CHAPTER ONE
INTRODUCTION
1.1.
Background
of the study
The desire of every management of most
organizations is to maximize profits and shareholders’ wealth. Sound knowledge
management and strategic plans to have an edge over competitors in the industry
is a demonstration of such desires. The future of strategic management largely
lies on how best an organization can create and management knowledge and
information (Drucker, 1993). In particular, from a strategic standpoint, and
especially from the directive management perspective, it is collective tacit
knowledge (Nonaka and Takeuchi, 1995) which contributes the greatest value to
the organisation, given its inimitable, nontransferable and immutable
character. This tacit knowledge, derived from learning and communications, can
be transformed into explicit knowledge. This reference to directive management
compels us to define more explicitly the essence of this function.
In
ensuring organizational competitiveness which in turn leads to profitability,
knowledge management has to be given due priority. Healthy competition is an
essential competitiveness for growth and development of any firm or
organization. Knowledge management is simply the process of capturing,
developing, sharing, and effectively using organizational knowledge. It refers to a
multi-disciplinary approach to achieving organizational objectives by making
the best use of knowledge (Wikipedia)
Knowledge
management efforts have a long history, to include on-the-job discussions,
formal apprenticeship, discussion forums, corporate libraries,
professional training and mentoring programs. With increased use of
computers in the second half of the 20th century,
specific adaptations of technologies such as knowledge
bases, expert systems, knowledge repositories, group decision
support systems, intranets, and computer-supported cooperative
work have been introduced to further enhance such efforts.
In
1999, the term personal knowledge management was introduced; it
refers to the management of knowledge at the individual level for the
profitability of a firm or organization. In the enterprise, early collections
of case studies recognized the importance of knowledge management dimensions of
strategy, process, and measurement. The operational origin of knowledge management originated
from the consulting community and from there the principles of knowledge
management were rather rapidly spread by the consulting organizations to other
disciplines.
Perhaps the most central thrust in
knowledge management is to capture and make available, so it can be used by
others in the organization, the information and knowledge that is in people’s
heads as it were, and that has never been explicitly set down.
Many say that organizational
management has little or nothing to do with the organizations favorably
competing with their contemporaries. But whichever way we look at it, knowledge
management should be essential in the realization of profitability in the
Nigerian market.
Competences
development is an essential element for organizational performance, in which
organization members’ knowledge plays a direct and central role in acquisition
and organizational competence development (Andreadis, 2009). The global
business environments today are imposing new competitive pressures on
companies, which in turn creates the necessity for competences and
competitiveness. Different studies have indicated that companies that correctly
leverage knowledge to extend competences tend to increase efficiencies in
operations and process innovation, while also improving service to clients to
satisfy demands that arise in the market (Desouza&Awazu, 2006;
Thanurjan&Seneviratne, 2009), such that the extended organizational
competence depends on the management capability of companies and the
implementation of appropriate business strategies (Bismuth &Tojo, 2008; De
Long & Fahey, 2000; Roth, 2003).
Although
many approaches exist through which businesses can develop competences (through
manufacturing, employees, technologies, clients, resources and processes), the
challenges imposed by changes in the business environment require continuous
development of organizational competences (Ingelgard, Roth, Shani, &Styhre,
2002; Kululanga, 2009), since competences constitute one of the pillars that
enable companies to be competitive (Escobar, 2005; Murray &Donegan, 2003),
and it is crucial for competitiveness and organizational growth and development
(Bismuth &Tojo, 2008; Dutta, 2007). Also, knowledge management theory has
indicated that knowledge transforms and moves within an organization and from
an actionable knowledge value-added activities for the organization takes place
(Ingelgard et al., 2002).
1.2. Statement of the general problem
Adequate
knowledge management is companies and organizations has been neglected
especially in Nigeria where knowledge generally is not placed at the front
burner of the society, this has led to the lack of consistent progress in terms
of profitability in Nigeria. This has regrettably spilled over to the economy
which today has been a far cry from what it used to be in the 70’s and early
80’s.
Investing in Knowledge is an expensive
venture most serious minded and business oriented organizations must invest in,
if they are to strategically align themselves above competitors with substitute
products/services (Winter, 2002). Creating, Designing, implementing and
managing a robust knowledge system effectively in an organization is where most
managers find it difficult.
The aim of every KM system is to share
knowledge in the organization in the most effective manner and improving
performance in the process. This aim is usually not achieved because of poor
communication structures that exist in most public or government owned
organizations in Nigeria (Orji, 2008). KM goes beyond mere training and
retraining of staff to review of lessons learnt from each training. Every
member of the organization contributes to the organization by sharing knowledge
on a subject matter for strategic positioning of the organization. When there
is a cut in the communication flow, knowledge is not effectively shared.
According to Orji (2008), an internship student can contribute immensely to an
organization by sharing his/her experiences in his/her previous job that could
strategically align the organization in a vintage position.
1.3. Aims and objectives of the study
The
following are the reasons for undertaking this study
Ø To
know if organizations in Nigeria prioritize knowledge management.
Ø To
know if there is a relationship between knowledge. management and profitability
of organizations.
Ø To
proffer solutions on ways of improving knowledge management in Nigeria.
Ø To
advice captains or industries and organizations in Nigeria on the benefits of
effectively practicing knowledge management.
1.4.
Research
questions
1. Do
organizations practice effective knowledge management?
2. Is
there a relationship between knowledge management and the performance of
organizations?
3. How
can knowledge management be adequately tapped to ensure economic development in
Nigeria.
4. Are
there challenges to adequate knowledge management in organizations in Nigeria?
5. Can
knowledge management be improved upon for profitability?
1.5. Research hypotheses
H0:
knowledge management does not significantly influence organizational
competiveness or profitability
H1:
knowledge management significantly influence organizational competiveness or
profitability
H0:
there is a negative relationship between knowledge management and
organizational competitiveness
H1:
there is a positive relationship between knowledge management and
organizational competitiveness
1.6. Significance of the study
This
study seeks to examine the extent to which knowledge management influences
organizational competitiveness and by extension the economy. Another
significance of this study is to educate owners and directors of organizations
on the benefits of adequate knowledge management on market competitiveness.
1.7. Scope of the study
This
study is restricted to the impact of knowledge management on organizational
competitiveness, a case study of Philips consulting limited.
1.8.
Limitations
of the study
Financial constraint- Insufficient fund tends to impede the efficiency of the
researcher in sourcing for the relevant materials, literature or information
and in the process of data collection (internet, questionnaire and interview).
Time
constraint- The
researcher will simultaneously engage in this study with other academic work.
This consequently will cut down on the time devoted for the research work.