How to support knowledge management diffusion in SMEs

nigerianfortyfortManagement

Nov 6, 2013 (3 years and 11 months ago)

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How to support k
nowledge management

diffusion

in SMEs





Sergio Cotecchia

Depart
ment of Industrial Engineering,
Uni
versity of Naples Federico II



Emilio Esposito

Depart
ment of Industrial Engineering,
Uni
versity of Naples Federico II



Pietro Evangelista
a

IRAT
-
CNR and Department of Industrial Engineering, U
niversity of Naples Federico II



Mario Raffa

Department of Industrial Engineering, University of Naples Federico II



Maria Rosaria Spadaro

Department of Industrial Engineering, Un
iversity of Naples Fe
derico II





Keywords:

Knowledge management practices, Small and medium sized enterprises, High
technology sectors, Literature review, Empirical survey




Conference track
: 1. Sustainable Innovation Ecosystems for Innovative entrepreneurship












a

Corresponding author:
Pietro Evangelista, IRAT
-
CNR and Department of Industrial Engineering, Section of
Management Engineering, University of Naples Federico II, P.le Tecchio 80, 80125 Naples (Italy), Tel. +39 081
7682960; Fax +39 081 7682154; p.evangelista@unina.it


How t
o support knowledge management diffusion in SMEs


Abstract

Knowledge Management (KM) is considered an important ingredient of innovative efforts of
modern companies. Nevertheless, the benefits of KM have not been fully exploited by small
and medium sized e
nterprises (SMEs). Moreover the analysis of the current literature shows
two gaps, which concern tools used in the KM process and the barriers that obstacle the
adoption of knowledge management systems (KMSs). The main aim of this paper is to
explore throu
gh a semi structured questionnaire practices of KM in a network of small firms
operating in high
-
tech and complex industries and located in the South of Italy. The results of
the questionnaire survey indicate that majority of the surveyed firms use
KMSs an
d tools
relatively simple producing benefits mainly in the area of operational management. The most
critical barrier concerns the protection of company’s information.


Keywords:
, Knowledge management practices, Small and medium sized enterprises, High
tec
hnology sectors, Literature review, Empirical survey


1. Introduction

In business practices as well as academia, there is a general consensus on the fact that small
firms fall behind large companies in developing KM practices and benefits of KM are not
ful
ly exploited by these firms. Indeed, to date, there is an abundance of studies describing
how large companies are successfully practising KM, but the reasons why small firms show
poor usage of KM tools are still unclear. This is reflected in a literature g
ap where little
research has been carried out on KM in
SMEs

and little empirical studies have been
conducted to identify factors influencing KM adoption (Durst, Edvardsson, 2012).

The main aim of this paper is to shed light on the KM practices in s
mall an
d medium sized
enterprises

and influencing factors
. The paper presents the results of a literature review on
KM in SMEs that allows to derive two research questions:
1) What KM practices are
currently used and the main tools adopted in SMEs? 2) What are th
e major benefits and
barriers that influence the use KMSs and tools in SMEs?

Such research questions have been

addressed through a questionnaire survey conducted in a network of small firms operating in
high
-
tech and complex industries and located in the S
outh of Italy.

The paper is organised into seven sections. Following this introduction, section 2 summarises
provides an overview the literature on KM concluding that there is a large number of research
contributions focused on large companies while the re
search efforts in the area of small firms
are quite limited. Section 3 describes the methodology used to carry out a systematic literature
review on KM in small firms and provides the main result achieved. Section 4 describes the
context of investigation,
while the survey methodology used is detailed in section 5. The main
findings emerging from the empirical survey are presented in section 6. Conclusions and
implications are outlined in section 7.


2. The framework

Most of the literature on KM focuses on l
arge companies. In fact, the application of KM
theory and practice in small business has been largely derived from large company. This is
reflected in a literature void where little research on this topic has been published. In addition,
research on KM in
SMEs highlights some relevant different features (Pillania, 2006 and
2008).

In KM practices, issues faced by small businesses cannot simply be a scaled
-
down replica of
large
-
company experiences (Sparrow, 2001). As asserted by Frey (2001), although major
co
rporations have led the way in introducing and implementing KM, it is increasingly
important for small businesses to manage their collective intellectual assets.

Desouza and Awazu (2006) discuss five key peculiarities that differentiate practices of
knowl
edge management in SMEs than large companies:

a)

Unlike large companies, SMEs lack of explicit knowledge repositories. Instead, each
manager/owner acts as the knowledge repository.


b)

common knowledge possessed by SME members is deep and broad. This kind of
know
ledge helps the organization of work by knowledge transfer, sense
-
making, and
application.

c)

by their nature SMEs are skilled at avoiding pitfalls of knowledge loss. The close social
ties between members of the SME act as a deterrence against employees leavi
ng the
business.

d)

SMEs have an ability to exploit foreign sources of knowledge. Since they are resource
constrained, they look outside the organisation for knowledge.

e)

SMEs knowingly or unknowingly, manage knowledge in the right way
-

the humanistic
way. T
echnology is never made part of the knowledge management equation.

