ORGANIZATIONAL CAPABILITIES AS PREDICTORS OF EFFECTIVE KNOWLEDGE MANAGEMENT: AN EMPIRICAL EXAMINATION

Knowledge management has become one of the most important trends in business, yet many knowledge management initiatives fail. To understand the success and failure of knowledge management, firms must identify and assess the organizational capabilities required for the effort to prosper, which is the focus of this study. Literature has offered important theoretical grounding for this study with regard to organizational capability as a predictor of knowledge management effectiveness, but empirical examination is lacking. The organizational capabilities have been identified as knowledge infrastructure capability (consisting of cultural, structural, and technological) and knowledge process capability (consisting of knowledge acquisition, conversion, application, and protection). The research model was adopted from Gold, Malhotra, and Segars (2001). This research broke new ground in the field of knowledge management by examining the relationships between knowledge infrastructure capability, knowledge process capability, and organizational effectiveness from the dual perspective of the team (within business units) in contrast to the organization (across business units). Organizations develop knowledge infrastructure to drive desired behaviors, yet knowledge workers develop processes to circumvent the organization\u27s infrastructure (cultural and structural barriers). This may contribute to the problem of knowledge management failure. However, the relationships between knowledge infrastructure and knowledge processes have not been empirically examined, until this study. In addition, most knowledge management research is conducted at the organization level, yet most knowledge management implementation occurs at the team level (project teams, business units, social groups). To help bridge the gaps between theory and practice, this study aligned the unit of analysis more closely with the practitioners\u27 level of implementation. Using only the organization as the unit of analysis would provide little guidance for business leaders in how they can influence the success of knowledge management programs, and it would present an incomplete picture when assessing the relationships between organizational capabilities and knowledge management effectiveness. The organization perspective helps with generalizability of this study, while the team perspective leads to results of a more informative and prescriptive nature for practitioners. Because the field of knowledge management is driven by practical need, this study offers many important managerial implications. Data was collected from several business units of a Fortune 100 multinational firm, and assessed using Structural Equation Modeling. The structural models were developed to test the hypothesized relationships and answer the research questions. As a result, this research provides empirical evidence that knowledge management capabilities are a contributing factor of organizational effectiveness. In addition, it can be concluded that firms with superior absorptive capacity and knowledge integration processes will improve their knowledge management capability. The results of this study include the findings that knowledge infrastructure drives knowledge processes, that organization-level knowledge processes drive team-level knowledge processes, and that knowledge protection is seen as a corporate responsibility rather than a team or individual responsibility. Overall, the findings conform to the literature and lend credibility to Gold et al.\u27s (2001) theory that effective knowledge management, as measured by its impact on organizational performance, is dependent on the firm\u27s knowledge infrastructure capability and knowledge process capability