Knowledge management practices within

Hong Kong organizations

The Author

Dr. Robert R. Edmonson, CEO of Paradigm21 Group a Hong Kong management

consultancy, executive coaching and corporate training organization; Adjunct professor
with University of Bradford (UK) and University of Sunderland (UK) Hong Kong MBA
programs. Dr Edmonson is also the author of the popular leadership book entitled, “In
Chaotic Times….What Great Leaders (Should) Know”.

Abstract

Purpose – This paper investigates how knowledge is currently being collected, distributed,
managed and the perspective of KM’s strategic significance to performance within a broad
range of Hong Kong organizations.

Design/methodology/approach – A questionnaire was administered to a broad cross

section of Hong Kong business organizations to elicit input regarding current knowledge
management practices within the organization, their perspective on its value to
organizational performance and competitive advantages.

Findings – The results indicate a fuzziness exists concerning KM’s potential benefits.
Majority of respondents felt a KM policy existed, while a smaller number did not and even
less did not know. Findings show a high dependence on personal networks and a high
use of IT tools such as Intranet, Groupware and other decision support tools. Barriers to
sharing included power loss, appearing dependent, a basic unwillingness to share with
national culture possibly playing a role. Incentives did not appear to encourage sharing
with management of KM programs not focused on a particular department or individual.
Respondents were evenly divided over strategic benefits but felt the existence of an
internal culture that promoted sharing could result in competitive market advantages.

Practical implications – Firstly, it provides a better understanding of KM issues within

Hong Kong organizations, the current status of KM’s implementation and readiness to
accept and adopt best KM practices. Secondly, the findings also offer business
practitioners a better understanding of the internal mechanisms necessary to leverage a
firm’s specific resources. Finally, the results shed additional clarity on the fuzziness
surrounding KM’s correlation to being strategically significant to the firm.

Originality/value – Unlike previous studies the project used a holistic approach as

opposed to best practices firms. The findings contribute to previous research and provide
insights into current practices which identified differences and gaps; recognized areas of
improvement; and should help stimulate use of KM and provided an understanding of
internal mechanisms necessary to leverage internal resources.

Article Type: Research paper

Keyword(s): Knowledge management; human capital; strategic planning; sustainable
competitive advantage; information; communities of practice, Hong Kong.
1.0 Introduction

The global business environment has amplified the importance of the unique knowledge
that organizations possess (Singh et al., 2006). Additionally, the value of its human
resources and the knowledge possessed has long been recognized for its contribution to
corporate success (Ritter and Choi, 2000). This has established knowledge management
(KM) as the foundation to competitive advantages and is viewed as a primary competitive
success factor – and vital that corporations implement inventive knowledge management
tools and corporate actions to significantly affect, add to and maintain market advantages
(Ritter and Choi, 2000; Grossman, 2006; KMPG, 2003).

As a result, the concept of organizational knowledge, the way it is controlled and

intellectual assets has attracted increased management awareness and organizational
researchers have branded KM a key source of competitive market advantages (Matusik
and Hill, 1998; Davis, 1998; Nonaka and Takeuchi, 1995; Nonaka, 1991). Increasingly,
organizational performance and competitive advantages are relying heavily on its human
capital knowledge by designing and implementing programs that effectively use
knowledge both internally and externally (Silvi and Cuganesan, 2006). Thus, it has been
theorized that a firm’s value can be found more in its tacit, intangibles such as intellectual
and service competencies rather than in its tangible, explicit assets (Quinn, 1992).

The research project investigates how knowledge is currently being collected, distributed,
managed and the perspective of KM’s strategic significance to performance within one of
the leading Asian economies: Hong Kong. The objective is to update and extend previous
Hong Kong studies investigating KM within business enterprises (Ritter and Choi, 2000;
Gloet, 2002; Fong and Cao, 2004).

Against this background, this research will identify and explore KM practices using
five themes: 1) Knowledge Activities examines how knowledge is acquired and the
current situation of enterprise learning processes; 2) Knowledge Tools reviews how
information is made accessible, shared and communicated from both an IT and
human resources behavioral perspective; 3) Reasons for Managing Knowledge will
provide an enhanced understanding of the rationale for encouraging and using KM
practices; 4) Knowledge Responsibility presents who is responsible for managing and
supporting knowledge programs and activities and; 5) Knowledge Results reveal the
respondent’s perspective of KM’s strategic significance and its observed influence on
the organization.
2.0 Report Composition
This report consists of Section 3 which discusses knowledge and KM to develop a
basic understanding of these principles relative to their scope while building a fluency
in terminologies related to the field of KM. The review cannot possibly evaluate the
hundreds of KM researchers and writers, but attempts to present the ideas, concepts
and theories of both the early pioneers and continuing leaders in the field of KM.
While the literature acknowledges the value and significance of knowledge and KM, a
variety of definitions and perspectives exist. Section 4 outlines the four research
questions and hypotheses created to examine KM practices in Hong Kong
organizations. The research method and design employed to address the research
questions are presented in Section 5. Next, Section 6 introduces an analysis of the
survey data with findings compared to previous research studies. Finally, the
implications of the research findings, research limitations and recommendations
conclude the report.

