Knowledge Sharing, Organizational
Learning and Performance of Top 100
Medium Enterprises in Kenya
By
Joyce, W. Ndegwa1, Vincent, N. Machuki2, PhD.
Jackson, K. Maalu3, PhD
1School of Business, Catholic University of Eastern
Africa, Kenya
2School of Business, University of Nairobi, Kenya
3School of Business, University of Nairobi, Kenya
Contents
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Introduction
Literature Review and Hypotheses
Methodology
Results
Discussion
Conclusion
Implications
Introduction
• This study is grounded on the view that organizations have
hidden reservoirs of knowledge in terms of tacit and explicit
knowledge, which can be tapped through knowledge sharing
to improve performance.
• Knowledge resource is considered a key determinant of
corporate success due to its contribution to innovation
• Knowledge sharing helps in combining various levels of knowhow to create new organizational knowledge and acquisition
of deeper levels of understanding leading to better business
performance
• Knowledge sharing contributes to organizational learning by
making employees better problem solvers, more creative and
innovative thinkers, more confident and proficient workers
Introduction Cont…
• This study was anchored on resource based and knowledge
based theories.
• Resource based theory advances the view that performance
differences across firms can be attributed to the variance in
firms’ resources and capabilities
• Knowledge Based Theory (KBT) depict firms as repositions of
knowledge and competences. The theory focuses on
knowledge as a fundamental source of human productivity.
• Organizational learning literature has highlighted the
importance of knowledge ; however, less attention has been
focused on the role of organizational learning on the
relationship between knowledge sharing and organizational
performance
Introduction Cont…
• Medium-sized companies are key players in innovation, bringing
creativity into products and services. Knowledge sharing was
considered a major contributor to the learning, creativity and
innovation
• According to Kenya Vision 2030, Kenya intends to become a
knowledge-led economy where creation, adaptation and use of
knowledge will be among the most critical factors for rapid
economic growth (GoK, 2012)
• The future of Kenyan economy depends to a great extent on the
success of medium-sized companies due to their great potential in
achieving macroeconomic goals of nations
• Finally, knowledge sharing has gained recognition in large
companies, yet there is little evidence of its impact in mediumsized companies.
Literature Review and Hypotheses
• Knowledge sharing fuels growth in regional and national
economies by fostering communities of innovators and ensuring
knowledge diffusion (Appleyard, 1996).
• Knowledge sharing helps the organization to use available
resources in the most efficient way by transferring the best
practices from one department to another, from one project or
client to another
• Knowledge sharing helps in avoiding mistakes and develops the
ability to innovate (Keskin, 2005)
• This study sought to make a contribution by empirically testing
whether knowledge sharing facilitates organizational performance.
To make a contribution in this regard, we put forth a proposition:
H1: Knowledge sharing has a statistically significant effect on firm
performance.
Literature Review and Hypotheses Cont…
• Organizational learning can be perceived as a principal means of
achieving strategic renewal of an enterprise (Crossan, Lane and
White, 1999).
• It is a prime organizational capability which occurs when
organizations develop a deeply ingrained learning culture and have
education, training and mentoring programs available to
encourage organizational learning (Grant, 1996)
• Crossan et al. (1999) contend that convergence has not occurred
on how organizational learning impacts organizational
performance.
• The foregoing discussion led to the hypothesis:
H2:Organizational learning has a statistically significant mediating
effect on the relationship between knowledge sharing and
organizational performance.
Methodology
• The study adopted a cross-sectional survey
• All top 100 companies were contacted to participate in the study
making the study a census survey.
• Data was collected using structured questionnaires
• The respondents were chief executive officers, senior managers,
human resource managers or line managers in the targeted top
100 medium-sized companies
• Cronbach’s Alpha coefficient was used to test for reliability while
Pilot study was used to test for validity of the instrument
• Data was analyzed using simple and hierarchical regression to test
the hypothesized relationships.
Results: H1- Knowledge Sharing and Firm Performance
Model
r
R2
Fvalue
Sig.
