Overview of the Research Article
The research paper has given an extensive discussion on contribution of knowledge and knowledge management to organizations performance. The paper has given arguments to support its various arguments using sections. The abstract contains the purpose, methodology, findings and limitations of the research. In the introduction the authors have given the benefits of knowledge and knowledge management as well as the obstacles of knowledge management. The section on knowledge contribution to performance has discussed the relationship between innovation, knowledge, quality and cost of production. In the performance-oriented knowledge management approach, various perspectives of knowledge have been analysed. The article has discussed knowledge from a knowledge application perspective. The article given figures on performance-oriented knowledge management approach, and link between knowledge and performance (Chang & Ahn, 2005, pp. 114). Results of the research have been given and discussed.
Research Question, Article Purpose and Methodology
Chang and Ahn in the article Product and process knowledge in performance-oriented knowledge management approach aims at understanding ways in which knowledge participates in improvement of business performance, the amount of knowledge required. The understanding of the knowledge contribution, was to help them in establishment of principles necessary for knowledge management activities to be effective. The authors of the article required a research method or design capable of modelling the relationship between the performance and knowledge. Cobb-Douglas type production function was considered effective, as it is creates opportunity to estimate knowledge elasticity of performance, necessary in understanding of the amount, and how to allocate resources for knowledge management. The entire process was demonstrated using laboratory experiment (Chang & Ahn, 2005, pp. 114).
Literature Supporting the Development of the Research Approach
Business environment is characterized by volatility and uncertainty. Organization’s performance is directly proportional to its dynamic ability to learn from various perspectives and its ability to capture market opportunities as they develop, rather than its size, resource, structure, or its geographical scope. For example, an organization can be large in terms of structure and resources, located in a conducive geographical locate serving a large scope, but without the ability to learn and to capture new market opportunities means failure in its operations, or a standstill. The ability to learn creates innovative opportunities, necessary in meeting the diverse and advancing markets. Ability to get new market opportunities facilitates in marketing of products, and learning the trends thus getting the ability perform and produce in accordance to the market needs. Organization’s core competence is dynamic. Many people have carried out researches tho determine the nature and source of dynamic capabilities. Some of these researchers such as Morgan and hunt consider market orientation as the major core competence of organization, while others like Berman and Yeung oppose claiming that human resource determines the dynamic capability of any organization. According the the article, individual’s and organizational knowledge has a lot for core competence of the organization especially in volatile and competitive market. Various studies have been made to prove the argument. Each study has a specific focus the many aspects of dynamic capabilities but the the approaches of these studies are based on the organizational knowledge and attention of the organizations as the valuable assets necessary for its success (Chang ; Ahn, 2005, pp. 116)
There are many hindrances which block knowledge management practices. In order to effectively implement knowledge management practices in an organization, their impact in the organization need to be determined. The practices are hindered by the difficulties faced determining the amount and the value of the knowledge, and its impact on performance. Authors of the article argues that performance-orientation is achieved when knowledge contribution to performance is determined, understood, and used to achieve specific business objectives. When performance orientation is involved in improving organization performance, management and production activities are directly linked to market performance.
It is hard to tell the area or amount of knowledge, and method to use when managing knowledge due to its intangibility, and other characteristics of knowledge. However, the knowledge acts as a resource for competitive advantages of organizations. Unlike other manageable assets, knowledge is invisible thus hard to manage. Use of the effects of the knowledge on organization’s performance makes tits management easier. It can also be made visible for easier management.
Knowledge contributes to improved performance of various organizations, while lowering cost through innovative process and products. Knowledge is the key to innovation. Every innovation is based on the knowledge in the afield. These innovations improve the performance of the organization. For example, with advances in technology, diverse market, and diversity of various aspects of human life such as lifestyle and culture, new needs arises keep arising. As one need is meet others arise. The diversity and advances expects the organization to diversify to meet the changes. This means that the organization is required to be innovative in order to meet the needs. Without knowledge, there can be no innovation. Organizations with knowledge as asset are actively involve in innovative activities, which improves the performance of the work force to meet customers needs, and subsequent development of the organization. Through knowledge management, organizations can get easy access to knowledge, and exposes the organization to new opportunities. These benefits are achieved when the organization acquires and utilizes innovative measures in various activities and operations. Product innovation influences performance by creating new, better and higher priced products. Customers usually value new and better products without considering the prices. The contribution of process innovation to organization performance is based on low cost of production. When quality products are produced at low cost, and given higher prices, they win customers interest, increasing sales and the organization’s income.