3.0 Differing Views on Knowledge

Developing and sustaining a competitive advantage is a continuous journey for most
companies, but regarded essential to long term organizational success. Although
there is little agreement on the definition of knowledge, most practitioners and
researchers agree that sharing knowledge (Lin and Lee, 2004; Davenport and
Prusak, 1997) can exploit core competencies (Drucker, 1995; Beckett et al., 2000)
and establish unique market advantages.

While knowledge has been considered critical to long term organizational success,
the term has a variety of definitions creating confusion among practitioners,
academics and theorists. For example, it has been defined as: acting and making
decisions (Kanter, 1999), contextual information and ability to apply it (Davenport and
Prusak, 1997), professional know-how (Bourdreau and Couillard, 1999) information
used for action, personal convictions that inspire individuals to take effective actions
(Alavi and Leidner, 1999) reliable information that can be trusted, information made
useable (Mahlitta, 1996), and valuable information contributing to organizational
value.

To further complicate matters some researchers describe knowledge as something

relocated from one point to another such as ‘transfers’ (Davenport and Prusak, 1998)
or ‘re-used’ (Ruggles, 1997) and ‘distributed’ (Probst et al., 2000) which could imply
that knowledge is people movement. Skyrme (1999) assumes a more pragmatic
perspective by avoiding this connotation and focuses on the term ‘sharing’ to describe
how organizations distribute and leverage knowledge for organizational advantages.
However, knowledge is generally distinguished by two forms: tacit and explicit
(Polanyi, 1966).

Tacit Knowledge
Tacit knowledge has a variety of definitions: practical expertise, hard to explain
(Teece, 1998), intangible information residing within individuals demonstrated by
actions and includes personal beliefs, perspectives, and values, conveyed only
by watching and doing, innately understood and used (Zack, 1999b), embedded
in specific actions, skills and activities (Nonaka, 1994). Consequently,
separating, warehousing and distributing the entire knowledge within a human
cannot be done (Davenport and Donald, 1999).

Explicit Knowledge
Explicit knowledge is based on broad research and is considered more tangible
but based in tacit knowledge that has been codified, distributed and evidenced
by verbal statements, mathematics, specifications and operational manuals
which can be characterized as data, contained in language or coding
knowledge previously warehoused, clearly articulated (Zack, 1999b), clarified,
coded and distributed using symbols or common language (Alavi and Leidner,
2001).

The two knowledge forms are interlinked and holistically represent organizational
resources and assets as tacit knowledge is the basis for identifying, acquiring,
interpreting and distributing explicit knowledge (Fahey and Prusak, 1998). The tacit –
explicit split has received criticism from researchers that question its usefulness and
currently considered a marginal and emerging concept (Alvesson, 2004). For
instance, Alavi and Leidner (2001, p. 112) maintain that explicit and tacit knowledge
are “mutually dependent and reinforcing qualities of knowledge”. Due to their
inextricable relationship a definite overlap exists only serving to enhance sharing and
dissemination with technology providing a foundation. Recognizing this relationship,
organizations should endeavor to thoroughly understand knowledge distinctions and
flows to help formulate an effective intranet from which to access valuable knowledge
assets (Alavi and Leidner, 2001).
3.1 Concept of KM
Knowledge management has deep roots as the concept of knowledge and workers
was first introduced by Peter Drucker. However, it was Karl Wiig who pioneered the
term ‘knowledge management’ in 1986 during a United Nation’s speech and
introduced an in depth study of KM to the world that emphasized its importance and
linkage organizational performance (Wiig, 1993; Wiig, 1994; Wiig, 1995). Shortly
thereafter, Karl-Erik Sveiby presented a revolutionary way to measure knowledge and
its organizational value with the ‘invisible balance sheet’ and economists began using
the term ‘intellectual capital’ to describe intangible assets contributing to overall
organizational value. In 1991, Nonaka and Takeuchi presented how Japanese firms
developed knowledge with innovation. Karl Wiig continued his research by examining
the basis for knowledge management; how individuals and companies produce,
symbolize and employ knowledge; and particular methods and pragmatic approaches
to the management of knowledge (Holsapple, 2003).

3.2 General Perceptions of KM

The literature has supported a general consensus among theorists, researchers and
business practitioners that KM is strategically important and crucial to organizational
success. However, the cultures and enterprises that have actually accepted that a
causal relationship exists between KM systems, competitive advantages and
contributes to performance remain limited (Davenport, 1999; Gloet, 2002; KMPG,
2003; Nonaka and Takeuchi, 1995; Ritter and Choi, 2000; Wiig, 1997). Although KM
is believed to be essential to organizational success, the literature argues that market
advantages go to organizations that actually leverage knowledge with formal KM
processes rather than to those with the most or best data and knowledge (Pfeffer and
Sutton, 2000).

A 1997 study of KM (Delphi Consulting Group) categorized knowledge management

approaches into two perspectives – logistical and strategic. The logical approach sees
KM as effective at organizing valuable information, IT based and improves
organizational performance (Fiddis, 1998), while the strategic thinkers see KM as a
powerful tool for organizational change and sharing tacit knowledge (Fiddis, 1998)
that establishes competitive market advantages.