According to the review carried out by Thorpe et al. (2005), research on KM in the SMEs
context may be broken down into three distinct fields: 1. the knowledgeable SME manager or
entreprene
ur; 2. the knowledge systems and routines embedded within the context of the firm
and their immediate networks; 3. the institutional and policy framework that support
knowledge production within SMEs.

Similarly, McAdam and Reid (2001) firstly describe the
key dimensions of KM (
knowledge
construction, knowledge embodiment, knowledge dissemination and knowledge use/benefit
)
and for each dimension conduct a comparison between large firms and SMEs.

Sparrow (2001) indicates four components that figure strongly
in small firm knowledge
projects: i) the appreciation of personal and shared understanding; ii) knowledge bases and
knowledge systems; iii) the integrated and contextualized action needed for knowledge
projects in SMEs, and iv) the knowledge and organizati
onal learning processes in SMEs.

Egbu et al. (2005) highlight that knowledge generated in SMEs is tacit in nature due to
various reasons. In the context of SMEs some elements of KM are practiced but in an ‘ad hoc’

fashion. Indeed, any technological infras
tructure that is put in place to support KM must be
adapted to the organisation’s needs and not the other way round.

Another stream of KM research concerns factors that may influence the success of KM
implementation. Also in this area most of research eff
orts are heavily focused on large
companies as early adopters and superior performers of KM were large and multinational
corporations.

As such, existing factors are mainly large companies oriented, thereby reflecting their
situations and needs. Directly a
pplying these factors into the SMEs environment may not be
sufficient without an understanding of their very own and specific conditions (Wong, 2005).
Wong (2005) and Wong and Aspinwall (2005), proposed a more comprehensive model for
implementing KM in SME
s based on the following 11 factors: management leadership and
support; culture; IT; strategy and purpose; measurement; organisational infrastructure;
processes and activities; motivational aids; resources; training and education; and human
resources manag
ement. The above literature review shows that the KM presents a number of
critical issues when implemented in SMEs context. In addition, KM practices and tools used
in SMEs are often borrowed from the context of large companies. Due to these reasons, the
n
umber of research contributions is quite limited and it is hard too find out research papers
dealing with the use of KM in small and medium sized firms. The following section presents
the preliminary results of a systematic literature review in this field.


3. Knowledge management in SMEs: a

literature review

The main objective of the literature review is to analyse the state
-
of
-
the
-
art of knowledge
management in small and medium sized firms from the management perspective in order to
identify research gaps
.


The review has been carried out using
Scopus

and
Web of Science Academic

databases which
ensure a comprehensive coverage of scientific output as they contain more than 8,000
scientific journals, including the most important high
-
ranking journals. Adapti
ng the approach
suggested by
Kolbe and Burnett (1991) and Li and Cavusgil (1995), the
systematic study of
existing body of knowledge on the above topic has been done through the three following
main phases: 1) sampling; 2) classification; and 3) analysis.

Sampling

This phase was aimed at identifying all relevant scientific output covering the topic
investigated from 2003 to 2013. A keyword search was conducted using several keywords
such as: “knowledge management”, “knowledge management practices”, “SMEs”,

“small
firms”, “small business”.
This allows to identify 257 documents from Scopus database and 73
documents from Web of Science Academic database. Considering that about the 90% of the
latter are included in the former, the starting database includes 264

documents.

The further step in this phase was to achieve a high level of rigorousness of scientific products
retrieved and control over quality of the search process. This was achieved by limiting the
search to peer
-
reviewed journals (including papers alr
eady presented in international
conference proceedings and published on peer
-
reviewed journals after the conference). As a
result, prefaces, editorial notes, reviews, and other editorial materials, in addition to any
articles from magazines or industry pub
lications, were excluded. The final sample obtained at
the end of this stage consists in 69 journal articles.

Classification

To classify the articles indentified in the previous phase the functionalities provided by the
Web of Science Academic database ha
ve been used. These allow to identify the distribution
of 69 articles retrieved by 19 subject areas of the database. The subject areas have been

grouped into the following four macro areas (see table 1): a) Engineering (6 article), b)
Information systems a
nd computer science (6 articles), c) Operations research and
management science (46 articles) and, d) Multidisciplinary (11).

The articles were obtained from the e
-
journal search engines available in the University of
Napoli Federico II electronic library
. These include access to journals published by several
publishers such as Elsevier, Taylor & Francis and others. Full bibliographic details of the 69
articles selected for the analysis are shown in the reference section in order to make our
research proce
sses transparent. The 69 articles were studied in detail and the results of the
analysis are described below.


