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«Published Annually Vol. 6, No. 1 ISBN 978-0-979-7593-3-8 CONFERENCE PROCEEDINGS Sawyer School of Business, Suffolk University, Boston, Massachusetts ...»

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Successful organizational knowledge management is leadership. Management leadership plays a key role in influencing the success of KM (Holsapple and Joshi, 2000; Horak, 2001). Management must foster employees’ commitment, capability and confidence rather than try to control employees. Leaders are important in acting as role models to exemplify the desired behaviour for KM. Hence a leader such as the manager should therefore be able to influence his or her workers to accomplish their objectives and directs the enterprise in a way that makes it more cohesive and coherent in obtaining the desired organizational results (Sackman, 1992). Leadership involves envisioning the future, coordinating the development of a coherent mission for the organization, overseeing the development, controlling the processes and providing a motivation toward organizational culture and climate. The role of top management is to create the favorable climate for knowledge creation and to manage knowledge emergence (Binney, 2001). Poor leadership quality has been identified as a threat to successful implementation of knowledge management. (Greengard 1998) insisted that one of the most important factors for successful knowledge management is to ascertain that senior management recognizes its importance. (Hansen et al. 1999) mentioned that only strong leadership could provide the necessary direction, where a organization will need to implement and effectively deploy a knowledge management program.

Rewarding Schemes

KM literature (APQC, 2002; Davenport and Prusak, 2000; Gupta and Govindarajan, 2000), that organizational rewards motivate employees towards knowledge sharing and foster a knowledge culture. Indirect rewards such as appreciation and recognition play a greater role than the monetary incentives. Moreover, in promoting knowledge culture, long-term rewards such as profit sharing and employee share options (ESOPs) were observed as effective means when compared to the short-term incentives. In order to have proper knowledge management, organizations may need to create various reward mechanisms to encourage employees to share their knowledge. These include salary, bonuses in the forms of cash or stock options, better work assignment, career advancement and job security. If knowledge sharing is rewarded by such extrinsic benefits, individuals may be motivated to contribute their knowledge.

Training & Mentoring

The most important competitive advantage to any firm is its workforce – one that must remain competent through continuous training and development efforts. Training should provide employees and managers the skills and information to fulfill their responsibilities. Improved performance – the bottom line purpose of training and development - is a strategic goal for organizations. Learning organizations view training as a strategic investment rather than a budgeted cost. According to (Carneiro 2001), the importance of training capabilities for any organization is well recognized, especially for those agents concerned with preserving intellectual capital. (Cohen and Backer 1999) claimed the process of successful knowledge creation would not be possible without appropriate training procedures.

Conference papers © Knowledge Globalization Institute, Pune, India, 2012 Information & Communication Technology (Lee and Choi 2003) referred to technology as the presence of information technology support within an organization. Information technology plays a crucial role in eliminating boundaries to communication that often inhibit the interaction between different parts of the organization.

The important role of information technology is its ability to support communication, collaboration and the search for knowledge, and enable collaborative learning (Ngoc, 2005). Devenport and Prusak (1998) regarded information technology as both a key contributor and an enabler in the field of knowledge management. Marwick (2001) proposed that a number of information technology tools be applied to the different knowledge creation processes. Communication technologies are e-mail, video conferencing, electronic bulletin boards, and computer conferencing in facilitating organizations. (Song et al., 2001). Communication technologies provide ways to enable, intensify, and expand the interactions of organizational members and departments (Kendall, 1997). Therefore, information technology can help individuals create models and develop alternatives and solutions for tasks (Ngoc, 2005). In addition to creating, transferring, and storing knowledge through technological infrastructure, an organization must take steps to ensure that its knowledge is not stolen or used inappropriately (Gold, Malhotra, & Segars, 2001).

KM Process

Researchers have identified many key aspects of the knowledge management process, including creation, transfer, and use (Skyme & Admidon, 1998; Spender, 1996); capture, transfer, and use (DeLong, 1997); and identification, acquisition, development, sharing/distribution, utilization, and retention (Probst, Raub, & Romhardt, 2000). Avai and Leidner (2001) examined these various characteristics and produced four broad dimensions of process, namely, creation, storage/retrieval, transfer, and application. (Shin, Holden, and Schmidt 2001) integrated different terminologies used by various authors in describing the knowledge management process and then categorized the knowledge management process as creation, storage, distribution, and application.

Knowledge acquisition- Organizational knowledge acquisition is the process of developing new content and replacing existing content within the organization’s tacit and explicit knowledge base (Pentland, 1995). Many terms also have been used to describe this process: capture, creation, construction, identification, and generation. In accordance with Nonaka and Tackeuch’s (1995) SECI model, knowledge is created using four processes to convert tacit and explicit knowledge. The four types of knowledge processes are socialization, externalization, combination, and internalization. Nonaka and Takeuchi (1995) posited that tacit knowledge could be made explicit and vice-versa, through social interaction. Park (2006) argued that an organization should acquire knowledge throughout the organization and exchange knowledge even with external partners so that knowledge upgrade can happen constantly through bench-marking, best practices, and feedback of projects experience to improve subsequent projects.

Knowledge protection- Alavi (2000) asserted that creating new knowledge is not enough; people and organizations forget, and mechanisms are needed to store acquired knowledge and to retrieve it when needed. The concept of organizational memory aims for the same goal.

Organizational memory includes knowledge residing in various component forms that may include written documentation, structured information stored in electronic databases, codified human knowledge stored in expert systems, documented organizational procedures and processes, and tacit knowledge acquired by individuals and networks of individuals (Tan et al., 1998). Organizational memory includes individual memory (a person’s observations, experiences, and actions) as well as shared knowledge and interactions, organizational culture, transformations (production processes and work procedures), structure (formal organizational roles), ecology (physical work setting) and information archives (both internal and external to the organization) (Walsh & Ungson, 1991).

