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The Effects of Knowledge Sharing and Absorptive Capacity on the Organizational Performance

Essay 2016 10 Pages

Business economics - Operations Research

Excerpt

Effects of Knowledge sharing & Absorptive Capacity on the organizational performance

Author: Saeed Allam Mousa

Institution: Palestinian Technical University-Kadoorie

Abstract

Innovation does not occur on its own accord rather, it must be triggered by varying factors. There is the need for the company or business entity to find, as well as foster talent. Additionally, non-technical innovation may be driven by managers, who mainly take the role of mentorship in the organization. This creates a relationship that act as a driver to innovation in both the long-term and short-term. Talented managers have proper comprehension of the importance of relationships, wherein an emotional commitment of an individual to another has the capacity to make a difference.

The quality of relationship between managers and employees would have a bearing on the capacity to leverage the relationship. Employees or knowledge workers are the major sources of knowledge and are crucial to the creation, capture, as well as sharing of knowledge in business entities.

There are two types of knowledge, tacit and explicit. Explicit knowledge is expressed in numbers and words and can be easily shared and communicated in form of scientific formulae, hard data, universal principles and codified procedures. Tacit knowledge, on the other hand, revolves around personal and hard to formalize knowledge, which makes it extremely difficult to share or communicate with other people.

It is also to be recognized that knowledge sharing is very crucial for knowledge management systems. It can be achieved through contributions, interactions, informal techniques and communal approach.

There are questions about the elements that determine the absorptive capacity of a business entity. There are three groups of factors that are assumed to determine or have a bearing on the absorptive capacity. The first group, there are the research and development activities, second category are the prior related knowledge and the individual skills, and the third are the human resource management practices and the organizational structures.

A business entity’s knowledge base also comes as a basis for the performance of the company. This means that there exists a strong relationship between the skills associated with knowledge and the performance of the corporate entity.

There is a relationship between absorptive capacity and knowledge sharing. Knowledge sharing in business entities is a critical process that requires to be attained and developed at all times so as to attain sustainable advantage.

Individuals must have a particular degree of absorptive capacity so as to have the desire to share the same knowledge. This means that absorptive capacity is essentially a function of the prior relevant knowledge and the intensity of an individual effort in enhancing the same.

Keywords: Knowledge sharing, Absorptive Capacity, Knowledge management system, Business entity's knowledge.

Effects of Knowledge sharing & Absorptive Capacity on the organizational performance

Of particular note is the fact that innovation does not occur on its own accord rather it must be triggered by varied factors (Zahra & George, 2002). Of course, the factors are different for every sector, subject to the king of industry, the players and products or services that are offered in the same. Nevertheless, there are varied shared drivers of non-technical innovation within the service industry, cutting across all or a large number of business entities. There is the need for the company or business entity to find, as well as foster talent. Scholars acknowledge that there are four individuals that could drive innovation including extreme individual achievers, inventors, super mentors and entrepreneurs (Zahra & George, 2002). In instances where these people settle, there is likely to be economic empires built. This underlines the need for the company to adopt selection practices that allow for the recruitment of the best talents in the field (Hanvanich et al, 2006). Once the best talent has been attracted to the business entity, it is imperative that the business entity creates an environment in which the employees are engaged so as to generate a higher yield of productivity.

On the same note, non-technical innovation may be driven by managers. These fall in the category of super-mentors, who inspire the protégés and assist them in connecting with the people that can act on the idea so as to produce better performance for the business entity (Hanvanich et al, 2006).

Further, relationships act as a driver to innovation in both the long-term and short-term. Scholars acknowledge that talented managers usually have proper comprehension of the importance of relationships, wherein an emotional commitment of an individual to another has the capacity to make a different. However, the control of a manager to limit and enhance the contribution of an employee to innovation comes as a powerful factor. This underlines the importance of cultivating relationships between managers, as well as between managers and employees, and employee to employee. It is well acknowledged that the quality of relationship between managers and employees would have a bearing on the capacity to leverage the relationship (Calantone et al, 2002). Other relationships that would be crucial to innovation are between the company and the customers. Indeed, the development of the most creative ideas and enactment of the same necessitates that the company comprehends the customer’s needs, which necessitates the incorporation of a good relationship.

These drivers are categorized in two including absorptive capacity and knowledge sharing. Absorptive capacity underlines the capacity of a firm to recognize the value of new information, assimilate it, as well as apply it in meeting its commercial ends. This may further be divided into potential absorptive capacity and realized absorptive capacity (Calantone et al, 2002). Potential absorptive capacity incorporates two elements including knowledge acquisition, which underlines the capacity of a firm to identify and acquire the knowledge that is generated externally that is critical to its operations (Edquist et al, 2001). There is also the assimilation capacity, which underlines the processes and routine of a firm that enable the analysis, processing, interpretation and comprehension of information that is derived from external sources. Realized absorptive capacity is composed transformation capability and exploitation capability, where the former underlines the capacity of the firm to develop and refine routines that enhance the combination of existing knowledge, as well as the newly assimilated and acquired knowledge, while the latter is the ability of a firm to apply newly acquired knowledge in the services and products from which it can derive financial benefit (Hall & Bagchi-Sen, 2007). Of particular note is the fact that realized absorptive capacity is subject to transformation and exploitation capabilities.

In the era of knowledge economy, knowledge-based tasks have taken the place of sequential and regular work given its major characteristics such as high uncertainty, complexity and flexibility. In this regard, the capacity of an organization to implement knowledge-based activities in an effective manner is increasingly important for the sustenance and development of competitive advantage (Chen et al, 2004). Of particular note is the fact that there are varied knowledge based activities including the development and integration of knowledge, accumulation and use of knowledge, as well as the learning and sharing of the same, which, together make up knowledge management. While all these are crucial to the organization, the concept of knowledge sharing has been termed as knowledge management’s cornerstone.

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Details

Pages
10
Year
2016
ISBN (eBook)
9783668269170
ISBN (Book)
9783668269187
File size
413 KB
Language
English
Catalog Number
v337339
Grade
Tags
effects knowledge sharing absorptive capacity organizational performance

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Title: The Effects of Knowledge Sharing and Absorptive Capacity on the Organizational Performance