Impact of knowledge management processes on business performance: Evidence from Kuwait

• Date: 01 April 2018
• Published date: 01 April 2018
• Author: Nick Bontis,Vladimir Dzenopoljac,Halil Zaim,Rami Alasadi
• DOI: http://doi.org/10.1002/kpm.1562

RESEARCH ARTICLE

Impact of knowledge management processes on business

performance: Evidence from Kuwait

Vladimir Dzenopoljac

1

|Rami Alasadi

1

|Halil Zaim

1

|Nick Bontis

2

1

College of Business Administration, American

University of the Middle East, Kuwait

2

DeGroote School of Business, McMaster

University, Hamilton, Canada

Correspondence

Nick Bontis, DSB 207, 1280 Main Street West

DeGroote School of Business, McMaster

University Hamilton, Ontario, Canada L8S

4M4.

Email: nbontis@mcmaster.ca

The purpose of this research study is to investigate the relationship between knowledge manage-

ment (KM) processes and the level of business performance of organizations in Kuwait. The

research utilized a survey that was administered to 500 employees of 139 private and govern-

ment companies in Kuwait. Tests of validity and reliability confirmed the use of the survey instru-

ment whereas factor analysis revealed 4 main factors whose impact on performance was

assessed. The research results revealed that all 4 KM processes examined (i.e., knowledge gener-

ation and development, codification and storage, transfer and sharing, and use and evaluation)

have a positive and significant impact on perceived business performance. Additionally, the

research revealed that KM processes have the highest impact on innovation performance. The

limitation of this study is mainly related to the limited geographical scope of the research, because

the survey covered only companies from Kuwait. The originality of the research comes from geo-

graphical area covered. Virtually, no empirical research has been undertaken in area of knowledge

management in Kuwait, as an oil‐dependent country.

1|INTRODUCTION

In today's knowledge economy, competition is intensifying to the

point where the concept of sustainable competitive advantage may

be replaced with transient competitive advantage, which represents

a set of time‐bound competitive advantages. For today's companies

to stay ahead, they need to start new strategic initiatives on a contin-

uous basis, building and exploiting many transient competitive

advantages at once. These advantages are by their nature temporary,

but they can keep companies in the lead in the long run when they

are intelligently created as a portfolio (McGrath, 2013). The modern

competitive situation looks very much like the famous Red Queen's

race, where “it takes all the running one can do, to keep in the same

place. If they want to get somewhere else, they must run at least

twice as fast”(Carroll, 1871). In this sense, competitive advantage in

the contemporary business environment is reached by those compa-

nies that “run at least twice as fast”and, in doing so, manage their

resources and capabilities in a more efficient and more effective

way when compared with their competitors. These are the reasons

why the contemporary knowledge‐based economy supports a

completely different business model that relies mainly on wealth crea-

tion through development, deployment, and utilization of companies'

knowledge‐based assets. Hence, the main drivers of modern

companies' performance include knowledge, competence, intellectual

property, brands, reputation, and customer relationships (Dzenopoljac,

Janosevic, & Bontis, 2016).

Knowledge and information enable companies to create optimum

combinations of tangible and intangible resources that will lead to

desired financial and market results. However, it is evident that in

the information age, the success of companies depends more on avail-

able knowledge, as this is the key pillar of both tangible and intangible

resources (Bontis, 1999). Unlike tangible resources, the intangible ones

are a greater source of competitive advantage because they are more

difficult for competitors to acquire or imitate (Volberda et al., 2011).

For many organizations, achieving desirable business performance

not only depends on successfully deploying tangible assets but also

on managing knowledge effectively (Lee & Sukoco, 2007).

With the internet playing an important role in businesses and

other applications during the last two decades, the expression “knowl-

edge management”(KM) has generated a lot of interest in the corpo-

rate sector. KM is usually seen as a generic process through which

organizations generate value from knowledge (Goh, 2005). Explained

in the simplest way, KM aims to encourage people to share knowledge

and ideas in order to create value‐added products and services.

Although it is easy to comprehend the essence and importance of

KM, it is extremely challenging to change individual and organizational

behaviour so that an organization can be transformed into a knowl-

edge‐creating entity (Chase, 1997).

Received: 14 November 2017 Accepted: 7 February 2018

DOI: 10.1002/kpm.1562

Knowl Process Manag. 2018;25:77–87. Copyright © 2018 John Wiley & Sons, Ltd.wileyonlinelibrary.com/journal/kpm 77