Test Result
Financial performance=f(knowledge sharing)
0.226
0.051
0.784
0.541
No overall significance
Internal business processes=f(knowledge sharing)
0.183
0.034
0.505
0.732
No overall significance
Customer satisfaction= f(knowledge sharing)
0.287
0.082
1.299
0.281
No overall significance
Individual significance of(PC)
Learning and Growth= f(knowledge sharing)
0.394
0.155
2.665
0.041
Overall significance
Individual sig. of (WR)
Social performance=f(knowledge sharing)
0.204
0.042
0.630
0.643
No overall significance
Environmental performance=f(Knowledge sharing)
0.418
0.175
3.070
0.023
Overall significance
Individual sig. of (M)
Non Financial performance=f(knowledge sharing)
0.496
0.246
4.742
0.002
Overall significance
Individual sig. of (WR and M)
Organizational performance=f(knowledge sharing)
0.432
0.187
3.334
0.016
Overall significance
Individual sig. of (WR)
• Knowledge sharing: Written reports, Meetings, Shared databases, Personal conversations
• Supports knowledge sharing influences organizational performance (Yi ,2009)
• Found mixed findings
• Supports RBT and KBT
Results: H2 Mediation Effect of Organizational Learning on the
Relationship between Knowledge Sharing and Firm
Performance
Hypothesis
r
R2
∆R2
∆F
Sig. F
change
Sig.
Test Result
Knowledge sharing and financial performance
as mediated by organizational learning
0.180
0.033
0.021
1.310
0.257
0.371
No overall
significance
Knowledge sharing and non financial
performance as mediated by organizational
learning
0.246
0.061
0.015
0.931
0.339
0.153
No overall
significance
• Organizational learning: Individual learning, Group learning, Institutional learning
• Does not support the hypothesis since the mediation effect is not statistically significant
• The finding could be explained by the age of the firm (in that it takes time to establish the
relationship between OL and performance) and the different industries (Jiang and Li, 2008)
Discussion
• The findings on the effect of knowledge sharing on
organizational performance established that knowledge
sharing has a statistically significant effect on organizational
performance.
• The results indicate greater effect of knowledge sharing on
non financial performance especially learning and growth as
well as environmental performance.
• This implies that organizations should not only measure
performance on the basis of financial measures but should
consider non financial indicators of performance.
• This study finding is in line with previous findings (Harlow,
2008; Manaf, 2012).
Discussion Cont…
• The mediating effect was not statistically significant on both
financial and non financial performance.
• This implies that knowledge sharing impacts on organizational
performance regardless of the state of organizational learning in
the medium-sized companies in Kenya
• Additionally, the relationship between knowledge sharing and
organizational performance could also be impacted by other
factors not included in this study.
• No known study has analyzed the mediation role of organizational
learning on the relationship between knowledge sharing and
organizational performance in a single model. The current study
results contributed to knowledge by integrating organizational
learning as a mediator variable
Conclusion
• Based on the research findings, this paper
concludes that knowledge sharing has a positive
and statistically significant effect on firm
performance.
• This implies that organizations should not only
measure performance on the basis of financial
measures but should consider non financial
indicators of performance.
• The study established that there is no statistically
significant mediation effect. This led to the
conclusion that medium-sized companies in Kenya
share knowledge despite the state of organizational
learning.
Implications on Theory
• The study links the theoretical views into an integrated
framework in order to provide better understanding of the
relationships between knowledge sharing, organizational
learning and organizational performance.
• Supports Resource based theory and Knowledge based
theory by clarifying how knowledge resources can
contribute to better performance through knowledge
sharing.
• Extension of frontiers of knowledge-new insights
• Provides a basis for further empirical tests, replication and
theory validation
Implications on Policy
• Policy makers can utilize the findings of this study to formulate sound
support strategies for medium enterprises by creating knowledge
sharing forums for business incubation.
• Policy makers can create forums for businessmen to mentor
upcoming entrepreneurs which would enable the government to
deal with the challenge of unemployment among Kenyan youths
• Adds value to Kenya Vision 2030 which relies on creative talents and
innovation which are as a result of Knowledge sharing
• Regional Integration- Most of the Top 100 companies operate
regionally meaning opportunities exist in EAC
Implications on Managerial Practice
• The study has implications for managerial practice with regard to
managers and employee training, coaching and skill development.
• The study contributes by showing how to make knowledge a
strategic choice for improving firm performance by providing a
basic framework to shape their knowledge sharing strategies.
• The findings reveal that knowledge sharing improves learning and
growth as well as environmental performance. This is critical in
this age of green marketing.
• The sustainable balanced scorecard approach adopted for this
study has an important managerial implication with regard to
employee compensation in that compensation should not only be
based on financial performance only but should consider non
financial indicators as well.
THANK YOU