Another 2004 (Fong and Cao) empirical study of Hong Kong and UK firm’s findings
revealed that 25% fell into the strategic camp while 50% adopted a logistical
approach. Others (9.8%) felt KM was simply previous technologies revamped and two
respondents believed KM was a fad. Remaining responses centered on having no
insight into KM or its value. The overall results indicated that respondents viewed KM
as beneficial but most were ignorant as to its meaning and some even fearful of its
implementation.

3.3 Fundamental Elements of KM

The existing KM literature identifies the essential ingredients of KM as people,
processes and IT (KMWG, 2001; Moffett et al., 2003; Handzic and Zhou, 2005;
Dueck, 2001).

People are a foundation element as they are responsible for actually creating, sharing
and applying knowledge within the organization. The processes associated with KM
serve to obtain, create, organize and distribute knowledge. And the IT or technology
segment warehouses and makes the knowledge available to users. Each element
discussed below is dependent upon the other for effectiveness (Fong and Cao, 2004).

People: are responsible for selecting others to share with, deciding the topic,
choosing the method, and finally utilizing the knowledge. So the ultimate
success of any KM program rests on the individual’s acceptance and willingness
to share with others. Sharing knowledge can create a positive environment of
reciprocity where the giver can anticipate receiving equal knowledge in the
future, gain respect as an expert and personal fulfillment and satisfaction
(Davenport and Prusak, 1998).

However, obstacles to sharing may include a fear of collaborating with the

wrong people and simply being used without recognition or reward (Empson,
2000). Other reasons for a reluctance to share may include not sure with whom
to collaborate or how to convey the knowledge and national culture values may
be a deterrent (KMWG, 2001). The foundation for establishing a knowledge
sharing culture is trust at both the personal and organizational levels coupled
with an environment that encourages and compensates sharing while rejecting
and even punishing non participants (Empson, 2000).

Processes: uncovering, obtaining, interpreting, organizing and sharing

knowledge with the right parties, then motivating people to utilize it is a
continuous journey (Fong and Cao, 2004). Nonaka and Takeuchi (1995) feel
knowledge and its management is dynamic and a constant process of
accumulation and exploitation of undiscovered knowledge. To illustrate the
conversion of knowledge from one stage to another, they created the SECI
model.

As previously discussed, the two types of knowledge are classified as tacit and
explicit. Nonaka and Takeuchi (1995) analyzed Japanese firms and created the
SECI model (depicted in Figure 1.0) to illustrate the dynamic nature of
knowledge one form to another.

Figure 1.0 SECI Model (adapted from Nonaka and Takeuchi,1995)

Socialization: creating tacit knowledge by personal sharing expertise,

discussing, brainstorming, know-how and experiences;
Externalization: articulation and linkage of tacit knowledge to explicit knowledge
which can be comprehended by others and driven by metaphors, analogies and
models;
Combination: combining tacit knowledge such as collecting data from various
departments to create a consolidated report.
Internalization: explicit knowledge is used to create tacit knowledge for
organizational sharing, distribution and use.

As mentioned, the SECI was initially developed for Japanese firms and applied
in specific Western firms, however, in an organizational sense, the SECI theory
is a dynamic process that expands throughout the firm, continuously upgrading
knowledge and infiltrating human capital both vertically and horizontally.

An alternative approach to understanding the dynamics of knowledge was

developed by Cook and Brown (1999). While the SECI model focuses on
knowledge conversions, the Cook and Brown model argues that knowledge is
comprised of distinct “ways of knowing” and feels one knowledge form cannot
be converted into another. Rather they complement one another. They contend
that groups and individuals can possess both tacit and explicit knowledge
resulting in four knowledge classes (see Figure 2.0).

Figure 2.0 Cook and Brown Model (adapted from Cook and Brown, 1999)

The following presents an overview of the Cook and Brown’s framework of

concepts, stories, skills and genres:

Concepts: knowledge individuals acquire and articulate explicitly and the

simplest to codify into technology systems.

Stories: fall under the personalization strategy (CoPs) and used to convey
the failure or success achieved. Persuasion is achieved by expressing
events in ways that represent the particular cultural behaviors and have
meaning.

Skills: tacit knowledge of individual expertise.

Genres: refers to “know-how” embedded within the organizational structure

using certain words, language, methods of communications. This element
establishes repetitive actions to address reoccurring situations or events
and is a shared view (Yates and Orlikowshi, 2002).

Basically, Cook and Brown argued that not every action taken by collectives can
be meaningfully and usefully reduced to the actions of individuals in them.
Whereas a literary genre provides a frame for understanding and interpreting
what we read, Cook and Brown propose that an ‘organizational genre’ extends
this idea to include various physical and cultural artifacts, expressed as different
types of things (such as product design) and different types of activities. Cook
and Brown emphasize that the key point is not knowledge but knowing -
suggesting a need to think about managing active processes rather than about
captured, codified and easily transferable assets.

