Relationship between knowledge management and performance of commercial banks in Kenya
Kinyua, Godfrey Muigai
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The knowledge-based view has identified innovative knowledge as what companies require to dominate in an industry. Past studies have dealt with knowledge management too broadly without considering specific aspects of knowledge management which has led to a limited level of understanding on the extent to which the comprehensive nature of knowledge management has influenced firms' performance. Even though some companies have implemented knowledge management, there is no conclusive empirical evidence on the influence of knowledge management on performance. It has been noted that performance of Commercial Banks suffer because knowledge is hoarded in scattered silos, fragmented by division, department, region and a host of other organizational factors such as culture, processes and management style. It is against this background that this study sought to investigate the relationship between knowledge management and performance of Commercial Banks in Kenya. The specific objectives of the study sought to determine the relationship between knowledge conversion and performance; to establish the relationship between knowledge transfer and performance; to determine the relationship between knowledge application and performance; to establish the mediating effect of human capital repository on the relationship between knowledge management and performance; and to determine the. moderating effect of firm's culture on the relationship between knowledge management and performance of Commercial Banks in Kenya. To achieve these objectives, the study adopted explanatory and cross-sectional survey design. The target population of this study comprised of all the forty three Commercial Banks in Kenya. The unit of observation was the functional area in each bank, whereas the unit of analysis was Commercial Bank. Five functional areas were identified in each bank comprising human resource, finance, marketing, information communication technology, and operations. This study used primary and secondary data. Primary data was collected using a semistructured questionnaire. The questionnaire was administered using drop-and-pick later method. Secondary data was collected using document review and was used to validate information collected through the questionnaire. The response rate in this study was approximately seventy three percent which was considered sufficient for making inferences and drawing conclusions. Quantitative data was analysed using descriptive and inferential statistics. Descriptive statistics was used to summarise the survey data and included percentages, frequencies, means, and standard deviations. However, inferential statistics involved regression analysis and was used for testing hypotheses and drawing conclusion. Results from quantitative data analysis were presented using figures and tables. Qualitative data was analysed on the basis of common themes and presented in narrative form. The findings of the study established that knowledge management positively influence performance. Moreover, knowledge conversion, knowledge transfer and knowledge application were found to be statistically significant. Human capital repository was found to partially mediate the relationship between knowledge management and performance. Furthermore, the findings also revealed that firm's culture moderates the relationship between knowledge management and performance. Management of Commercial Banks can use these findings to enhance utilization of organization's knowledge base and firm's absorptive capacity. Moreover, management of other knowledge-intensive organizations can use these findings to formulate knowledge management policies and promote knowledge management practices.