Knowledge sharing is all about disseminating and making available what is already known (Tiwana, 2000). For that reason, knowledge sharing is critical to a firm’s success as it leads to faster knowledge deployment to various segments of the organization that can greatly benefit from it (Syed-Ikhsan and Rowland, 2004). Hence, with this in mind, many SMEs wish to share knowledge, as they view co-operation with consumers as vital and without a doubt beneficial.


It is an observed fact that KM is actively being perused and practiced in large organizations. However there is not much literature that supports its usage in SMEs, especially with respect to auto component manufacturing industries. The study is endeavored to ascertain whether KM is being used in SMEs and to what extent KM is being practiced Research Objectives To explore the level with which Knowledge Management is followed in SMEs.

To study how the Knowledge Management practice & process is being adopted in SMEs Research Hypotheses Conference papers © Knowledge Globalization Institute, Pune, India, 2012 H01: KM is not being practiced at managerial level.

H11:KM is being practiced at managerial level.

H02 : KM is not being practiced at non-managerial level.

H12: KM is being practiced at non-managerial level.

Research Variables The Research study includes six strategic KM practice variables of managerial level. In non-managerial level, KM Processes - knowledge acquisition, storage & preservation and sharing and six KM dimensions variables i.e., Culture, Leadership, Employee participation, Rewarding Schemes & Training & mentoring & Information and Communication Technology (ICT) which are the facilitators for KM practice were tested.


Two different questionnaires were distributed to Small and medium sized Auto Component Manufacturing Enterprises of Pune region as the primary research instrument to collect necessary data. First at the Managerial level included the items to understand if KM strategic initiatives are known and initiated from top level. Other questionnaire for Non-managerial level which includes the KM process items and the KM dimensions which are the success factors to motivate, support and implement KM so as to have an effective practice. Each variable is measured using a five-point likert-scale The respondents at Managerial level were Proprietors, CEO, MD, VP, GM, Managers and the respondents at non-managerial level are technicians, engineers, and supervisors of various departments. Among 325 SMEs, 20% of the random sample taken which is 66 SMEs and responses were collected with no missing values and the total time spent on the data collection was approximately from Jan 2011 to July 2011.

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A total of 130 responses based on the list of SMEs obtained from MCCIA (Maharatta Chambers of Commerce Industries & Agriculture, Pune) were obtained both from managerial & non-managerial level of various departments and tested in this research.

Reliability & Validity Analysis

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Conference papers © Knowledge Globalization Institute, Pune, India, 2012 Reliability analysis showed that all constructs had the Cronbach’s alpha higher than.70 indicating highly reliable. Questionnaire was designed and shown to the experts in industries, academics and entrepreneurs to understand whether it looks valid "on the face of it." if it is useful from a public acceptance standpoint. Although this is not a very “scientific” type of validity, it is an essential component in enlisting motivation of stakeholders and to takeout the unnecessary items which may not be a measure of an accurate assessment Testing Hypothesis 1 H01: KM is not being practiced at Managerial level.

H11:KM is being practiced at Managerial level.

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To check the hypothesis 1, the researcher has calculated Arithmetic mean which is 6 items * 5 = 30/2 =15 and is less than the group mean which indicates that the null hypothesis is rejected and alternate hypothesis is accepted. Still t test (TABLE-3) was conducted to ensure the above. Hence KM is being practiced at Managerial level of SME. Further to analyze the level of KM practice at managerial level in SMEs, the researcher has calculated actual mean because the frequency of responses below and above arithmetic mean are not satisfactory to understand the level of practices. The Minimum and Maximum response values were 24 & 47 respectively as shown in TABLE - 4.

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a. - The organizational benefits of a knowledge-centric organization are clearly understood by the strategic level.

b. Knowledge management is a top priority in our organization c. Has a value system or culture intended to encourage knowledge sharing.

d. Uses partnerships or strategic alliances to acquire knowledge e. Has a clear and strong commitment to knowledge management initiatives f.

Has reward systems for continuous learning or knowledge sharing Now with respect to the above statistics, test of equality of variances (Table-7) for the two groups of responses that is high (= or 35) and low (35), group statistics were as follows:

Table - 7 ANOVA-Levene's Test for Equality of Variances

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From the above table-7 it is clear that the dimensions b and e are showing a significant difference among the groups which means in managerial level if the Knowledge Management is in top priority and if there is a clear and strong commitment to KM initiatives by the executives then those will be significantly different from others.

Testing hypothesis 2 H02 : KM is not being practiced at non-managerial level.

H12: KM is being practiced at non-managerial level.

To check the hypothesis 2, there are two sections. First section is KM infrastructure enablers / infrastructure variables which includes Culture, Employee participation, Leadership, Rewarding schemes, Training & Mentoring and ICT. Section two includes KM Process variables Knowledge Acquisition, Knowledge Storage & Preservation and Knowledge Sharing.

KM infrastructural dimensions

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The researcher in order to analyze the level of KM practice of SMEs at non-managerial level, has calculated Arithmetic mean that is 53 items*5=265/2=132.5 which is less than the group mean hence actual mean is calculated because the frequency of responses below and above arithmetic mean were not satisfactory to understand the level of practices. The Minimum mean response is 150 and Maximum mean response is 290. Hence actual mean is 290-150=140 and 140/2=70 (approx) hence actual mean = 290-70 or 150+70 which has been taken as 220 for KM infrastructure responses. Table 9 lists the frequency & percent of mean responses ranging from 150 (minimum) to 290 (maximum)

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