Technology: Although technology has little connection to knowledge, its data

warehousing and communication enable individuals, irrespective of their
geographical location, to quickly and easily share knowledge using
communication methods such as email, groupware, internet, videoconferencing
and intranets. Technology enables firms to distribute knowledge quickly and
smoothly throughout the organization (Alavi and Leidner, 1999). Today,
organizations view technology as the basic challenge to effectively designing
and implementing a successful KMS within the company (Monitor, 1998) and
launched KM projects focusing on IT to acquire, warehouse, access and share
explicit knowledge (Zack, 1999a). In addition to the previous methods to
communicate using technology other applications include expert systems,
neural nets, fuzzy logic and generic algorithms to acquire and codify data
(Laudon and Laudon, 1998).

Although technology is a great facilitator for managing and sharing knowledge,

studies show individuals are not automatically willing to share due to a variety of
reasons creating barriers to implementation and a successful KMS (Mentzas,
1999).

Early adopters of KM principles took primarily an IT approach viewing KM with a

short-term, quick fix ‘information’ perspective rather than recognizing its long
term competitive value (Hislop, 2005). Even today many companies still
emphasize IT as opposed to a balanced approach when designing and
implementing a KMS. One of the findings in the Gloet (2002) comparison of
Hong Kong and Australian organizations supports the contention that
companies generally adopt either an IT or people KM strategy. For instance, the
findings showed that both Hong Kong and Australian firms practicing KM
predominately adopted an IT strategy, followed by the people aspect and thirdly,
a shared structure. Even organizations polled that were not actively engaged in
KM still indicated that if they implemented a program IT would be their primary
focus. Given the high context Hong Kong culture (Berrell and Gloet, 1999), it
could be argued that these cultural types are prone to adopt a more explicit,
 structured and controlled, IT approach to organizational communications (Berrell
and Gloet, 1999; Adler, 1997; Hall, 1976) as opposed to the high context
Western cultures (Gloet, 2002).

However, the 2006 Asian MAKE Study by the Global Most Admired Knowledge
Enterprises revealed that many Asian organizations relied more on people-
based strategies to implement KMS as opposed to the majority of US firms that
focus primarily on IT to acquire, interpret and distribute knowledge throughout
the organization.

Other KM studies suggest that even companies without a clear people, process
and IT structure, such as Black and Decker, still recognize the importance of
establishing an effective KM internal culture that involves both the human and
process elements (Pemberton, et al., 2002).

While some research findings indicate organizations emphasize the human

aspect over IT, overall, the literature suggests that establishing a balance
among people, processes and IT is crucial to the successful facilitation of
organizational knowledge flows. Most experts agree that knowledge is inherent
in people (Fahey and Prusak, 1998; McDermott, 1999a; Coakes, et al., 2002)
and that IT should assume a supplementary role (Alavi and Leidner, 2001) with
primary KM initiatives concentrated on nurturing the human element (Robertson
and Hammersley, 2000). To leverage the human element organizations should
consider developing suitable processes (Hammer, et al., 2004) that support,
encourage knowledge sharing while bridging the IT and human capital gap.
Nevertheless, an over emphasis on processes could actually inhibit informal
sharing and communications among people which drives organizational
performance, so a balance is essential (Brown and Duguid, 2000).

4.0 Research Questions and Hypotheses

The literature review resulted in the formulation of four questions designed to
investigate KM practices within Hong Kong business organizations:

RQ1: What current practices and processes are used to acquire knowledge,
information and know-how?

RQ2: How is knowledge shared and what are the reasons to resist sharing?

RQ3: What are the strategies used to manage knowledge within the firm?
 RQ4: Has using KM practices been of strategic importance to the organization?

4.1 Hypotheses
The research questions were examined using both exploratory and empirical testing
methodologies by means of the following hypotheses:

H1: There are no formal policies and systems to promote acquiring, sharing and
distribution of knowledge.
This hypothesis will attempt to determine the extent respondent companies have
instituted formal KM practices, non-formal management encouragement and an
absence of KM policies.

H2a: The current KM policies and practices in the Hong Kong companies have not
encouraged the usage of systems to share knowledge.
The focus of this hypothesis is on first clarifying where information and knowledge is
derived, then examining the systems utilized to share knowledge and finally,
reviewing the KM tools and techniques are explored to assess respondents’
preferences and activity level.

H2b: No association exists between incentives and reducing resistance to sharing.

This hypothesis is designed to explore the reasons to resist sharing with a
concentration on analyzing whether offering incentives has reduced resistance.

H3: There is no preference to a specific department or individual to manage

organizational knowledge.
The concentration of this hypothesis is to investigate the strategic approaches and
methods Hong Kong business organizations use to manage its internal knowledge
resources.

H4: There is a significant relationship between KM practices and strategic benefits to

the company.
The probability of producing a clearly defined result is highly improbable. Although
practitioners and researchers argue that KM is directly related to organizational
performance and is strategically significant, unfortunately, no empirically proven
framework exists to substantiate a causal relationship between KM practices,
competitive advantages and financial performance (Hoffman et al., 2005; Davenport,
1999). Due to the absence of an accepted model, this approach is designed to
measure the respondent’s perception or belief as to whether managing knowledge
has been strategically significant to firm performance. To accomplish this goal,
specific questions were asked to obtain each respondent’s opinion.

