of performing the behavior. A person's attitude refers to his or her judgment tat performing the behavior is good or bad and that he or she is in favor of or against performing the behavior (Ajzen and Fishbein ,1980). According to the innovation-development process (Rogers, 1995) , after organizational recognition, research and development of KM , the innovation ,i.e.,KM in this context, would need the employees to adopt the concept and methods of KM and then implement the related activities.

Service Quality and Customer Satisfaction

In this section our attention would be to review literature which has recognized the relationship between service quality and customer satisfaction. In other words the impact of service quality on the customer satisfaction process. Customer satisfaction will be an outcome of the interaction between customer expectation vs. customer experience.

When considering the relationship between service quality and customer satisfaction, the work of Zeithaml and Bitner (2000) needs to be highlighted. In their model they have illustrated that the product quality or service features and prices paid are also important variables other than the service quality, in the customer satisfaction process. But their attention was mainly on the service quality.

The model presented by Zeithaml and Bitner (2000)

(Source: Zeithaml and Bitner, "Service Quality , integrating customer focus across the firm", 2000,P.75)

Therefore, this model forwards that service quality is one significant aspects of customer satisfaction. Additionally product quality and pricing also has equal proportion in gaining customer satisfaction. However, service quality could be found as a vital facet in contributing towards customer stratification level.