Aude sapere - knowledge management and its implications for strategic management in organisations : an analysis of small and medium enterprises in New Zealand and the United Kingdom based on an original knowledge management model

Abstract

This study set out to provide important empirical evidence on the role of knowledge management (KM) within Small and Medium Enterprises (SMEs) in New Zealand and the United Kingdom and to explore how such companies handle their planning and strategic choices. In today’s knowledge economies the management of knowledge has become vital. In the context of SMEs, this is even more critical because they often operate under difficult conditions and are subject to global pressures from large corporations and demanding customers. In spite of the significance of SMEs as essential for any nation’s growth and success, and even though many scholars and business managers claim that knowledge management is highly relevant for SMEs, there has been little research about this concept in SMEs, in general, and in New Zealand, in particular. The few studies in the literature conclude that this concept is mostly neglected by SMEs even though it is vital and has high potential benefits for them.

A quantitative research method approach was adopted. Self-completion questionnaires were sent to the senior management of firms with 100 employees or less, from a cross-section of industries. As part of this process an original knowledge management model was developed. The basic research questions were deduced from this model and the items in the questionnaire were created to answer these research questions.

In New Zealand, a total of 417 SMEs were contacted by mail and 180 useable questionnaires were returned. In the United Kingdom, 1268 SMEs were contacted and 241 useable responses were received. The response rates of 43.2% in New Zealand, of 19% for the United Kingdom and of 25% in total, are satisfactory. Therefore, the basis of this study was a large (421 responses) and high quality transnational sample, which allowed for sound quantitative analyses. The claim by previous researchers that knowledge management in the SME sector is not yet fully developed appears to be supported by the results of this research. The large majority of respondents regard themselves as not familiar enough with the concept of knowledge management to actually benefit from it in practice. Even though the respondents in both countries seem to appreciate knowledge management as a relevant and useful concept with potential, many do not seem to be sufficiently informed about this concept. Few have a knowledge management initiative in place or are planning or in the process of setting up one. The responses, which vary little between the two sub-samples, point to a short-term rather than a long-term management perspective being dominant. Major barriers in terms of the deliberate creation and sharing of knowledge are a lack of time and higher importance given to daily operational activities. The respondents - predominantly senior managers - indicate that they primarily consider themselves to be responsible for ensuring that knowledge is captured and shared and relatively little responsibility is given to other employees or specialists. SMEs do apply several aspects of knowledge management, however, this is generally informal and with an operational rather than a strategic focus. From the responses it is apparent that knowledge is shared internally mostly via people-based mechanisms. More advanced measures such as the systematic collection, organisation and storage of knowledge are less common. The results indicate a number of differences between the respondents. In this regard it is most evident that the more familiar respondents are with the concept of knowledge management the more proactive they are in terms of managing knowledge on an operational and strategic level.

This transnational research strongly links knowledge management to strategy and it clarifies how this concept can impact the formulation of strategy and the strategic competence of SMEs. Therefore, the results add new knowledge to the areas of SME research and strategic knowledge management.