5.0 Research Methodology and Design

The positivist approach and quantitative methodology is utilized to address the
research questions and hypotheses. To collect sufficient data, an online survey and
self-administered questionnaire were modeled from previous KM studies to ensure
effectiveness. Because previous KM studies have narrowly focused on only ‘best
practice’ organizations, high management levels, single industries, specific functional
areas and single national cultures (Ritter and Choi, 2000; Davenport, 1999; Gloet,
2000; Gloet, 2002; Fong and Cao, 2004; Choi et al., 2004; Cheung et al., 2007; Yao
et al., 2007), this study assumes a holistic approach by spanning all staff levels, non-
gender specific, across various industry sectors and functional areas within a variety
of multi-culturally staffed Hong Kong enterprises comprised of: publicly-traded and
private firms, small and medium enterprises (SMEs), local conglomerates and foreign
national enterprises (MNCs). Respondents were sourced from Hong Kong education
agents and downloaded from public domain databases.

5.1 Population Sample

Because previous KM studies narrowly focused on only ‘best practice’ organizations,
high management levels, single industries, specific functional areas and single
national cultures (Ritter and Choi, 2000; Davenport, 1999; Gloet, 2002), this study
assumes a holistic approach with a goal to provide more reliable findings by avoiding
specific factors particular to an industry, gender, company size, staff level, functional
area, organizational / national culture, and government and private enterprise. The
surveys span all staff levels, is non-gender specific, across various industry sectors
and functional areas within a variety of multi-culturally staffed Hong Kong enterprises
comprised of: publicly-traded, private firms and government agencies, small and
medium enterprises (SMEs), local conglomerates and foreign national enterprises
(MNCs).

A total of 2644 questionnaires and invitations were distributed that elicited a response
rate of 10.7%. Previous research has demonstrated that a 100-400 person sample
provides sufficient data for analysis and is statistically appropriate (Jennings et al.,
2003). In terms of anticipated response, Ernst & Young performed a KM study with
North America and European companies receiving a 4.4% response (Springer, 2007).
Given this benchmark KM study, the response rate is acceptable as it exceeds the
benchmark rate established by this previous notable study within the KM realm.

6.0 Data Analysis and Discussion

A descriptive analysis revealed that respondents were relatively evenly distributed
across organizational size ranging from < 50 to >5000 employees. Collectively, four
industries represent the majority of respondents: Financial Services (19.4%),
Manufacturing (17.9%), Business Services (12.2%) and the Retail Trade sector
(9.1%). These results are not surprising as they serve to support the fact that Hong
Kong is a world-class financial and international trade center and is consistent with
the Hong Kong business environment. The response basis was predominately
organization-wide as opposed to a department or unit. The majority of respondents
(48.7%) characterized the KM perspective considering all organizational factors and
systems, not individual, branches, departments or units. Additionally, respondents
represented all levels of the organizational hierarchy from front line staff to executive
management. Generally, the data can be considered holistic as it covered a relatively
broad cross-section in terms of organizational sizes, industries, basis of responses
and hierarchy levels.

6.1 KM Awareness and Practices

Research question one and accompanying hypothesis concern the formal policies
and systems that encourage the acquiring, sharing and the distribution of knowledge.
The results showed the majority of respondents (42.6%) stated a formal KM practices
policy existed, while a reduced number (28.2%) did not and even less (20.1%) did not
know. In addition, the results also implied that organizational size could influence
whether a firm actually implements a formal KM practices policy however, the data
was not convincing that KM practices were industry specific. The analysis of
organizations without a formal KM practices policy, but encouraged and promoted
knowledge sharing, implied no relationship to company size or industry type.

In summary, these results suggest that Hong Kong companies across a broad
industry, management level, and size possess a formal KM practices policy and or
encourage knowledge sharing within the firm. However, these findings are contrary to
previous Hong Kong KM studies: Ritter and Choi (2000) where the majority of
respondents reported formal strategies and policies were non-existent; Gloet (2002)
found that most respondents (45%) were unsure if KM was actually practiced and; the
Fong and Cao (2004) study revealing only a small percentage (27.8%) had an
existing KM strategy.
6.2 Knowledge Sources, Systems Used and Sharing Obstacles
The second research question and hypotheses pertain to sources of knowledge,
systems used, sharing barriers and incentives designed to encourage sharing.

Knowledge Sources
The respondents’ knowledge sources were examined as companies must first identify
and assess the organization’s current activities and knowledge assets. This
assessment is critical to structuring an effective knowledge management program.
The findings suggest that people are highly dependent on the personal network of
contacts and interactions to acquire useful information and knowledge. These results
support the Fong and Cao (2004) Hong Kong study which identified the most frequent
and useful sources of knowledge sharing as: personal experience, internal sharing by
colleagues and communications with external sources. The Yao et al. (2007) Hong
Kong government research also produced comparable results indicating the most
common knowledge staff sharing activities were face-to-face and informal personal
networks.