Many previous studies assumes that knowledge improves performance. However the knowledge based view of organizations together with capability view have different approach. Their approach to knowledge has no details regarding to the its relationship with performance. This is not similar in all cases. Empirical studies especially in biotechnology industry, service industries, food manufacturing industries and in multi-national manufacturing industries have identified relationship between knowledge and performance. These industries are involved with diverse production and manufacturing. For them to actively remain in the market and they need to continually improve their performance. This involves both product and process innovation, which uses knowledge as the drive force.
The professional service industry especially accounting organization, management and information technology consultants also relate the organization’s performance to knowledge with regard to quality and cost. Knowledge management ensures reduction of organization’s costs by disseminating and apply various sources of knowledge in the organization, and improving the quality of products and services by creating opportunities for knowledge creation. In every organization, there is at least a source of knowledge whether in capital, human resource or in any other aspect of the organization. At the same time various activities are associated with cost of varying weigh. Organization which consider managing the available knowledge create opportunities for increasing the quality of their product, at low cost.
Ability to produce quality products and services at low cost is considered as organizational competency achieved through innovation and knowledge management. Organizational competences are necessary for effective running of organization. The competencies include the business-level organizational process such as customer service and quality control, and generalized skills such as tight torelance engineering. The competencies add value to organization activities and performance through quality and low cost production.
Organizations have various focuses of knowledge management depending on their views of knowledge. Knowledge can be viewed as object where by the knowledge management focuses on building knowledge stock and managing them, or as a process where the knowledge management is concerned with the flow, creation, distributing and sharing of knowledge.
Research Procedures, Sample/Participants Analysis.
The entire research project was done through the use of Cobb-Douglass production function that weighed management’s knowledge with respective performance. The function was applied due to its accuracy in attaining findings of interest. A regression analysis was used in investigating the the knowledge elasticity of performance oriented management. The findings results attained through the analysis can easily be applied to explain several managerial implications. The research project was quantitative. It is in this regard that the authors have commented on the importance of having a real world application of the theories contained therein, which would help in showing this research’s significance. The authors have further stipulated that theirs was among the first studies to be performed, especially on matters relating to elasticity of performance oriented management. The combination of Cobb-Douglass production function and the regression analysis in addressing the research question resulted to answers found by other researchers interested in ways and means of allocating resources in the processes of developing knowledge used in managerial operations. The research findings therefore succeeded in providing guides on how individual companies can increase productivity throughout their managerial ranks (Chang ; Ahn, 2005, pp. 125) Critique of Results of the Study
Although the article has argued that knowledge improves the performance of organization, in most practices knowledge is not used alone. The article has not provided details from the research to clearly show that that performance of the organization is entirely related the knowledge. The results from the research are not reliable the knowledge is approached without giving a details of its relation to knowledge. From the knowledge approach given in the study, we get insufficient understanding of the role of knowledge organization performance.
Organizations need to utilize available knowledge in various activities and practices. The knowledge should also be managed in order to improve the performance of the organization. Although it is hard to measure the value of knowledge, organization should use the effects or rather the outcome of the knowledge to determine its value in the organization performance. Knowledge and knowledge management are necessary in improving performance as they improve quality while minimizing cost of production. Knowledge initiates the product innovation process, and it ensures quality products at lower cost. This is necessary in developing organizational competencies. Organizations need to utilize knowledge and knowledge management in order to acquire competencies.
Chang, S., and Ahn, J. (2005). Product and process knowledge in performance-oriented knowledge management. Knowledge Management, 9.4, 114-127