Table 1
-

Sample articles by macro areas


Macro areas

Papers

%

Operations Research & Business Science

46

66,7%

Engineering

6

8,7%

Computer Sci
ence & Information Systems

6

8,7%

Multidisciplinary

11

15,9%

Total

69

100,0%



Analysis

The first step consists in a descriptive analysis of articles retrieved that covers the number of
articles sampled by year of publication. Data reported in figure 1
indicate a positive and
increasing trend towards this topic in the period from 2003 to 2011, then a slowdown in 2012.
The 2013 is not significant since data concern only the first 6 months of the year.










Figure 1
-

Sample articles by year of publicat
ion


0
2
4
6
8
10
12
14
16
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Numbers of articles


The distribution of articles by macro
-
topic areas reported in table 2 highlights that the
majority of articles concerns the factors affecting KM in SMEs (36%), processes, practices
and tool represent the 35% and the impact of knowledge on the firm
growth the 29%.


Table 2
-

Sample articles by macro
-
topic areas


Macro Topic Area

Papers

%

Factors affecting KM in SMEs

25

36,2%

KM and performance

20

29,0%

KM processes, practices and tools

24

34,8%

Total

69

100,0%


More in detail, Table 3 highlig
hts that the diffusion of knowledge management practices in
SMEs (8,7%) and the tools used (13%) have not been widely investigated. In addition, it is
unclear what are the main benefits and barriers to knowledge management systems adoption.

These gaps req
uire a deeper understanding of the existing level of
KMSs
adoption in SMEs as
well as the main benefits and barriers
. These arguments considered collective
ly

allow to
formulate the following two research questions:





RQ1: What KM practices are currently us
ed and the main tools adopted in SMEs?



RQ2: What are the major benefits and barriers that influence the use KM
Ss and

tools in
SMEs?

Table 3
-

Sample articles by topic



In order to provide answers to the above research questions a questionnaire survey
has been
carried out in a network of small firms (named Chain consortium) located in the South of
Italy. The following section provides an overview of the research context in which the
questionnaire survey has been conducted.


4. The context of investigat
ion

The Chain consortium is network comprising 35 firms and
established in October 2007.
The
consortium carries out
a number of
activities to support
the associated companies. I
n
particular
, it
provid
es
services
to develop
technologies and products, know
-
h
ow exchanges,
Macro Topic
Area
Topics
Survey
Case
study
Literatur
e review
Concep.
and
Theor.
paper
Other
Total
%
Factors affecting
KM in SMEs
Internal, external and
contextual factors
11
4
4
4
23
33,3%
Barriers to Km
1
1
2
2,9%
Organizational learning
and performance
2
2
1
5
7,2%
KM process to
organizational
performance
13
1
1
15
21,7%
KM process
3
2
2
1
1
9
13,0%
Km practices
2
2
1
1
6
8,7%
KM Tools
5
4
9
13,0%
Total
37
16
2
6
8
69
100,0%
KM processes,
practices and
tools
Methodological approach
KM and
performance

high education programs, services to improve the
penetration in foreign markets and
promote
the collaboration
among
the associated
firms.
The total employment is about 1,700

people and
the total turnover is around 270 million Euros in 2011. I
t
mainly
comprises SMEs as shown in
table 2. In the table, the latest EU definition of SMEs proposed by the EU Commission has
been used (European Commission, 2005).


Table 2
-

Chain consortium: companies breakdown by employees’ bands


Employees bands

N.

%

Micro 0
-
9

7

20

Small 10
-
49

20

57

Medium 50
-
249

8

23

Large ≥ 250

M

M

Total

35

100


Table 3 shows that the most part of
SMEs
belonging to the Chain consortium
operate in the

aerospace industry.

Table 3
-

Chain consortium: company sectors


Overall
economic
industry

Specific

industry

Number

of firms

Manuf
acturing

Aerospace

18

Engineering

5

Service

Aerospace (R&D)

1

ICT

5

Management training and consulting

1

Transport (system and services)

5


5. Survey methodology

In order to shed light on the most relevant features characterising the usage of KM
practices
by the small firms investigated
a questionnaire survey has been conducted in 201
2
. The
survey methodology has been organised into the following five steps:

a) Definition of basic survey objectives and preparation of the draft questionnaire
. In th
is
phase a draft version of the questionnaire has been prepared together with the basic survey
objectives.


b) Establishment of focus groups
. In order to test the suitability of the basic survey objectives
and comprehensibility

of the draft questionnaire,
a focus group involving experts with
different competence and professional background was established. The focus group has been
developed in three different phases. Firstly, the topic investigated has been presented in order
to make focus group participant
s familiar with it. Secondly, the draft questionnaire has been
submitted to the panellists in order to get their useful feedback and comments. Finally,
panellists’ remarks have been discussed in a plenary session.