KM Systems and Processes

The systems and processes used for accessing and sharing knowledge were
reviewed using two variables. The results indicate that companies with a formal KM
policy predominately used the Intranet, Video Conferencing, Data Warehousing and a
CRM system, while the internal Yellow Pages, Groupware and Storytelling, and
Decision Support tools showed a weaker usage and popularity. Further, the Internet,
Email and Informal Group meetings did not show any significance as KM tools.

Of the companies that only encourage knowledge sharing, the results confirm the
company internal Intranet system is the primary KM tool while Video Conferencing,
Data Warehousing, Decision Support tools and CRM systems showed weak usage.
Additionally, the remaining tools failed to demonstrate any notable usage or
significance.

Overall, these findings confirm and are consistent with a previous Hong Kong KM
study (Gloet, 2002) showing technology as the preferred method to disseminate
knowledge. Conversely, the Yao et al. (2007) study showed respondents used
personal approaches to share information. By comparison, Australian studies by
Gloet (2002) and Fong and Cao (2004) reported the most prevalent activities were
tacit experiences involving informal personal networks and face-to-face encounters to
share knowledge. Further studies in other geographical areas of the world such as
India, Australia, UK and a broad cross-section of Western executives showed
respondents preferring to disseminate knowledge using technology over the
personalized approaches (Alavi and Leidner, 1999; Singh et al., 2006; Xu, 2005).

Sharing Obstacles and Barriers

A clearer understanding of the potential barriers to a knowledge sharing culture helps
companies devise effective strategies to address them and create a successful KMS
to potentially improve performance.

The knowledge sharing barrier results were examined to determine the reasons to
resist sharing. Of the survey options, results showed the key reasons to resist sharing
are: people are unwilling to share, fear of losing power advantages and appearance
of being dependent on others to perform their job. In some national cultures with high
power distance dimensions (Hofstede and Hofstede, 2005) withholding knowledge
creates individual advantages and therefore could be a barrier to knowledge sharing,
how knowledge flows, accessibility and become an obstacle to certain strategies
(Ford and Chan, 2003). The Hong Kong is considered a high power distance Asian
culture which could preclude participation in knowledge sharing activities (Hofstede
and Hofstede, 2005)

In terms of an unwillingness to share, these findings also support previous research

(Ritter and Choi, 2000; Chee, 2003) citing the most frequent sharing obstacles in
Hong Kong companies were lack of motivation, passive attitude, not open to speaking
candidly and not critical of others. However, other Hong Kong studies (Fong and Cao,
2004; Gloet, 2002) revealed the most prominent obstacle was a lack of time.

The fear of losing power surfaced in this study as a primary respondent concern. This
result is in line with the Yao et al. (2007) Hong Kong project findings that the majority
(79%) of respondents perceived knowledge as power and unwilling to share.
Additionally, a large number (50%) of respondents agreed that the fear of loss and
absence of benefits were constraints to sharing. This result is not surprising given
that Hong Kong is a high power distance culture (Hofstede and Hofstede, 2005)
therefore withholding knowledge is a common characteristic to create individual
advantages. By comparison, the Indian study (Singh et al., 2006) also showed similar
concerns with the top obstacle being fear of losing power and jeopardizing job
security.
Incentives and Knowledge Sharing
The data for knowledge sharing incentives were analysed to determine whether
offering incentives could effectively encourage knowledge sharing. The key incentives
were: monetary, promotion, official recognition by management and peer
appreciation. The literature review showed that respondents to other KM studies felt
that either incentives to share were non-existent or unclear (Fong and Cao, 2004) or
simply not encouraged.

Testing was conducted on the KM incentives and resistance to sharing to determine if

a correlation exists between the offering incentives and resistance to sharing. The
results clearly show that incentives do not encourage knowledge sharing within
organizations surveyed. Once again this finding aligns with the Hong Kong high
power distance culture (Hofstede and Hofstede, 2005) meaning that respondents will
abstain from sharing information and knowledge rather than risk losing their individual
power advantages. Therefore, this factor could become an obstacle thereby
superseding or nullifying any incentives offered (Ford and Chan, 2003).

6.3 Strategies Used to Manage Knowledge

Research question three concentrates on the investigation of how Hong Kong
companies currently manage knowledge.

The KM literature indicates the management of knowledge depends on

management’s perception of this resource. For example, a department such as HR or
IT is typically assigned to oversee identifying, storing and making information
accessible to staff. Sometimes the responsibility can be shifted to department
Supervisors or Managers or even placed at the Senior or Executive level to manage.
However, companies that understand the strategic significance of managing
knowledge will generally create a position called the Chief Knowledge Officer (CKO)
who is responsible for overseeing KM programs to ensure that knowledge is
effectively managed and distributed companywide (Leitch and Rosen, 2003).

