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keny
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INTRODUCTION
Background to the Study
The development and practice of knowledge management is continuously and dramatically increasing in organizations. And due to improvements in Knowledge Management, the race for seeking a competitive edge through knowledge increases at an even faster rate (Hofer-Alfeis, 2003).
The modern business world is characterized by dynamic changing markets and continuous technological advances. To cope with these trends organizations must become more flexible, and one certain way to do this is to strengthen their potential to learn organizations. Thus knowledge becomes an important organization driver and a key in value creation.
Business community and many other types of organizations have been showing real interest and enthusiasm for knowledge management as revealed by the increasing number of publications, library repositories and information press. Many types of organisations have also developed an interest for Knowledge management. The development of brands, stakeholder relationships, reputation and the culture of the organization is readily viewed as providing sustainable sources of business advantage (Chong, Holden, Wilhelmij and Schmidt 2000).
The ability to develop and leverage the value of these intangible assets comprises a core competency for organizations, particularly those providing financial and professional services. In these knowledge-intensive organizations, processing knowledge is central to business success (Prahalad and Hamel, 1990; Drucker, 1998).
The important role of knowledge in emerging competitive environment where organisations can succeed or fail depending on their ability to effectively use and manage their knowledge capital of data, information and knowledge has gained increased recognition (Denisi et. al, 2003).Knowledge as a strategic asset has been acclaimed as a way whereby organisations ensure competitive advantage over others that is achieved through a variety of knowledge management programs which explicitly and proactively harness and exploit the intellectual resources of organizations (Boisot, 1999). Realising that knowledge management is a dominant and economic source for today’s innovative enterprise; many organisations struggle to ensure superior knowledge audition and its strategic management for competitive advantage (Storehouse and Lumberton, 1999). The competition among organisations at the international level emphasizing product and service quality, responsiveness diversity and customization is increasing rapidly making knowledge an important asset in modern enterprise (Denisi et. al, 2003). Given this situation financial institutions should strive to have competitive advantage guarantees over other banks.
Knowledge provides a unique opportunity to create a sustainable or renewable advantage by identifying strategically valuable areas where the organization's knowledge leads to competition, and by investing time, effort and resources to continually build that knowledge and to seek complementary knowledge, the organisation will be able to maintain its knowledge superiority (Zack, 1999).. However, despite the potential strategic advantage from acquiring and applying knowledge which has been evident in public establishments, it appears that private organizations especially the financial establishments are lagging behind (Sabri, 2005).
It has been reported that it is only recently that organizations are beginning to realize that explicit knowledge is not enough to become a leader in a competitive environment but that the vast majority of knowledge in organizations is tacit knowledge which is hard to articulate but is held in peoples' heads, and that knowledge has to be created and shared via direct person-to-person interactions, and shared experience (Nonaka et. al, 2000; Zack, 1999). The situation of knowledge management in private financial organisations is still relatively unknown and under researched.
Furthermore, previous research has found that differences in the practices between private companies and the public sector knowledge management exists (Bouthillier and Shearer, 2002). Private sector organizations use knowledge management to facilitate the internal knowledge sharing process, while public sector organizations seek to share knowledge, acquired either internally or externally, with their external partners or with the general public (Bouthillier and Shearer, 2002). These differences need to be further ascertained especially within financial organisations such as banks.
Several recent knowledge management surveys and research projects suggest that most companies do not put Knowledge Management as part of their business strategy or as a measure of its success (Jennex and Olfman, 2006). Despite acknowledging the strategy, many organizations most frequently conceive knowledge management as an operational issue addressed by information technology with online repositories of data representing the primary approach to managing and sharing explicit or codified knowledge (Borghoff, 1997). The current situation on this assumption is yet to be revealed through research.
At present, the Nigerian banking sector seems to be a poorly understood sector regarding the use of knowledge management (Boyd et. al, 2001). The poor level of knowledge management is postulated to have been responsible for the collapse of many Nigerian banks. According to Triba (2004), the collapse of many Nigerian banks three years ago, due to their inability to meet the required capitalisation mandated by the central bank of Nigeria, caused a lot of Nigerian banks no option than to merge or be acquired and this might have resulted from poor knowledge management. The central argument is that the key strategic resource is knowledge which goes beyond systems thinking and that financial organisations are not acquiring knowledge beyond the customers banking datasets, and therefore are not strategically positioned to competitively lead other banks.
To remain competitive, organizations need to benchmark their learning capability as well as their knowledge (Rulke et. al., 2000). This can be done by either aligning its strategy with its existing knowledge resources and learning capabilities or initiate knowledge management and learning programs to enhance those resources and capabilities sufficiently to support its strategy (Anumba and Carrillo, 2002). This study explores the issues related to inputs and processes of knowledge acquisition and sharing including the factors that hinder these processes in a financial institution.
Statement of the problem
While knowledge management has been recognised as a single most significant source of competence (Parallax and Hormel, 1990), it is important to recognise the process between knowledge creation and application on the one hand, and knowledge sharing and reuse on the other. This distinction which has led organizations to supplement their information technology with new organizational forms and cultures that promote interaction and collaboration is yet to be adequately explored through research in the banking sector. In the context of this study, the way in which the Nigerian banks perceive, acquire and use knowledge management for productive opportunity and competitive advantage is unclear. This is important because by aligning and integrating technological and organizational capabilities, financial organisations like banks can become well positioned to create, share and apply knowledge. Obtaining such information through research study of this nature will add value by showing where there are knowledge gaps in the organisation and how the gaps could be effectively addressed or filled thereby improving corporate efficiency and assets. Thus, it is important to know how the banking organisations view their experiences in the marketplace and their move from focusing on data to information and to knowledge.