c) Re
-
focussing of survey objectives and q
uestionnaire
. On the basis of feedback received
during the focus group discussion, survey objectives have been re
-
focussed and the
questionnaire has been revised and finalised.

d) Test of the questionnaire
. In this step, the final version of the questionna
ire has been tested
through 3 pilot interviews carried out in Chain consortium firms.

e) Survey implementation
. The total number of respondents was 22 out of 35 companies with
a response rate of 63%. The questionnaire has been submitted during face
-
to
-
face

interviews
involving at least two managers with different skills and role (e.g. a manager involved in the
strategic firm decisions making process and a manger involved in the operation management).
This allowed obtaining both strategic and operational per
spectives.

In order to have a more comprehensive picture of the Chain consortium, information from
complementary sources (e.g. company websites, company reports and industry magazines)
have been collected and analysed.


6. Main findings

This section descr
ibes the
preliminary
findings
emerging from
the questionnaire survey. The
following section
(6.1)
reports findings concerning KM
Ss and
tools implemented by the
firms

analysed
. Section 6.2 presents

the

findings related to the main benefits and barriers to
k
nowledge management
practices
adoption.


6.1
-

Knowledge management
systems
and tools adoption

Firstly, according to the definition of KMS provided by Alavi and Leidner (2001), the survey
results indicated that the vast majority of the surveyed firms use a

KMS. More specifically, 18
respondents have a KMS in place, while 4 firms do not use any systems to manage knowledge
flows (see figure 2). Amongst the adopters, 12 (67%) respondents use a KMS mainly to
support knowledge management inside the firm, while 6

firms (33%) use a KMS systems
supporting both internal and external management of knowledge flows.


Figure 2
-

KMS
and tool
adoption

















The figure 3 reports the tools for KMS implementation used by the surveyed companies. The
tools used by t
he most of the companies investigated are database, document management
system, e
-
mail and configuration management systems.

A second group of applications in terms of adoption comprises tools such as data mining, data
warehouse, social media, video confe
rence, content management system and podcasting.
Finally, a third group of tools with the lower level of adoption comprises yellow page,
KM
S and tools and
adoption

NO

4 (18%)

(1
8
%)

YES

1
8 (82
%)

Internal and
External

6

(
33
%)

Mainly Internal

1
2 (67
%)


learning management systems, peer
-
to
-
peer, wiki, cloud computing, crowd sourcing and tag
filtering.

Figure 3
-

Tools
for KMS implementation




6.2
-

Benefits and barriers to knowledge management systems usage

The benefits of a KMS have been analysed (see figure 4). In the figure the importance
attributed to each benefit is reported. The figure shows that the main benef
its associated with
the use of KMS are reflected by a better operational and quality management and support to
made knowledge more explicit. Surprisingly, the less important benefit indicated by the
surveyed firms relates to knowledge sharing with partner.



Figure 4
-

Benefits associated with the use

of KMS




However, a number of barriers to KMS implementation have been identified (see figure 5).
Interestingly, protection of critical information and integration with existing processes are
considered the
most relevant barriers. This suggests that small
firms

investigated seem
oriented to preserve their own intellectual assets from the possible opportunistic behaviour of

potential partners.
The less important barriers relate to technology and the lack of
ma
nagement support.


Figure 5
-

KMS implementation barriers




7. Conclusion
s and implications

There are evidences of an existing gap in literature concerning KM in
SMEs
. In addition,
there are also little empirical investigations exploring KM practices a
nd factors affecting their
usage. This paper attempted to fill these gaps presenting the preliminary results of a literature
search on this topic and describing the findings collected through a questionnaire survey in a
network of small firms.

The results

of the survey highlight that, although KMSs are used quite extensively in the
network analysed, the tools used for their implementation are simple and
un
-
updated
, while
more sophisticated technologies (such as
wiki, cloud computing, crowd sourcing and tag

filtering) that have the potential to support more effectively relationship
s with other business
partner

are used to a lower extent. This may be explained considering the most important
barriers indicated by the surveyed companies that relate to protectio
n of critical information
and process integration. It appears that the use of KMSs is mainly internal, while sharing
knowledge with other partner
company
(
e.g.

customer) has a less important priority. On the
other hand, this could be due to a misalignment
with the KMSs used by customer and other
participant. This issue should be the focus of future developments of this research.


Finally, the research described in this paper suffers of some limitation
s

concerning the small
size of the sample investigated th
at needs to be expanded in order to allow a better
understanding of KM practices and allows comparisons with small firms operating in
different sectors. The literature review carried out needs to be developed more in
-
depth to
identify other relevant gaps t
o be explored through further research efforts.


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