Recognizing that how knowledge is managed can vary from firm to firm, a null
hypothesis was created to test the company’s preferred choice: ‘no preference to a
specific department or individual to manage organizational knowledge’. Extensive
testing returned noteworthy results. According to the test findings, it appears
respondent companies view KM as strategically important to organizational
performance. To ensure that knowledge is responsibility and effectively managed a
significant percentage of respondent companies have a dedicated individual or
department responsible for managing this valuable resource.

Also, the results seem to indicate that respondent firms do not favor a particular
department or individual to manage KM processes. The findings are relatively equal
with a CKO or dedicated KM department (77.2%) followed in rank order by the IT
department (74.1%), with Middle Management and Executive Management showing
same result (70.8%), and the HR department received the lowest proportion results
(62.2%). These closely paralleled results seem to indicate that respondent firms
make a selection based on a particular knowledge focus or some factor exclusive to
the organization rather than by individual or department.

These results tend to disagree with previous Hong Kong studies of firms with
identified KM practices. In one study IT was the most popular way to manage
knowledge with HR ranked second and some respondents feeling it was shared by
both (Gloet, 2002). The second study showed that all companies with a confirmed KM
system did not have a specific individual or group dedicated to ongoing management
(Fong and Cao, 2004).

6.4 KM’s Strategic Importance

The goal of research question four is to measure if managing knowledge has
created value and tangible organizational benefits. Trying to accurately measure the
value of knowledge assets and substantiate the strategic importance of KM
practices has been a continual challenge for researchers (Ruggles, 1998). Although
practitioners and researchers agree that KM improves organizational performance
and is strategically significant, no empirically proven framework or study has
substantiated a causal relationship between KM practices and organizational
performance (Hoffman et al., 2005; Davenport, 1999). A variety of research studies
and surveys have produced a broad range of non-quantifiable results (Davenport,
1999; Wiig, 1999; Singh et al., 2006; Fong and Cao, 2004) but essentially it seems
to be management’s perception of KM’s value to performance without hard
supporting quantitative evidence (Ruggles, 1998; Ritter and Choi, 2000).

Due to the absence of an accepted model that can conclusively measure the casual
relationship between KM practices and firm performance --- this research study
employed a similar approach used by Fong and Cao (2004) in an effort to determine
the respondent’s perception or belief as to whether managing knowledge actually
produces benefits and contributes to organizational performance.
These study findings illustrate that respondents are relatively divided whether
having ‘A formal written KM practices policy’ have resulted in strategic benefits to
the organization. Testing failed to show any significant correlation between this
variable and any strategic benefits leading to improved organizational performance.

Testing of the sister variable ‘An internal knowledge culture or system that promotes
the acquiring, sharing and distribution of knowledge’ manifested similar results.
However, respondents felt that this variable did result in establishing a sustainable
competitive advantage due to development of differentiation and unique
competencies not easily imitated by competitors.

Based on these two findings, it could be assumed that companies with a ‘formal KM
policy’ neglect to provide the necessary support to encourage staff participation.
Conversely, companies with an embedded ‘KM internal culture’ and proactively
managed systems seem to more effectively encourage staff to participate in
knowledge sharing activities thereby translating into strategically significance
returns.

To further examine this concluding assumption, the two variable outcomes were
comparatively tested. The results suggested that organizations could conceivably
achieve desired ‘strategic benefits’ not by creating explicit written organizational
policies, documentation and rules, but by establishing an internal culture that
encourages and drives KM initiatives with the full support of all stakeholders who
endorse and voluntarily and proactively participate in knowledge sharing activities.

Comparatively, the Fong and Cao (2004) report showed the respondents ‘believed’
that their KM practices had positively impacted: efficiencies, customer relationships,
sharing of knowledge, but ‘sensed’ it did not reduce costs, promote innovations nor
increase market share. Upon comparing KM objectives with results, a constructive
relationship existed between effectiveness and significance. The top reason to
implement a KMS was improving customer relationships and KM provided successful
results. However, increasing market share was ranked second and contrary to
expectations KM did not deliver, at least not during the study period. Respondents to
the Indian survey (Singh et al., 2006) provided broader results with participants
indicating that KM provided a multitude of positive benefits to the company.

7.0 Research Findings Implications

The project results add to existing KM research benefiting both the business and
academic communities. The research identified differences and gaps in current Hong
Kong KM practices; recognized key areas of improvement; further stimulated the use
of KM; provided a better understanding of the internal mechanisms necessary to
leverage internal resources to develop and implement a KM culture. Findings show
local Hong Kong business organizations the potential of knowledge in enhancing their
competitive advantages, reduces ambiguity concerning KM benefits and highlights its
importance to organizational performance.

The research contributes to both academic researchers and business practitioners in

three ways. Firstly, it provides a better understanding of KM issues within Hong Kong
organizations, the current status of KM’s implementation and readiness to accept and
adopt best KM practices. Secondly, the findings also offer business practitioners with
a better understanding of the internal mechanisms necessary to leverage a firm’s
specific resources in the formulation and implementation of an effective KM system.
Finally, while much literature exists concerning KM and its causal link to company
performance, few organizations have established a relationship (Davenport, 1999).
While there is no argument against the value of managing knowledge, ascertaining
the degree to which it contributes to performance has not been substantiated (Collis
and Montgomery, 1995; Grant and Gregory, 1997). The results of question four shed
additional clarity on the fuzziness surrounding KM’s correlation to being strategically
significant to the firm.

