Case Study: Impact of Knowledge Management on Organizational Performance

IntroductionIn this rapidly changing business environment, intellectual capital has become a key asset of the enterprise. The ability of companies to exploit their intangible assets has become far more decisive than their ability to invest and manage their physical assets. By managing its knowledge assets, an enterprise can improve its competitiveness and adaptability and can increase its chances of success. Organizations are discovering that they need to do a better job of capturing, distributing, sharing, preserving, securing and valuing this precious knowledge in order to stay ahead of their competition. Changing business environment has created need for the effective and efficient knowledge management. India cannot lag behind in this knowledge revolution hence many Indian companies have started their knowledge management programs.Therefore, the key objective of management is to improve the processes of acquisition, integration and usage of knowledge which is exactly what knowledge management (KM) is all about. KM is a process that through creating, accumulating, organizing and utilizing knowledge helps achieve objectives and enhance organizational performance. KM also consists of strategy, cultural values and workflow. In order to maximize its value, a change in strategies, processes, organizational structures and technologies needs to be made.In other words, Knowledge management is a process that transforms individual knowledge into organizational knowledge. It refers to a multi disciplined approach to achieving organizational objectives by making the best use of knowledge. The overall objective of KM is to create value and to leverage, improve and knowledge assets to meet organizational goals and targets. All the studies are done in different industries but there are no comparative studies available in literature which talks about KM in different industries in one country. Researchers often imply this positive effect of knowledge management on organizational performance.Review of LiteratureThere has been some recommendable research work done in the subject matter. The research conducted in Croatia suggests that KM positively affects organizational outcomes of company innovation, product improvement and employee improvement. Results collected in logistics operations context prove the existence of a strong positive relationship between a KM process and operational and organizational performance. Still, it is not well understood how different KM strategies affect organizational performance. Combining the tacit internal oriented and explicit external oriented KM strategies indicates a complementary relationship which implies synergistic effects of KM strategies on performance.KM fully mediates the impact of organizational culture on organizational effectiveness and partially mediates the impact of organizational structure and strategy on organizational effectiveness. Globalization, transformation of the enterprise, emergence of digital firm and transformation of industrial economies are four powerful worldwide changes which have altered the business environment.10 Business view is shifting from a productcentric to a knowledge centric view. Companies cannot afford to under invest in using, reusing and losing knowledge that they already have. In this rapidly changing business environment, intellectual capital has become a key asset of the enterprise. The ability of companies to exploit their intangible assets has become far more decisive than their ability to invest and manage their physical assets.By managing its knowledge assets, an enterprise can improve its competitiveness and adaptability and increase its chances of success. Organizations are discovering that they need to do a better job of capturing, distributing, sharing, preserving, securing and valuing this precious knowledge in order to stay ahead of their competition.Ghosh and Scott11 had compared knowledge management in health care and technical support organizations.