8.0 Research Limitations

The findings of this research project has provided interesting insights into existing KM
awareness, approaches and practices within Hong Kong business organizations as
opposed to definitive results. While the research findings and propositions of the
study provide updated KM perspectives, it should be viewed with vigilance as to
potential limitations. For example, some of the questions may be answered
subjectively as to respondent’s interpretation of the situation thereby resulting in
skewed results. The sample used to extract the data could be more extensive to
produce more accurate results. Additionally, the findings are relative to any limitations
related to timing, the questionnaire structure, respondent comprehension of
questions, delivery method and not possible to identify, nor control factors that might
skew the results.

Overall, it is anticipated the study results will support previous research while
contributing to current theories, its linkage to organizational performance and
encourage further business practitioner and academic research studies.
9.0 Conclusions
These research findings and the empirical KM studies evaluated by the author’s 20
years of business consulting experience working in Europe, Australia, North America
and Asia with a variety of global organizations, seem to suggest that how knowledge
is managed, practices used, sharing barriers, incentive programs and KM’s strategic
significance to organizational performance will differentiate from firm to firm.

Even with massive investments in IT, a fuzziness still exists as to exactly what works
and why (Liebeskind, 1996). However, the differences may be predicated on a
variety of factors rather than just one. As demonstrated by the antecedent and
extant literature review and this research findings, the variables of organizational and
managerial and national culture, internal politics, ambiguity, time, the type of industry,
as well as the specific product / service individually or in combination may all serve to
influence and ultimately determine how different organizations perceive the value of
knowledge, how its acquired, methods to share and obstacles to sharing, and
strategic significance to the organization. Therefore, it is suggested that management
first conduct an in depth internal assessment to intimately understand the
organization’s idiosyncrasies. Next, to minimize the risk of a failure, companies should
design a systematic approach to developing a knowledge management program by
first performing a knowledge audit to identify, qualify, measure and assess both
explicit and tacit knowledge inventories (Guptara, 2000; Hylton, 2002). Then equipped
with this foundation information, the company can design and implement a KM
system that does more than just collect knowledge, but also effectively disseminates it
throughout the organization using a variety of techniques corroborated by various
current research studies outlined in this paper (Fong and Cao, 2006; Yao et al., 2007;
Xu, 2005; Alavi and Leidner, 1999; Singh et al., 2006; Ritter and Choi, 2000; Chee,
2003).

In terms of KM’s effectiveness, it is a common practice for companies to measure

KM’s value using financial analyses such as share prices, revenue growth, return on
sales and other financial measures (Sveiby, 1997). However, given that the external
global business environment is highly dynamic and constantly changing, it is
suggested that firms regularly evaluate the correlation between KM actions and
results to improve the outcomes rather than feeling the necessity to declare the
existence of an absolute casual relationship between KM and organizational
performance (Fong and Cao, 2004).
KM’s future is vague, but its potential for greatness is clear. While KM’s current
impact on the global economy remains a bit obscure and insignificant, there are
enormous possibilities for anyone that recognizes the value of knowledge, then
leverages to enhance organizations, individual competence and enrich the value
created by both.

10.0 Recommendations
The research study is not intended to provide absolute recommendations to
formulate, implement or manage a KM system. However, a few suggestions are
offered based on the research.

First, the primary challenge to a establishing an effective KM program originates with

the employees’ fuzziness of KM and its potential personal and organizational benefits.
The results showed the majority of respondents stated a formal KM practices policy
existed, while a reduced number did not and even less, did not know. Organizations
can avoid this obstacle by creating a definitive KM program, appoint a KM champion
to manage KM, train all staff levels, challenge processes and programs, then
reconstruct the basic elements of their KM scheme. Rather than fighting against this
obvious KM barrier, companies should view it as organizational learning opportunities
to implement effective change to improve operational performance.

Next, the findings also suggest that people are highly dependent on the personal
network of contacts and interactions to acquire useful information and knowledge as
opposed to IT. Companies should consider encouraging the existence of informal
social networks such as communities of practice (CoPs) and storytelling to enhance
knowledge sharing. These techniques have shown to deliver higher returns
compared to the more structured organizational processes and programs commonly
used by organizations. The informal networking and socializing provides individuals
with an identity, increased confidence and develops a degree of trust among
colleagues facing the similar or the same challenges and also externalizes tacit
knowledge by internal sharing.

Finally, the results clearly indicated that incentives did not encourage knowledge
sharing. Rather than offering non-attractive, meaningless incentives, companies
should invest time and effort in explaining the potential personal and organizational
benefits of sharing tacit knowledge to motivate staff support and involvement then
offer appropriate rewards aligned with staff values.
In summary, once management recognizes the value and opportunities associated
with effectively managing knowledge, developing effective KM practices and
processes will emerge, which will eventually produce amazing benefits staff,
leadership and the overall organization.

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